PRAGUE - INTERFAX CENTRAL EUROPE - The total transacted investment volume in the Czech Republic reached EUR 1.062 bln EUR in 2008, a 60% year-on-year (y/y) decrease from 2007, a record year with EUR 2.65 bln transacted, property consultancy DTZ said Tuesday.
"Although investment activity decreased significantly year-on-year, the Czech investment market remains one of the most liquid in CEE," said Martijn Kanters, Head of Consulting & Research at DTZ and co-author of a report on the investment market in the Czech Republic.
According to the DTZ report, the office sector had the largest share of commercial properties sold last year (62%), followed by retail (18%) and mixed-use buildings (15%). 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, (21 EUR, -1,86%) and GLL. Czech investors also had a high share (24%), followed by British companies (12%).
"We are aware of a significant volume of Czech equity assessing opportunities in domestic real estate," Kanters said. "We expect their activity mainly in the second half of this year. We consider the opportunities for investors to be absolutely unique and unprecedented."
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.
According to DTZ, yields should rise this year as well, with the sharpest rise expected in logistics and light manufacturing halls 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.
"As a consequence of market revival we expect a repeated decrease in yields in early 2010," Kanters said.