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Investor Guide to Europe 2014
The Czech investment market has matured over the
past decade and is well rated due to its stability over
the recent years. When compared to other Central
and Eastern European (CEE) markets, the Czech
Republic sits alongside its neighbour, Poland, as the
most attractive markets in the region.
As with other CEE markets the Czech Republic has attracted
a relatively high share of cross border investment, although
in recent years domestic investors have increased their share,
with the market broadly balanced between domestic and
cross border activity. In particular the market has seen strong
activity from German and Austrian investors, together with
capital from the Uk and USA.
Whereby large institutional investors are targeting mainly
prime office or retail properties in Prague, domestic investors
are active across the entire country, as well as looking at
assets with value uplift potential. In recent years we have seen
an increase in private capital investments. The listed sector is
a very small part of the market.
The inflows of new investors are very encouraging and should
support further growth in the market. Although the focus
of activity has been towards offices and mixed schemes,
the logistics sector has seen some interest due to stronger
occupier demand.
Availability of debt is improving, with a mix of German,
Austrian and local lenders. Activity is currently focussed on
core assets.
Market sizing
Czech Republic
Europe
Invested stock*
(Total stock)
EUR 30bn
(EUR 115bn)
EUR 3,380bn
(EUR 8,150bn)
liquidity ratio*
(10y average)
3.5%
(5.5%)
4.0%
(4.5%)
2013 volumes
(10y average)
EUR 1.2bn
(EUR 1.2bn)
EUR 139bn
(EUR 135bn)
Investment activity by asset type, 2013
Source : DTZ Research
Investment activity by source of capital, 2013
Source : DTZ Research
Market pricing – Prague (Q4 2013)
office
Retail
Industrial
Current Yield 6.25% 6.00% 8.00%
Min/Max
(10y)
5.25%-
8.30%
5.50%-
8.00%
6.50%-
10.00%
Yield
definition
Gross initial yield
Source : DTZ Research
CZECH
REPuBLIC
* 2012 figures
