Czech Republic Real Estate Report Q2 2013: New research report available at Fast Market Research

From: Fast Market Research, Inc.
Published: Mon Apr 29 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, 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 2012, with positive signs emerging, 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 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.

Full Report Details at

Key Points

* We remain cautious in our outlook for the Czech construction sector. We forecast negative real growth of 2.2% for 2013 and have downgraded our 2012 estimate to negative growth of 11.4%, since no optimistic plans for the industry were seen. However, we expect a tentative return to positive territory by 2014.
* 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.
* We expect the Czech economy to return to mild growth in 2013 of 0.5% in real GDP terms, following an estimated contraction of 1.3% in 2012. The government's continued commitment to fiscal austerity will preclude a rebound in government and household consumption until 2014. Meanwhile, investment growth is likely to be sluggish owing to a high degree of uncertainty regarding the eurozone's economic outlook. This will leave net exports as the principal contributor to growth in 2013.

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- United States Real Estate Report Q2 2013
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