January 24, 2017

Volume of real estate investment in 2016 was the highest ever, exceeding CZK 100 billion

Volume of real estate investment in 2016 was the highest ever, exceeding CZK 100 billion

CBRE has released the results of commercial real estate investments for 2016. The investments include real estate projects across all sectors, especially in the office, industrial, retail and hospitality segments. The total investment volume in the real estate sector exceeded CZK 100 billion (€3.7 billion).

The most notable transactions in 2016 were the sale of P3 Logistics Parks, the Park and Florentinum, with 67 transactions being mediated on the Czech market in total. The market was dominated by investments in office properties accounting for 43 percent of total transactions, while industrial investment made up 28 percent and the retail sector constituted only 17 percent compared to 2015, when it dominated the market. The largest number of transactions in the office sector took place in Prague, at 97 percent.

Chris Sheils, Head of Investment Properties at CBRE, said: “Asian investors that are active in the CEE market tend to be focussed on larger transactions, such as dominant properties, portfolios or even by taking an ownership interest in a real estate operating platform itself, such as the recent acquisition of P3 Logistics Parks by GIC, the Singaporean Sovereign Wealth fund."

Investments by Asian investors in 2016 accounted for 36 percent of total investment, followed by investors from the Czech Republic (32 percent), with Germany coming in third (12 percent).

CBRE predicts continued downward pressure on prime yields in the investment sector; however, this decline will be slower than in previous years. Currently, we monitor more than 50 ongoing transactions on the market with a total investment volume of over €3.3 billion, which could be closed by the end of 2017. We further predict that more than 50 percent of the total investment in 2017 will be regional.

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