Assets totaling €460m changed hands on the Czech market in the third quarter of this year, according to BNP Paribas, bringing the total for the first nine months to €1.43bn. BNP Paribas is predicting the transaction volume will hit €2bn for the year. Banks are open to financing 75 percent of the costs for class A properties, the highest ratio in Central Europe. Comparing the Czech and Polish markets, Lenka Šindelářová, head of consultancy at BNP Paribas Real Estate APM CR, says that while Poland profits from its size and liquidity, the Czech Republic is considered the more stable market regarding its political and economic climate as well as the development and predictability of its real estate market. “The Czech commercial real estate market has healthy basics with regard to tenant demand, infrastructure and economic growth that’s high above the European average,” she says.
In H1, investors concentrated mainly on the Czech retail segment, but shifted their focus to office over the summer. The acquisition of City Tower by REICO was the largest deal reported in Q3. The sales of The Park in Prague 4 and an additional two office buildings as well as one shopping center are expected to close before the end of the year. In Q3, local investors, like REICO and Redside Funds, dominated the Czech real estate market. Activity on the property investment markets has been driven by low interest rates and minimum yields from bonds. The situation is expected to continue for another 12 to 18 months, according to BNP Paribas.
