Commercial property investment in the Czech Republic plunged by 89% year-on-year to just EUR 100 mln in the first three quarters of 2009, according to a new research report issued by real estate consultant DTZ. In the third quarter around EUR 48 mln was invested in the market, a slight increase compared to the second quarter of the year.
Commercial property investment in the Czech Republic plunged by 89% year-on-year to just EUR 100 mln in the first three quarters of 2009, according to a new research report issued by real estate consultant DTZ. In the third quarter around EUR 48 mln was invested in the market, a slight increase compared to the second quarter of the year.
There are 'several transactions in the pipeline and along with improved investor sentiment, the revival of the investment market seems underway, albeit at lower volumes', the broker said. DTZ expects the total investment volume to reach around EUR 300 mln in 2009. Prime yields amount to around 7% for offices and retail and above 9% for industrial property.
Office take-up has been rescued from a historical low because of renegotiations (extension of contracts), which amounted to almost half of gross take-up. Net take-up (excluding renegotiations) totalled only 24,900 m2 in the third quarter of 2009, which represents a 45% decrease quarter-on-quarter and a 62% decrease year-on-year.
Due to the credit crunch, the vast majority of developers require significant pre-leases before starting construction, DTZ noted. As a result, the majority of almost 1.4 million m2 of scheduled office projects in Prague are being postponed to 2011-2013 and beyond depending on when pre-leases and financing are expected to be secured. 'This could very well result in a lack of prime offices in the Czech capital between 2010 and 2011', DTZ concluded.
