Czech Republic to hit EUR 750m of deals in 2012, says Colliers

The Czech Republic has witnessed EUR 354 mln of deals so far this year, 80% below last year’s figure but well ahead of other CEE markets like Romania, Hungary and Bulgaria.

In 2012, Colliers expects around EUR 750 mln worth of transactions to complete in the country.

‘There is definitely an interest in the Czech market, but this is largely limited to Prague while in Poland for instance, you have several second-tier cities that are viewed as attractive investment destinations,’ said Chris Sheils, director of investment at Colliers International Czech Republic.

Development remains constrained in Prague and is mostly reliant on own equity, he adds.

‘What we are seeing is that bank financing is available for good quality, well-located schemes, but that banks still require a proportion of pre-leasing to be in place (50%+ as minimum). Some development groups are therefore commencing development of their schemes speculatively with their own equity resources, then when preleasing breaches the acceptable levels for the bank, they can obtain debt finance.’