Prague commercial property has healthy outlook

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Although there was a slowdown in the last six months of 2012, approximately 99,600 sq m of new office space came onto the commercial property market in Prague throughout the year.

The activity heavy district of Karlín was responsible for 37% of the new units and the largest single deal was Vodafone’s involvement in the prestigious City West project where it took on a deal to pre-lease 16,000 sq metres.

Official figures from the Prague office vacancy rate ended 2012 at 11.9% of properties still looking for tenants, which is effectively unchanged year on year. The cost of rentals also remained stable at a figure of around €20 per sq m per month.

However, investment volumes in 2012 were a dramatic 70% down on the previous year with a total of only €605 million being injected into the Czech commercial property sector over the entire country.

These figures were somewhat skewed by the massive projects which began in 2011 when retail sector investments were responsible for the lion’s share of the total.

Some analysts suggest that 2012’s focus for Prague offices as the main focus of investor demand is actually a more important indicator of the current health of the market.

With a large amount of new supply coming to market in 2013, opportunities for investors to buy into a growing market at a time of reasonable purchase prices and rental yields means the city is a hotspot for overseas money.

The Florentinum project will provide 49,000 sq m of new office space on the edge of the city centre and is expected to have a significant impact on the commercial office market in central Prague when it meets completion by the end of the year.

As with all international money transactions, moving money to the Czech Republic should be done with the help of an experienced currency transfer specialist.

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Prague commercial property has healthy outlook

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