The volume of investments in real estate was expected to increase significantly this year, the study shows

The volume of investments in real estate in the Czech Republic should increase by up to 22 percent this year and amount to 38 billion crowns (1.5 billion euros). In the first quarter, according to the analysis of the real estate consulting company Savills, they should reach approximately 350 million euros (8.8 billion crowns). The volume of European investments in real estate should be approximately 177 to 182 billion euros (4.5 to 4.6 trillion crowns) for the whole year 2024 and 34 billion euros (859 billion crowns) in the first quarter.

“Since the beginning of the year, there have been many more owners who have decided to sell. The main reason is that the rise in interest rates is stopped, which brings more certainty to the market. Along with this, a sufficient number of other transactions have taken place to provide certainty about the current price level, and there is also a prevailing feeling among investors that the market has already bottomed out,” said Fraser Watson, Head of Investments for the Czech Republic and Slovakia.

Savills expects yields in the Czech Republic to remain broadly flat in 2024, with the yield forecast for state-of-the-art office properties remaining at 5.25 percent, the same as for industrial properties. For the newest retail properties, the yield should be 6.5 percent. Last year, according to Savills, it was quite difficult to achieve these returns, the drop in central bank rates at the end of this year should be an impetus for investment activity.

“As the gap in buyers’ and sellers’ price expectations begins to narrow, we expect to see a gradual recovery in investment activity from the second half of 2024,” said Tristam Larder, head of European capital markets at Savills. According to him, logistics and multifunctional real estate will remain the preferred asset classes in Europe this year, and interest in retail real estate is also growing. “Due to the recent price adjustments, we are also registering more and more investor inquiries for offices,” Larder added.

The Trend Report 2024 of the Association for the Development of the Real Estate Market (ARTN) shows that last year the volume of investment in real estate in the Czech Republic was the lowest in the last ten years. It amounted to 1.36 billion euros (34.5 billion crowns), a quarter less year-on-year. Although the real estate market in the Czech Republic faced a number of challenges last year, it remained relatively stable, according to ARTN. Last year, the construction of residential properties fell and the construction of offices in Prague stopped. However, a significant percentage of retail space increased, and the construction of industrial and logistics areas also grew at a record high.

Savills CZ is part of the global Savills company based in Great Britain. Provides consulting services in the field of commercial real estate. It has been active in the Czech Republic since 2017 and employs over 65 people. The company employs over 40,000 people in more than 70 countries.

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Article author: ČTK
Source: Estateandbusiness.cz