Debt-starved Czech property inv. mkt shrinks -data
LONDON, July 2 (Reuters) - The Czech Republic's commercial property investment market has all but ground to halt with just four transactions completed in the first half of 2009, a study by broker CB Richard Ellis (CBRE) (CBG.N) showed.
CBRE said half-year investment volumes in the central European country fell 87 percent to 73.1 million euros ($103.1 million), compared with the six months to Dec. 31, 2008.
At the peak of its appeal in the first half of 2007, Czech investment volumes were about 1.5 billion euros, CBRE data showed. A further 1.1 billion euros of transactions followed in the second half of 2007.
"The commercial real estate investment market in the Czech Republic is currently experiencing an extremely low level of activity as a result of the world economic downturn," Stuart Bloomfield, head of capital markets at CBRE's Czech unit said.
"In many cases there continues to be a discrepancy in the expected pricing levels of vendors and potential investors," he observed, explaining the stalemate in the once-buoyant market.
Bloomfield said the market was waiting for the establishment of a new benchmark yield for institutional grade investment property in the retail, office and industrial sectors.
However, even those buyers willing to pay current prices were having problems sourcing debt from nervous lenders.
"Financing remains difficult to obtain as banks are extremely cautious, have lower allocations for real estate financing and require higher levels of equity participation," Bloomfield said. (Reporting by Sinead Cruise; Editing by Andrew Macdonald) ($1=.7087 Euro) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)
