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News Release

MIPIM, Cannes, Bucharest, Budapest, Prague & Warsaw

Value for Occupiers in Central and Eastern Europe

Shoring Markets Look Set to Help Region through Tougher Economic Times

MIPIM, Cannes, Bucharest, Budapest, Prague & Warsaw, 10th March 2009 - Despite a raft of recent negative news on eastern European economies, Jones Lang LaSalle’s new report launched today at MIPIM ‘Onshore, Nearshore, Offshore: Unsure? A Central European Perspective’, provides a welcome positive view to occupiers by outlining the attractiveness of CEE markets towards landlords or tenants over the next three years.  The diagram below shows that on average, the capital cities of the four countries offer a mixture of relatively balanced market conditions and tenant favourable conditions. Budapest and Warsaw are particularly favourable towards tenants; the first over 2009/2010 and the second in 2010 and 2011, characterised by falling rents and increasing vacancy rates.

Bucharest and Prague are also set to be favourable in 2010; Bucharest is forecast to switch to favour the landlord more in 2012 and the rest of the three year period Jones Lang LaSalle predicts conditions in all of the cities to remain relatively balanced between landlord and tenant market conditions.

While there is variance in the precise balance of drivers and influential factors shaping business location decisions, four key drivers – economic and political, labour, real estate and infrastructure, and business environment – are elements that, when carefully evaluated, can present tremendous opportunities but, conversely, can expose occupiers to potential risks.

John Duckworth, Managing Director Jones Lang LaSalle CEE commented:  “Set against a backdrop of global recession, the CEE region, though impacted, will continue to attract corporate investment.  Whilst the region has a highly educated, skilled and multilingual labour pool and lower labour costs than Western Europe, real estate developers active in CEE understand the constantly changing needs of occupiers and are providing modern, flexible, high-specification properties at highly competitive prices.”

He concluded: “Businesses are increasingly finding that shoring strategies are critical for improving their bottom lines. Our conclusion is that the CEE region has become a highly competitive location on a global scale for corporates, when making their strategic Business Product Outsourcing and Shared Service Centre decisions. With continued development in the region, combined with clear advantages around cost, labour and risk, we believe this trend is set to accelerate”.
Notes to Editors:
To arrange an interview at MIPIM with John Duckworth, Managing Director Jones Lang LaSalle Central & Eastern Europe to discuss this report and its findings in more detail, please contact Madeleine Little +44 (0)7809 596 921

In addition to Jones Lang LaSalle, the report has also been contributed to by Grafton Recruitment and the four inward investment agencies, PAIiIZ, Czech Invest, ITDH and ARIS.