Property investment volumes in the Czech Republic are unlikely to reach the level achieved in 2011 this year as banks seek to clean up their non-performing loans and the eurozone uncertainty continues, according to Colliers International’s 2012 Eastern Europe Real Estate Review.
Property investment volumes in the Czech Republic are unlikely to reach the level achieved in 2011 this year as banks seek to clean up their non-performing loans and the eurozone uncertainty continues, according to Colliers International’s 2012 Eastern Europe Real Estate Review.
Investment transactions totalled more than EUR 2.2 bn last year, around four times the 2010 figure. The return of foreign investors to the market is believed to have bolstered the already active Czech-based investor group. The share of total transactions by Czech investors fell to 28% in 2011, however the absolute volume of their investments increased to EUR 570 mln from EUR 390 mln in 2010.
As foreign banks with a local presence pull back on lending, local banks will be in a good position to partly fill this void and the market could see the emergence of specialised debt funding vehicles, predicts Colliers.
The report provides a summary of trends in the office, retail, industrial and investment markets over 2011 as well as a prognosis for 2012. It also comments on the economic conditions within the Czech Republic, as well as its proximity to Germany, in relation to its overall future outlook.
‘The Czech Republic is a relatively stable economy with a well-capitalised and regulated banking system,’ said Omar Sattar, managing director of Colliers International Czech Republic. ‘Czech exports are positioned to benefit from an improving German economy in late 2012 or early 2013,’ he added. ‘As Germany grows, this has a positive effect on the Czech Republic.’
