Fund / Region

The geographical region is normally abbreviated as CEE, Central and Eastern Europe. According to the World Factbook the following countries fall within Central Europe: Germany, Poland, Czech Republic, Austria, Slovakia, Slovenia and Hungary. The Baltic States fall within Eastern Europe. Countries to the south of Hungary such as Romania and most elements of the former Yugoslavia are considered part of South-Eastern Europe.

Following the fall of communism in the region at the end of the 1980´s, Central and Eastern Europe proceeded to grow at an average annual rate 2% above western Europe for the following 15 years. in 2008 this growth came to an abrupt halt with the worldwide economic crisis. Countries such as Hungary, Romania and Bulgaria which had been most reliant on foregn capital flows for growth were particularly badly affected. Poland in contrast avoided an actual recession, whilst both the Czech Republic and Slovakia weathered the crisis reasonably well.

Recent years have seen a resumption of growth to levels well above the European average. The region´s competitive advantages include its central location within the European continent, a trading market of 200 million consumers, good availability of skilled labour, relatively low costs and a positive investment climate. 


Poland, the largest country in the region with 38.5 million inhabitants, is considered to be one of the most stable and dynamic economies in Central Europe. After a decline in economic growth in 2012 and 2013, the economy in 2014 is showing a recovery. Economic growth in 2021 was 4.6%. A growth of 4.6% is expected for 2022. 


At the end of 2021, the unemployment rate was 5.1% and is showing a decline. The inflation rate as at end March 2022 is 10.9%.

The real estate market in Poland

By mid-2020, the total of modern retail properties in Poland amounted to 12.07 million m². In the major cities such as Warsaw, Kraków, Poznan, Wroclaw and Gdansk, there will be approximately 6.1% vacancy at the end of 2020. Vacancy in Q4 2020 fell to 6.6%, while in Q3 2020 it was still 8.2%. Vacancy remains low, which means that new units will be taken up relatively quickly.


Domestic retailers are still very actively expanding in Poland, especially the major players in the market such as LPP Group and CCC which are still looking for new retail locations in Poland. Most international parties are still very selective but are expanding.


The total investment volume on the commercial real estate market in 2021 amounted to EUR 5.71 billion, and the result was made up of 164 tra nsactions. In terms of the number of transactions, 2021 was a record year, the previous year with the largest number of transactions was 2019, in which 153 transactions were finalized. The total vol ume of tra nsactions in 2021 was 7% higher than the year before.


Czech Republic

The Czech economy has recovered very well from the economic crisis since 2013, making it one of the more stable countries in the region. For 2022 an economic growth of 4.3% is expected. The economy is supported by an active monetary policy, low energy prices and private consumption which will grow further as the labor market improves further.

The Czech Republic has 10.5 million inhabitants. The current unemployment rate is 3.4%. Inflation was 2.4% at the end of 2021.

The Real Estate Market in the Czech Republic

Prague and Brno are the two most important cities for the Czech real estate market. The total transaction volume in the Czech Republic in 2021 amounted to EUR 1.9 billion. The retail sector was the third sector after offices with 21.1%, with 17.3% of the total investment volume. In 2020, residential real estate represented 57.7% of the total investment volume.


Both international and local investors are very active in the Czech real estate market. Mainly outside the two major cities, local investors are very active.


Demand for the Czech commercial real estate remains strong. The Czech market is established as a highly sought-after market, providing solid returns to existing investors, well protected against market fluctuations, supported by strong international and local capital, with rental growth prospects in several segments and still attractive yield returns in comparison to western European markets. 


The investment volume in the Czech Republic is not driven by demand, but rather by supply.



The Slovak Republic consists of eight independent regions. Road quality, infrastructure, economic growth, salary levels and unemployment vary by region. The western part of Slovakia (Bratislava and Trnava region) is more developed than the eastern regions of the country (Košice and Prešov). Slovakia is one of the largest producing countries for the car industry with Volkswagen in Bratislava, Peugeot/Citroen in Trnava and KIA Motors in Žilina. More than 1 million cars are produced in Slovakia every year. In addition, Jaguar/Land Rover will produce approximately 300,000 cars in Nitra from 2018 onwards.


The Slovak economy expects a recovery to 4.8% economic growth in 2022. The unemployment rate in Slovakia is still 6.8% at the end of 2021. Inflation during 2021 was 1.5%.

The real estate market in Slovakia

The real estate market in Slovakia varies by region. In the Bratislava area you will find many A-class offices. A-class offices are very limited in the various regions, although a number of larger A-class buildings have been built in Košice and Žilina in recent years. The regions mainly contain older B-class and C-class buildings. Several new projects are planned in the regions and will become available on the market in the coming years.


The volume of real estate investments in Slovakia amounted to EUR 765 million in 2021. The retail sector dominated the market with a share of 44% of the total investment volume, closely followed by the industrial & logistics sector with 36%. The office sector only achieved a market share of 14%, which is almost half the percentage of last year. The remaining 6% is represented by the investment volume in the hotel and mixed-use sector. Office real estate will remain attractive to investors due to the growth of e-commerce, as will industrial and logistics real estate.

The dividend policy of the Fund is to aim to pay out ca. 35% of the annual operational profit as dividend. This annual distribution may be replaced or supplemented by specific share buyback programmes as approved by shareholders in a General Meeting.

Arcona Property Fund counts the following substantial companies amongst its tenants: