While economic growth is expected to continue to recover over the second half of the year, albeit at a slower pace than initially post-lockdown, it won’t be the end of falls in Emerging European property values. The sharp decline in retail rents in Q2 and expected ongoing weakness of the consumer and tourism sectors mean we no longer expect Emerging European retail to outperform Western Europe this year. Meanwhile, although a shift to remote working is expected to have a smaller impact on occupier demand than in other parts of Europe, we think it will limit the post-COVID rental recovery in the Polish markets and Prague. Industrial stands out, with values bouncing back as the economic recovery takes hold. That said, rising virus cases in parts of Central and Eastern Europe have the potential to throw the recovery off track and potentially lead to a much larger adjustment in property values.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services