Czech private real estate investment groups are strengthening
Currently, there are roughly 50 groups and growing rapidly
CBRE sees a strengthening group of private investors on the Czech market that was previously saturated mainly by well-established investment groups. There were only about 10 – 15 groups of Czech private investors going to the market. Today, there are about 50 of them and rapidly increasing.
The entities are either those established private investment funds of qualified investors or private groups of three to five wealthy individuals, each of them providing funds in the amount of 50 – 100 million CZK. These groups have initiated investments in those real estate projects large groups are not interested in due to its low investment volume.
These investors are secured with their needs covered. Therefore, they are not primarily interested in high-risk investments that make 15% a year, but rather they are looking for for long term and less risky investments, securing roughly 5 - 6%. These investors fund such transactions by their long-term business activities.
Investing in real estate has a place in each investor’s portfolio. The current interest rates attract investment in real estate and, in comparison, still have an interesting higher value not solely to Czech private investment groups.
Groups of private investors looking for commercial office or retail properties with long-term leasing contracts can expect profits at around 8 – 9%. They are interested in Prague’s office spaces as well as retail properties across the Czech Republic.
There are similarly focused clusters of investors present abroad, competing for the same product within transactions.
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.