THE REAL ESTATE RISK IN CENTRAL AND EASTERN EUROPEAN OFFICE MARKETS: THINKING TOO BIG?
||Laurin, Frédéric; D’Argensio, John-John
||THE REAL ESTATE RISK IN CENTRAL AND EASTERN EUROPEAN OFFICE MARKETS: THINKING TOO BIG?
||17th Annual European Real Estate Society Conference in Milan, Italy
||In this paper, we investigate the evolution of office market risks and property prices in Central and Eastern European (CEE) cities since the transition period. We develop a methodology assessing if office property markets have been accurately evaluated in CEE cities, using as a benchmark the past evolution of the office markets in Western European cities. We are then able to estimate a predicted property price and capitalization rate for each CEE cites, given their actual real estate and economic conditions. Results show that investors’ valuations are in fact not too far apart from the predicted value based only on real estate and economic fundamentals. The macroeconomic environment, however, seems to have a stronger effect on property prices in CEE than real estate factors, contrary to Western European cities.
||Office property market, Central and Eastern European countries, Europe, Risk evaluation, Property prices
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||Real Estate Investment (2)
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