The total transacted investment volume in the Czech Republic reached 1.062 billion in 2008, a 60% decrease from 2007, which was a record year when 2.65 billion were transacted.
The office sector had the largest share of commercial properties sold last year (62%), followed by retail (18%) and mixed-use buildings (15%). Martijn Kanters, Head of Consulting & Research at DTZ and co-author of DTZ's report "The Investment Market in the Czech Republic", assesses the latest results of the Czech investment market as follows: "Although investment activity decreased significantly year-on-year, the Czech investment market remains one of the most liquid in CEE." The report indicates that investment volume dropped significantly in the last quarter of 2008. However, the market did experience active business at year end.
German investors dominated with a 43% share, the most active of which included DEGI, SEB and GLL. Czech investors also had a high share (24%), followed by British companies (12%). Prime yields moved out over 2008 with shifts noted in the range of 125 to 175 b.p. Currently they stand at above 8% for industrial/logistics and under 7% for offices and retail, which are significantly higher yields than at the close of 2007 when they were pressed by excess demand.
Yields should rise this year as well. The sharpest rise is expected in logistics and light manufacturing halls. This is due to stagnation in the industrial sector resulting from the global economic situation. DTZ estimates less marked growth of prime yields for offices and retail.
"We are aware of a significant volume of Czech equity assessing opportunities in domestic real estate. We expect their activity mainly in the second half of this year. We consider the opportunities for investors to be absolutely unique and unprecedented. As a consequence of market revival we expect a repeated decrease in yields in early 2010," states Martijn Kanters.