Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Investment in rental residential projects in Czechia tripled year-on-year

16/04/2024

• 167 million euros were invested in institutional housing
in the Czech Republic last year
• This represents 13% of the total volume of investment
in commercial real estate locally
• Rental housing market is growing in the Czech Republic, CEE and Europe

 

In 2023, a total of EUR 1,290 million was invested into commercial real estate in the Czech Republic, of which investment into rental housing amounted to EUR 167 million, three times more than in the previous year. The share of this segment within the total volume of commercial real estate investment amounted to 13%, what is a significant raise compared to the 3.3% previous high (with the exception of extraordinary year 20201). Investors are interested in Prague locations, but also in regional cities such as Brno or Pilsen. Investment into the Czech residential segment was the highest in Central and Eastern Europe last year, both in absolute volume and relative share. In the EMEA region, investments into the "living" sector accounted for 22%of the total invested volume last year.

 

Table 1: Investment in commercial real estate in the Czech Republic

  Year     Investment in rental residential (EUR million)     Share in total investment   
  2017   77   2.1%
  2018   87   3.3%
  2019   10   0.3%
  20201   1,312   48.8%
  2021   52   3.1%
  2022   55   3.2%
  2023   167   13.0%

Source: Cushman & Wakefield

 

The popularity of the residential segment in the Czech Republic is increasing among investors due to its stability. While other parts of the property market may experience significant swings, especially on the demand side, housing will always be needed. The increase in interest is driven by socio-demographic factors: ageing population, reduced average household size, continued urbanisation and population growth in the capital caused by migration. At the same time, the availability of owner-occupied housing is decreasing, and younger generations have different lifestyle requirements, therefore the share of rental housing will increase in the future.

Erik Müller, Head of Residential Advisory Services, Cushman & Wakefield: "The construction of apartments in the Czech Republic and especially in Prague has been insufficient for a long time and will remain limited in the future. After recovery in demand from households as a result of a drop in mortgage interest rates to the 3 to 3.5% range, the market is expected to absorb most of the available apartments in the short term, resulting in renewed upward pressure in prices. Therefore, in the long term, we expect the availability of rental projects for purchase by investors to be lower, the price per square metre to rise and yields on grade-A rental housing to fall below 3.5%. Most investors are aware of this and we already see preparations for acquisitions in 2027 and 2028."

80 percent of investors increase investments in housing

The residential market is also strengthening in other EMEA countries, where the term "living sector" also includes student and senior housing. It accounted for 21% of total assets held by investors in Europe last year, up from 14% in 20143.

In Cushman & Wakefield‘s European Living Investor Survey 2024, 53% of respondents said they had already allocated more than 20% of their portfolio to this segment. Almost 80% of respondents expect their investment to increase over the next five years, with 35% expecting it to increase significantly.

Erik Müller, Head of Residential Advisory Services, Cushman & Wakefield: "The survey shows a clear optimism in EMEA about the growth of the living segment, which is also supported by demographic factors, major societal changes and a lack of construction. This segment has already become an essential component of a balanced real estate portfolio and we expect its role to grow in the future."

The future: student housing and sustainability

Trends in the Czech Republic follow those in the main European markets (UK, Germany, Spain) – although to a lesser extent. Abroad, it’s more common for investors to target segments that are labelled as alternative in the Czech Republic: with growing numbers of both local and international students, half of the respondents are investing in student housing. In an effort to diversify within the living sector, they also target affordable housing, senior housing or co-living – segments that are expected to grow in the medium term.

Another trend that cannot be overlooked for the future is sustainability, as stated by investors into housing in the Czech Republic and across Europe. Nearly 80% of the survey respondents said it is a key aspect in their portfolio, and 70% are willing to pay extra for projects with superior sustainability features such as ground-source heat pumps, recirculation of (not only) rainwater, green facades or modern multi-storey timber buildings.

Erik Müller, Head of Residential Advisory Services, Cushman & Wakefield: "Although the Czech Republic is not yet a key market for institutional rental housing in Europe, the growing share of this segment shows its increasing importance. This is evidenced by several major transactions in the past two years, which include Rezidence Hagibor, bought by the American investment company Invesco Real Estate, or Rezidence Vysočanský Mlýn and the Veltex complex, acquired by the domestic investment fund Mint Investments. There are more active players in this market, including Arcibiskupství pražské, Česká spořitelna and others.“

 

1/ In 2020, the Czech Republic saw an extraordinary transaction of 42,500 apartments, which were bought by Heimstaden Bostad from Residomo.

