Investment activity in 2010 recorded better start than in 2009
According to the last study by CB Richard Ellis, total investment turnover in the Czech real estate investment market reached €196 million in H1 2010. While the amount is lower than in H2 2009, it is more than double compared to the first half of 2009 (€73 million). Historically, it is normal for lower volumes during H1 with an increased level in H2
Stuart Bloomfield, Head of Capital Markets Czech Republic comments: ‚Buyers are still selective however the discrepancy in the expected pricing levels of vendors and potential investors appears to be narrowing further. Since the beginning of the crisis we have only seen vendors pricing expectations softening in order to achieve sales. As of the end of H1 2010 yields for prime office and retail properties have experienced a modest decrease by 15 basis points. This is the first decrease after five consecutive quarters indicating buyers are willing to be more competitive to achieve successful purchases.’
The first six months proved that when institutional type product comes to the market, there are buyers whose expectations are close to prime yields. As such, we expect to see an increasing level of investment activity from institutional and equity investors in the second half of 2010.