Retail property investments continue to attract investors´ attention within the EMEA region as well as in the Czech Republic. Due to a lack of quality retail schemes available for purchase in the European core markets, investors´ interest has been broadening in terms of geographies as well as retail asset classes. Professional asset management that requires specific know-how is key in defining the success of any (and especially retail) property investment.
The expanding economy and steadily growing purchasing power in the EMEA region stand behind the continuous interest of investors into European retail properties. In 2016, the European retail property investment market witnessed a record year in terms of transactional volume and this year´s outlook seems to be very positive as well. The lack of prime retail schemes available for purchase in the core markets of Western Europe has expanded investors´ radius geographically (assets being explored all over Europe) and diversified their demand in various asset classes of retail properties (such as shopping centres, high street properties, retail parks, portfolios of supermarkets, retail warehouses).
The CEE region has become increasingly attractive since 2015 showing retail investment volumes growing at a double-digit pace annually. The Czech Republic has been – along with Poland – the most sought-after retail investment destination in CEE. Last year, retail property investment reached EUR 639 million in the Czech Republic, compared to Q1 2017 when the transactional volumes ran high at EUR 886 million. Both international as well as domestic capital poured into the best performing retail properties in the Czech Republic.
“In 2016, retail property investments in the Czech Republic reached EUR 639 million,” said Hana Kollmannová, Associate Director at JLL Czech Republic. “The total investment volume splits into EUR 446 million of domestic capital and EUR 193 million of international capital. However, in the first quarter of 2017, retail investment ran high at EUR 886 million thanks to the sales of two important shopping centres (Olympia Brno and Tesco Letňany) to international investors. Czech investors bit into 31 percent of the total Q1 retail transactional volume. Traditionally, foreign investors scrutinize Czech retail properties worth EUR 20+ million and thanks to the global sources of their capital they are also able to bid for the large schemes and regional portfolios.”
South African investors (NEPI and Rockcastle), who entered the Czech property market last year by the acquisition of regional shopping centres, have made their base in the CEE and become the fifth largest single source of capital on the European market last year. This year we expect their further expansion in CEE and to explore other European markets – especially in Southern Europe.
“The sale of the premium shopping centre Olympia Brno to Deutsche Euroshop, which JLL intermediated, has definitely been the largest single ticket retail transaction in the Czech property market so far,” comments Hana Kollmannová from Capital Markets team at JLL Czech Republic and continues: “Given the fact that there are several regional shopping centres in various stages of the sales process, we expect retail investment in the Czech Republic to reach beyond EUR 2 billion this year.
