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Czech Republic Real Estate Report Q1 2013: New Research Report Available at Fast Market Research

Fast Market Research recommends "Czech Republic Real Estate Report Q1 2013" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 03/07/2013 -- The Czech Republic Real Estate report examines the commercial office, retail, industrial and construction segments throughout the country in the context of a cautiously optimistic outlook for a market vulnerable to eurozone sensibilities.

With a focus on the three principal cities of Prague, Plzen and Brno, the report covers market performance in terms of rental rates and yields over the past 18 months, and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of government austerity on a market where cash flow is already restricted. The key growth areas driven by increasing activity on the part of international investors, and the potential of the domestic consumer market, are also explored with corporate growth strategies looking to the country for expansionary opportunities.

However, despite the encouraging signs and the relative strength of the market by regional standards, BMI remains cautious. Rents and capital values remained stable over the first six months of 2012, but we saw a wide disparity in the 2011 results which reflect market volatility and will see correction further down the line as the market is considered increasingly overpriced. However, there is currently no indication that there will be anything more than gentle rises in rents and capital values going forward, and yields are likely to remain at present levels going into 2013.

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Key Points

- We believe the Czech Republic's construction industry value will tentatively enter positive territory in 2013 as the European environment picks. However, we believe that caution should be exercised. Due to strained cash flow, a cap on public spending, a renewed freeze on EU funds and the repercussions of a tough financial climate, the risks are weighted to the downside. Although we expect the market to see positive growth from 2013 onwards (we forecast annual average real growth of2.9% between 2013 and 2021), hopes of a robust recovery remain a distant possibility.
- A bleak outlook is expected for the country's residential and non-residential segment, which we now expect contracted by 4.3% y-o-y during 2012. However, we anticipate a slow rebound in the sector, with annual average real growth of 1.6% forecast between 2013 and 2016.
- Nevertheless, the Czech Republic still represents an attractive and strategic investment avenue for the global construction majors, based on its geographical location as well as the increasing need for a new infrastructure fleet. However, there are downside risks based on continuous GDP data revisions, the weak outlook for short-term opportunities and the transport ministry's renegotiating of contracts, which raise questions over both industry and country risks.

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