IMMOEAST Annual Report 2006/07

34 IMMOEAST Annual Report 2006/07
PL, Warsaw,
Wisniowy Business Park
South-eastern Europe is
the most important
target region for new
IMMOEAST investments
Attractive rents, low
vacancy rates and
increasing legal security
BG, Sofia, Enterprise Building
This development was highly favourable for IMMOEAST. The decline in returns on all geographic and
sector submarkets in Central and Eastern Europe led to a significant increase in the fair value of the
property portfolio. However, rising property prices now make it more difficult to identify attractive
investments.
IMMOEAST expanded its portfolio in Central and Eastern Europe by a significant amount during
2006/07. The number of properties increased from 89 to 230 and letable space rose from 1,190,251
sqm to 2,552,824 sqm. In spite of this development, the representation of Central and Eastern
Europe in the Group’s portfolio fell by 31.9 percentage points from 84.1% to 52.2% because of the
strong increase in investments in other areas. The share of new investments made in this region
during 2006/07 equalled 26%. Additional details on IMMOEAST investment activities in the countries
of Central and Eastern Europe are provided in the segment reports beginning on page 86.
South-eastern Europe: sound returns, strong growth
Romania is the new economic driver for the Balkans
South-eastern Europe (Romania, Bulgaria, Serbia, Croatia and Slovenia) became the most important
target area for new investments during the 2006/07 financial year, with 60% of the company’s
total investment volume allocated to this region. In this development, Romania plays a key role: with
a population of roughly 30 million, it is not only the largest submarket but by far the most attractive
country for international investors in all sectors. This strong momentum has also started to spread
out into the neighbouring countries. Even countries like the Republic of Moldavia, which are less
important from an economic standpoint, have profited from the Romania boom and become interesting
markets for property investors over the mid- to long-term.
In general, South-eastern Europe was an extremely attractive location for investments during the
2006/07 financial year. Excellent rents can be realised in all segments of the market and vacancy
rates are low – while the demand for modern space is extremely high and many submarkets are
characterised by an undersupply of space. Since the accession of Romania and Bulgaria to the EU
in early 2007, the key national markets now have a standard of legal security that reflects the other
member countries of the European Union.
IMMOEAST expanded its portfolio in Central and Eastern Europe by a greater margin than in any
other submarket during the 2006/07 financial year. The number of objects rose from 19 to 135 and
letable space increased from 213,721 sqm to 2,011,043 sqm. The share of this region in the portfolio
grew 26 percentage points from 15.1% to 41.1%. Details on IMMOEAST investment activities in
the countries of South-eastern Europe are provided in the segment reports beginning on page 93.