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Austria well placed for property turnaround in CEE regions

Austrian companies are well poised to cash in on the optimistic outlook for the property market in the CEE / SEE markets.

That was the message of a new report from international property consultancy EHL which revealed how the markets had been decimated in the wake of the US sub-prime mortgage crisis.

Andrea Dissauer, who is the director for the SEE / CEE region explained how companies had rushed to areas like Romania to invest - and then pulled out almost as quickly.

She said: "it was like a wild party, between 2005 and 2007 firms were rushing to invest in the region. But then almost overnight they packed their suitcases and pulled out."

She explained how firms slashed staff numbers at their offices in the region and they were now badly placed to take advantage of the opportunities.

EHL has offices in Poland, the Czech Republic, Hungary, Romania and Slovakia and Andrea Dissauer said that Austrian firms had, with a traditional strong base in the region, maintained their faith in the opportunities, which meant they still had the infrastructure in place now that the opportunities were returning.

She said: "It is difficult to find a single reason why the Austrian firms decided not to head out wholescale as the firms from other countries did but in part it is because Austria has always been strong in this region. There is obviously the geographical advantage which we have over for example the United Kingdom or America. And there is also the emotional ties that many people here have because of the traditional links with the area. Many people in Vienna for example still have a Czech surname. And a further advantage is that at the end of the day it was a relatively small market so that the bigger investor countries like America or the United Kingdom were not so attracted to it. That meant more opportunities for Austrian firms."

EHL managing director Franz Pöltl added that one of the inevitable consequences of a reduction in presence in the region was that the market research on the possibilities was not always being done properly. He said: "Especially in the question of Hungary and Romania it seems as if the research of the markets is limited. We believe there are more opportunities there than the regions are given credit for."

Managing partner Michael Ehlmaier added that the predictions were that the region will outperform the European Union average with the undersupply in many areas offering good opportunities for investors.

He added: "There are very positive signs that the market is improving and that is offering great opportunities for middle and long term investors. Austrians were often the first into the regions and for the most part they remained strongly present throughout the troubled times of the past few years. That means they have better cards in their hands than the other firms."

But he added: "It can be seen as a second chance for the first movers – but the pioneer phase is needed again from the Austrians who have always been traditionally active in these markets. Those are prepared to go on the offensive and will benefit in years to come. Prices are good, people prepared to invest now come onto the market with projects at exactly the right time when there is little competition, and the local knowledge will put them in the lead with future projects such as property management – asset management and valuations for other property investors who might not have the local base."

Vienna Times

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