InvestingAbroad: Irish property investors have begun to target opportunities in central and eastern Europe, according to a new market assessment.

While the UK continues to draw substantial Irish interest, higher returns have encouraged many investors to lift their horizons and move funds further east.

The Irish are now amongst the largest investors in this region, given higher returns than currently available at home, according to Mr Jonathan Hillyer of Colliers Jackson-Stops.

Irish investors accounted for between 20 per cent and 25 per cent of the €1,250 million spent so far this year (2004) in these markets, he said.

"Investor demand shows no signs of abating with strong interest in Hungary, Poland and the Czech Republic."

EU accession is fuelling interest in central and eastern Europe, he suggested during a recent Colliers Jackson-Stops seminar in Dublin entitled "Europe's Rising Tide".

The higher yields being achieved were closing the deals however.

"The average initial yield being achieved in these markets is currently in excess of eight per cent, which compares very favourably to the prime yields of between 3.5 per cent and six per cent being made on commercial investments in the Irish market," Mr Hillyer said.

It represented new business, however, given the continuing interest in the UK market which attracted €2,500 million during 2003.

This market remained strong despite some concerns over interest rates, he added.

He described 2003 as the "year of the Irish investor in Poland", with at least €100 million of acquisitions or pipeline deals attributed to Irish investors.

"We believe this trend will only accelerate in 2004 and we are aware of at least one major Irish investment fund which is now looking to concentrate future investment in Poland."