Investment activity in the Czech market reached its second highest ever volume in 2011 since 2007, totaling at €2.2bn. But a drop in investment volumes could ensue thanks to the increased cost of investor equity and the lack of financing, warns the head of investment in DTZ Ryan Wray. “The banks have increased debt margins by 300 bps and are focusing on a minimum debt service cover ratio 1:1.25, while investors aim at higher returns, strong covenants and long term leases.” Banks are currently open to finance investment transactions across all segments of commercial property, but conditions depend on the quality of the transacted property, as well as the investor’s activity in the sector.
