CZECH REPUBLIC - Property transaction volumes in the Czech Republic have picked up in the first quarter of 2010 relative to the same period last year, as cross border and local investors targeted different ends of the market, according to DTZ.

According to the real estate agency's latest report, transaction volumes increased by 65% from €58m in the first quarter of 2009 to €96m in the first quarter of this year.

However, according to Lenka Hartmanová, researcher for the Czech Republic at DTZ, foreign investors and Czech investors have been pursuing divergent investment strategies.

She said market activity could be distinguished by two types of investors, with each targeting specific opportunities.

"On the one hand, you have institutional investors who have focused on top properties in good locations with regular income payments..

"On the other, you have regional investors who have focused on opportunistic properties with high growth potential."

The largest share (69%) of total investment activity went to Czech investors, including local developer CPI, which closed three transactions totalling €65.7m.

CPI announced it had more than €50m to spend on further acquisitions this year, particularly in the retail sector.

Investors from Austria, Germany and the UK were the next largest investor groups, responsible for 31%, 14% and 11%, respectively, of total transaction volumes.

DTZ expects total transaction volume for 2010 to outstrip that of 2009.

Hartmanová said DTZ had observed a "convergence of price expectations" for investors and owners.

Prime yields for office and retail properties have remained stable at close to 7%, with industrial properties higher at approximately 8.5%.
DTZ expects a slight decline in yields across all sectors in the coming months.