FM newsroom – office, investment. After several difficult years, real estate funds can shine again in the investment sky. They will be helped by falling interest rates and unblocking a large portion of money lying idle in savings accounts, not only in the Czech Republic. At the same time, it will strengthen the fund’s acquisition appetite, thereby expanding the scope for future returns to investors.
The real estate market expects a strong investment impulse this year. Interest on savings accounts is falling, and many Czechs plan to move their money elsewhere. At the same time, the Czech real estate market is stable and, in many ways, more efficient than in other countries. The funds will use the newly raised money for acquisitions.
A growing appetite for investment
Last year’s performance, especially of retail funds, will not be remembered fondly by more sensitive investors. The majority did not reach the giant Czech inflation. But this year has brought a welcome calm on the price development front, and real estate funds may be on course again, Officerentinfo.cz writes.
Recent figures show that investors, especially domestic ones, are regaining their appetite for Czech real estate market purchases. According to the analysis of the real estate consulting company Knight Frank, in the second quarter, real estate investments in the Czech Republic reached EUR 440 million, i.e. roughly CZK 11.1 billion. That’s 23 % more than last year. At the same time, the largest transaction was not handled by an investment group or a real estate fund but by the Prague municipality in the spring.
Municipality moves
In the second quarter of this year, the market was dominated by office investments, accounting for two-fifths of the value of all transactions. This is mainly thanks to the representatives of Prague, who, even before the holidays, decided to buy a set of buildings on Wenceslas Square from Komerční Banka for CZK 3.5 billion. In the future, the municipality wants to move officials here from the Škoda Palace, where the city only rents.
Rental projects on the rise
The analysis also showed rising interest in rental projects, which accounted for a quarter of all investments. For example, the MINT residential fund announced in June the purchase of more than three hundred apartments in the Prague Vysočanský mlýn project from Metrostav, where it wants to build rental housing. At the end of June, the developers Finep and AFI Europe also announced cooperation on the construction of more than 800 rental apartments in the ninth and tenth city districts.
