Header Image - Real Estate

Real Estate in Europe

€ 9 745 mil.

Source: MergerMarket

Real Estate - Graph 1

The data reveals trends across various property types, including industrial, shopping centers, office, high street, retail parks, and residential properties.

Over the years, industrial properties experienced a decline in prime yields, from 6.1% in 2016 to 4.5% in 2022. Shopping centers saw a similar trend, with prime yields dropping from 5% in 2016 to 4.5% in 2019, before increasing to 5.6% in 2022. Office properties exhibited a decrease in prime yields from 4.9% in 2016 to 4% in 2019, followed by an increase to 4.75% in 2022. High street properties experienced a decline in prime yields from 3.9% in 2016 to 3.5% in 2019, then increased to 4.65% in 2022.

Retail parks observed a decrease in prime yields, from 7% in 2016 to 5.8% in 2022. Residential properties, for which data is available only from 2020, displayed a decrease in prime yields from 4% in 2020 to 3.9% in 2021, followed by a slight increase to 4% in 2022. In conclusion, the commercial real estate market in the Czech Republic has experienced fluctuations in prime yields across various property types, reflecting the evolving dynamics and market conditions in the industry.

Real Estate - Graph 2

The data highlights the trends in investment volume, illustrating the evolving dynamics of the real estate market in the country.

Investment volume experienced a notable increase from 2015 to 2016, rising from 2,650 million EUR to 3,620 million EUR. Despite a slight decline to 3,540 million EUR in 2017, the investment volume remained significantly higher than in 2015. In 2018, investment volume dropped to 2,620 million EUR before rebounding to 3,100 million EUR in 2019. However, in 2020 and 2021, investment volumes declined to 2,710 million EUR and 1,900 million EUR, respectively. The year 2022 witnessed a further decrease in investment volume, reaching 1,820 million EUR.

In conclusion, the real estate investment landscape in the Czech Republic has experienced fluctuations over the years, with a general downward trend observed since 2017. The changes in investment volume reflect the evolving market conditions and investor sentiments in the country's real estate sector.

Real Estate - Graph 3
Real Estate - Graph 4
Real Estate - Graph 5

From 2015 to 2022, the investment volume by sector saw offices accounting for 14%-49% of all investments, industrial properties ranging between 11% and 34%, retail comprising 18%-40%, and other properties making up 1%-44%. The hospitality sector had a smaller presence, representing only 1%-16% of total investments.

The average asking price for a square meter of a newly built apartment in Prague has seen a steady increase from January 2021 to January 2023. In January 2021, the average asking price was CZK 120,000 per square meter, growing to CZK 156,600 per square meter by January 2023. This trend indicates an ongoing growth in property values in Prague's real estate market, especially for new developments.

Similarly, the average price of a square meter for renting an apartment in Prague has experienced a gradual increase from Q1 2021 to Q4 2022. In Q1 2021, the average rental price per square meter was CZK 238, rising to CZK 273 by Q4 2022. This upward trend in rental prices reflects the growing demand for housing in the city and the overall strength of the Prague real estate market.

If you are interested, you can contact us at:

Miroslav Linhart

Partner - Real Estate

+420 737 235 553

Tereza Gebauer

Partner - Tax & Legal

+420 725 530 501