In the retail sector, 13 transactions took place in 2023 with a total value of 512 million euros. 11 transactions with a total value of 344 million euros were concluded in the office sector and 5 transactions with a total value of 132 million euros were concluded in the industrial sector. The last 11 transactions were in hotels, apartments and mixed-use.
TOP 5 retail transactions by volume in 2023:
1) TREI's portfolio
2) Pardubice Palace
3) ECE sells the last 25% of its shares in OC Arkády Pankrác to G City Europe Note Savlls: this is not the same as the 100% sale of Arcades to Trigea, which was signed at the end of the year, but will not close until January.
4) Shopping park Trutnov
This is Albert Česká Lípa.
Why does retail have the most investment?
"The dominance of the retail sector in this year's transaction volume is an interesting change compared to previous years. When we think about what could be behind this change, we observe several factors. Perhaps the most significant is the fact that even before the pandemic, retail assets saw a drop in prices. This means that in the current market environment, retail property prices appear to have been closer to their market value compared to other sectors, allowing investors to achieve returns in line with prevailing sentiment," says Fraser Watson, Head of Investment at Savills CZ & SK and further supplies:
"Another factor contributing to the attractiveness of retail is the fact that brick-and-mortar sales have increased significantly again after the pandemic. This proves that retail assets have a bright and stable future ahead of them and that they are able to face competition from e-commerce. The final reason is that most cities across the country will not see significant additional mall development. This allows investors to anticipate and assess the longer-term perspective of the competition, providing greater stability and certainty. We expect retail as an asset class to remain attractive to investors in 2024."
Investment in shopping centers
"In 2023, the volume of investment in retail parks increased approximately twice compared to the previous year, but within the total volume, retail parks had a share of approximately 8%. The strongest year for retail parks was 2021, when in the period affected by the pandemic they enjoyed high investor interest due to their resistance to negative market influences and their share of the total volume was 45%," says Vojtěch Wolf, Senior Investment Analyst at Savills.
In terms of the amount of money invested in 2023, the top three countries where the buyers came from were:
Czech Republic
Israel
France
All industries had flat earnings in 4Q2023. Retail yields were at 6.50%, manufacturing yields were at 5.25% and office yields were also at 5.25%.
Plans for 2024
Savills believes that inflation will fall to an expected level of 2% in 2024. A drop in inflation will then cause a further reduction in the CNB's base rate, and the ECB will probably do the same. The economy can be expected to slowly improve in the first half of 2024, which will be favorable for real estate investment.