2/ While with data for the Czech Republic and CEE the term "residential sector" is used, which includes only properties intended for standard living, the EMEA survey refers to the "living sector", which also includes, for example, student and senior housing.

3/ Source: RCA

Media Contact

Michaela Sedlbauerov
Michaela Šedlbauerová

Head of Marketing Czech Republic • Prague

Related News

shop, store
Retail market activity grows, especially in fashion, F&B, and health & beauty sector

In 2023, rental activity in the Czech and European retail markets significantly increased year-over-year, with a rise in the number of transactions and the volume of leased space across sectors and countries.

18/06/2024

retail park, shopping
Cushman & Wakefield and CENTERSCAPE: 20 years of cooperation

Cushman & Wakefield, a leading real estate consultancy, has been cooperating with CENTERSCAPE, an investment company that owns 20 retail projects in the Czech Republic, for 20 years.

10/06/2024

Industrail space, warehouse
Record demand for industrial space

Interest in industrial and logistics space in the Czech Republic was at a record high in 2023, up 50% from 2019, which means one million sq m in demand.

29/05/2024

Shopping centre, city, street
Cushman & Wakefield manages SC Opatovská

The real estate services firm Cushman & Wakefield has taken over the management of the OC Opatovská shopping centre in Prague 4, owned by Conseq realitní fond, a significant player on the Czech capital market. Cushman & Wakefield manages OC Opatovská

22/05/2024

Square, buidlings, hotel, properties,water fountain
Prague’s Pařížská Street: Zero vacancy, new projects to saturate luxury retailers’ demand

Luxury retailer activity remains high and focussed on EMEA’s key luxury streets, Prague’s city centre being no exception.

20/05/2024

studio, conversation, people, camera
Prague as a premium destination

Prague is no longer just about the city centre, but also about public space and gastronomy.

17/04/2024

Six Feet Office
Six Feet Office

The Six Feet Office concept offers rules and aids to enable and facilitate the observance of the safe six-feet distance for increased employee safety.

23/04/2020

Related Insights

European Luxury REtail
Research

European Luxury Retail

Explore the dynamics of the European luxury retail real estate market.
Sally Bruer • 15/05/2024
Czech Republic, Prague, Old Town Square, High Street
MarketBeat

Czech Republic MarketBeat

Cushman & Wakefield MarketBeat reports analyse quarterly Czech Republic commercial property activity across office, retail, industrial and hotel real estate sectors including supply, demand and pricing trends at the market and submarket levels.
Kamila Breen • 30/04/2024
Cover, woman in a meeting room
Insights • Economy

5-minute Real Estate Market Snapshot

Explore our 5-minute Real Estate Market Snapshot, a video overview of the commercial real estate market developments presenting the key trends in real estate investment, logistics, office and retail sectors.

25/03/2024
Office Fit Out Cost Guide - Web card
Research • Workplace

EMEA Office Fit Out Cost Guide - Czech Republic

Discover the essential data for planning and budgeting your office transformation in the Czech Republic with our Office Fit Out Cost Guide 2024. Begin optimizing your workspace in key cities like Prague today!
Thomas Moore • 20/03/2024
office buildings
Insights

Complete Asset Optimisation Guide

Discover expert strategies for optimising logistics, retail, and office real estate assets. Gain insights to maximise returns and improve performance.
Andie Penman • 29/02/2024
main streets across the world 2023
Research

Main Streets Across the World 2023

In this 33rd edition of Main Streets Across the World, we’ll explore the near-term outlook for the retail sector; headline rent and ranking changes for best-in-class urban locations across the world; key indicators and global main street rankings; and key trends to watch such as the cost-of-living crunch, e-commerce and more.
21/11/2023
Women Hotel City
Insights • Investment / Capital Markets

The Hotel Investment Scene in CEE

Welcome to our fourth edition of the joint Cushman & Wakefield–CMS report on the Hotel Investment scene in CEE: Getting Real about ESG in Hotel Real Estate
Bořivoj Vokřínek • 25/10/2023
office, statistics, laptop
MarketBeat • Economy

CEE MarketBeats

Cushman & Wakefield MarketBeat reports analyse quarterly commercial real estate activity in the CEE region (Czech Republic, Hungary, Poland, Romania, and Slovakia) across office, retail, industrial and hospitality real estate sectors including supply, demand and pricing trends at the market and submarket levels.
Marie Baláčová • 13/09/2023
Prague, Czech Republic
Research • Economy

Czech Real Estate Market View

A regular update on the commercial real estate market in Czech Republic.
Marie Baláčová • 27/04/2023

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies
MORE OPTIONS
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
Save settings