TheWrap – April 5

Cushman & Wakefield reports that investment volume in CEE fell 55% to just €5 billion, which was the lowest figure in 10 years. Poland saw the biggest decline (68% down), while Czechia suffered “just” a 25% drop. That’s thanks largely to Czech investors, which were responsible for 75% of the volume. Prime yields have been rising since 2022 and industrial properties are now entrenched as the most expensive asset class regionally. Cushman & Wakefield predicts that renewed economic growth and a predicted cut in interest rates should help boost transactions by 10-15% in 2024.

CTP saw its profits fall by 16% in the Czech Republic, but its rental revenues grew 7% to nearly CZK €250 million (CZK 6.2 billion). That’s with roughly 27% market share, according to its sales director Jakub Kodr. “We’re seeing a change in demand,” he says. “Logistics and e-commerce aren’t growing as quickly as before, but they still have their place and potential for growth.” CTP is currently building around 400,000 sqm of new space. It has more than 600 tenants in Czechia and two-thirds of its new contracts closed last year were with existing clients. It’s deal of the year in 2023 was a 53,000 sqm lease with the Taiwanese electronic components producer Inventec.

Colliers has produced an updated map that correlates office rental rates with Prague’s metro stations. Not surprisingly, it shows that offices near the Muzeum or Náměstí Republiky stations have the highest rents (€26.50 to €27). With employers fixated on ways to get their employees to come to the office, metro access is seen as a huge advantage. “It’s important that offices are no more than a 10-minute walk from the nearest metro station,” says Jana Vlková (Colliers). The cheapest offices in Prague are found around Petřiny or Náměstí Míru, where no new office space has been built recently to help drive up rents. The metro’s new D line won’t start running before 2029, but there are already plans for new office buildings around them, says Colliers’ Josef Stanko. “Prices in these locations will have to respect the levels in established office markets,” he says. “Market pressure to add value in the form of innovative, sustainable buildings with diverse amenities will push rents up everywhere.” Download the map here.

Speaking of stations and offices: Roztyly Plaza. Passerinvest’s newest 21,700 sqm office building received its occupation permit at the end of March with just half of the GLA already under lease. With an eye to providing amenities, the developer has filled the ground floor with a pharmacy, a specialized drone shop and a modern cafeteria and cafe with the optimistically-named Perfect Canteen. Eduard Forejt of Passerinvest Group says the goal was to connect attractive work environment with as many comforts for employees as possible. A green roof with seating, full Wi-Fi coverage and beautiful views should be a draw on warmer days. Tenants will also be offered memberships at Balance Club Brumlovka.

Affordable housing isn’t just for essential workers anymore. London is now too expensive for the teams of UK’s major employers. Those companies are now in cost-cutting mode, which means they’d like to stop financing the lifestyles of Londoners, who have ridiculous housing costs to cover. The answer, apparently, is to hire in regional cities instead. “For policy makers looking to stimulate the London economy, these findings should cause concern,” James Chaplin (Vacancysoft) told Bloomberg. “The trend to regionalization is undeniable. Occupancy ratios remain below pre-pandemic levels. Meanwhile Manchester increasingly is positioning itself as the capital of the North.” How soon before these problems come to a CEE capital near you?