Prague,
20
December
2016
|
17:18
Europe/Amsterdam

CBRE: Czech investment volume could exceed EUR 3 bln. boundary in 2017

Summary
  • Investment: Strong demand across all investment sectors is expected to continue into 2017 and we believe that the EUR 3 bln. boundary could be exceeded once again. Retail sector will be dominated.
  • Office: The Prague office market has been experiencing one of the strongest years in its history and the positive market sentiment is expected to continue through 2017.
  • Industrial: The industrial & logistics market is expected to continue to perform well and both 2016 and 2017 are on the way to becoming record-breaking years in terms of take-up.
  • Retail: Positive market sentiment continues in the retail sector as well. Favourable labour market conditions support high consumer confidence.

CBRE, the world leader in commercial real estate services, has released the Czech Republic Real Estate Market Outlook 2017 for investment, office, industrial and retail sector. The study is available here.

Real Estate Market Forecast for 2017 in numbers

 

INVESTMENT

Share on total volume

47 %

Retail

38 %

Office

8 %

Mixed use

6%

Industrial

OFFICE

270 000 sq m

Take-up

11,2%

Vacancy

178 800 sq m

New Supply

20,50 EUR/sq m/month

Prime Rents

INDUSTRIAL & LOGISTICS

950 000 sq m

Take-up

4,3%

Vacancy

660 000 sq m

New Supply

4,30 EUR/sq m/month

Prime Rents

RETAIL

36 200 sq m

Under Construction

-

61 000 sq m

New Supply

135 EUR/sq m/month

Prime Rents Shopping Centres

Richard Curran, Managing Director CBRE
The performance of the Czech real estate market shows no sign of slowing down in 2017. We believe leasing and investment volumes will continue to rise in line with the continued strong macro economic performance of the country.  This is the place to be in 2017!
Richard Curran, Managing Director CBRE

CBRE continue to forecast further downward pressure on prime yields in investment sector, however the speed of yield compression will slow. Currently, we are monitoring more than 50 ongoing transactions with a total volume in excess of EUR 3.3 bln in various stages of negotiations which could be closed in 2017. According to our forecast, more than 50 % of total investment volumes in 2017 may be coming from the regions.

On the Prague office market take-up will be constantly driven by companies’ relocations and expansions. Higher amount of newly delivered office space should lead to short-term slight increase in vacancy rate. Average headline rents in some of the most in demand locations may slightly increase due to the temporarily limited amount of available space. Currently, there is 178,800 sq m in sixteen projects under active construction scheduled to be completed in 2017. All of them are located in established office locations such as Butovice-Stodulky, Pankrac-Budejovicka and Karlin.

The industrial and logistics market will continue to be driven by the logistics, ecommerce and automotive sectors. Decisions on location will be increasingly be determined by the availability and cost of labour. Besides new XXL warehouses, we expect to see an increase in requirements for much smaller, lower specification, innercity or so-called last mile delivery facilities.

Retail Market stability is supported by the fact that there is a small number of new shopping centers coming to the market and retailers are able to better predict to which centres to expand. In 2017, we expect prime rent to grow further as there is hardly any prime space available. In 2017, three new shopping centres are scheduled to be completed: Central Jablonec, the expansion of Centrum Chodov in Prague and the expansion of IGY Ceske Budejovice. Besides new shopping centre openings, we expect three new shopping centres to start construction: Borislavka (10,000 sq m), Palac Stromovka (13,000 sq m) in Prague and Avion Shopping Park in Brno (13,200 sq m). Additionally we will see one specialized centre – Outlet Arena Moravia (11,700 sq m) delivered.

About CBRE

CBRE Group, a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2016 revenue). The Company has approximately 75,000 employees and serves real estate investors and occupiers through approximately 450 offices worldwide (excluding affiliates). CBRE offers a broad range of integrated services including project management; property management; investment management; valuation; property leasing; strategic consulting and research and consulting. In the Czech Republic, CBRE has almost 350 employees and manages nearly 70 commercial premises with a total area nearly 1.2 mil. sq. m. Read more at www.cbre.cz.