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Qusay AlObaidy
on July 18, 2020
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Central and Eastern Europe makes sense... Think about it.. Oil prices are static, there is a pandemic raging ( with potentially a second wave )? The traditional yields that were obtainable are slowly drying up.
Capital will always seek the high yield high quality investments. But what are these investments ?
People always veer to the property market which is a reasonable train of thought, as here it is assumed that property is a real investment & a hedge against inflation. ( All perfectly rational ideas ).
There is plenty of money pouring into Eastern Europe real estate as there is considerable value when you compare it to Western Europe, most of these Eastern European Countries are a two hour flight hop to London at potentially 10% the prices obtainable in Central London.
The quality is comparable to Western Europe in terms of education, culture, architecture, the differences appear mainly in the language, ( although most under 30’s all speak English in any Eastern European Capital ). Land is by far cheaper in Eastern Europe than anywhere else in the EU. When you consider it is relatively safe, crime is under control, money is free to move in & out for investors, with a European feel everywhere, restaurants, cafe’s, cinemas, shopping malls, everything you would expect in Western Europe. Thus the window of capturing a piece of what’s on offer in this part of the world will not be forever as they slowly catch up with their more affluent neighbour Countries within the EU.
But property is only one sector. There are many more with advantages from the Eastern European side. Technology is where they excel with many highly skilled professionals enabling Many Countries to utilise the expertise for a fraction of what it would cost in other parts of the world. Numerous Companies use Eastern Europe as a hub for their technology needs and there are a large number of Companies that have operations in different parts of the world but process their data in Eastern Europe as it is both effective & less expensive.
There are areas of Machinery & Equipment that are manufactured in Eastern Europe and exported to numerous Countries around the world including the Middle East.
From Vegetable Oil to Toothpaste there are producing plants dotted all around Eastern Europe able to deliver good quality at reasonable cost. ( This is perhaps the most significant area of advantage and potential high yield returns versus the Middle East ).
It is not just the area of cost effectiveness that one should consider Eastern Europe for potential investment. ( Although that is definitely a huge plus ). The real reason should be more to do with reliability. The people in these Countries, Bulgaria, Czech Republic, Hungary, Estonia, Latvia, Lithuania, Poland, Romania, Slav Republic and numerous other neighbours, outside the EU, Ukraine, Belarus, and a few others all demonstrate the ethics of very hard work and the willingness to partner with the aim of giving their best quality, as they fully understand how competitive the world is today & they are actually willing to do the work.
I say this because as I travel around the world I see many places where people are NOT willing to work hard and prefer certain types of jobs over others. In Eastern Europe my experience has been that there are no pretentions. They want to work, and they want to do it properly.
When you couple this with numerous very busy shipping ports and airports all working daily to transport goods & services across the globe, then these existing advantages are there to be taken by capable investors.
Europe is definitely getting bigger, and the entry into & gleaning the yields from Eastern Europe will not last forever.
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