The annual report, Emerging Europe, cites the Czech Republic's strong mix of growth potential and stable environment for landing the country at the No. 1 spot for the second year in a row. Coming in beyond it are Hungary and Poland, at two and three respectively, with Slovakia and Estonia rounding out the top five. In fact, according to the report, Slovakia is makes strides to close the gap between itself and Poland.

"These emerging markets are the ones that don't have the liquidity and transparency that you typically see in Western European markets," David Hutchings, head of European research for C&W/H&B, tells GlobeSt.com.

The rankings are formed from approximately 50 political, economic and property-related factors affecting the growth and stability of the countries' property sectors, according to C&W/H&B. The report was first issued in 2003, the year before the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia joined the EU.

He points to the fact that the top emerging markets embarked on the reform process before others on the continent. "They forged ahead at a faster rate," Hutchings said. "When you stop and look now, they are still ahead economically and politically, but the gap is closing in those areas." However, in other areas--like the financial sector--they still remain ahead, he adds.

There were no real surprises in the top emerging markets, according to Hastings, but the report does find definite countries to watch. "Central European markets had 15 years to get where they are today; but then you look at countries like Romania and Bulgaria that have only been working at it for five or six years and they are really coming up," he says.

Russia is one of those markets that has moved up over the course of the past two years, with economic growth of 5.7% projected for this year, according to the report. Romania and Bulgaria are markets to be watched because they are the closest to joining the EU, Hutchings explains. Romania has a projected economic growth of 5.6% and Bulgaria has a projected economic growth of 5.4%, the report finds.

And in the long term, Turkey is a market that can't be ignored, he contends. "It's at the bottom of the list but it's a large and vibrant market. There is incredible interest there." The report puts Turkey's projected economic growth this year at 5.3%.

He adds that Turkey is trying to join the EU but it's a long process, with some speculation putting the timeline at 15 to 20 years. However, from a business standpoint, the fact that the country is on the road to joining "is very important," Hutchings says.

Instant Insights /

GlobeSt.com EXCLUSIVE: Czech Republic Comes in First in Emerging Markets Race

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