Investment in the Central and Eastern European (CEE) region in the first half of 2008 decreased to 5.9 billion euro, a 14 per cent decline from the same period in 2007 and 24 per cent down from H2 2007 results, real estate consultants CB Richard Ellis said in an investment market report.

Closing transactions now takes longer and has become more difficult. One of the reasons for this is that banks have become more restrictive in their lending policies. The number of purchasers is declining as listed property companies feel the impact of declining share values, the report's authors said.

Compared to the overall European slowdown in investment activity, market activity in CEE remained relatively high in H1 2008. Compared to the same period last year, European investment turnover fell 49 per cent over the first six months of the year to 63.4 billion euro. CEE real estate investment activity now accounts for 9.3 per cent of total pan-European investment activity. This is significantly higher than 2007 levels, when it was six per cent, according to the report.

The Bulgarian real estate investment market had a strong first half of 2008, with 20 deals recorded worth 745 million euro – almost 85 per cent of Bulgaria’s total investment volume in 2007 and a growth of 29 percent compared to H1 2007, the report said.

Unlike in most other CEE markets, Sofia has not experienced prime yields decompressing thus far. Bulgarian investors accounted for more than half of investment volume in Bulgaria in H1 2008. A strong development market, especially in the office and retail segments, is likely to be a driver of continued demand for investment products in Bulgaria, the report said.

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