While foreign funds are hesitant, domestic Czech capital is not afraid of large acquisitions: from luxury hotels to office complexes. The share of Czech investors in total transactions has reached 78%. Overall, the Czech commercial real estate market posted its strongest half-year results since 2017, according to Colliers' latest report.
The Czech real estate investment market entered 2025 with unprecedented momentum. The first quarter brought an extraordinary volume of transactions amounting to €1.48 billion, surpassing full-year results for 2023. Although Q2 saw a decline to €644 million, this is still a solid result that confirms continued investor interest.
The total volume of investments for the first half of 2025 exceeded €2.12 billion, surpassing the full-year figures recorded in each of the previous four years. The number of transactions increased by approximately 70% year-on-year, with a significant increase in the number of large deals valued at over €100 million.
Czech investors are playing a key role in the current boom. This dominance of domestic capital stems from several factors. Local players benefit from deeper market knowledge and a greater willingness to take risks associated with less traditional assets.
Locally regulated real estate investment funds, into which part of Czech citizens' savings are directed, also play an important role. Several groups of private investors and high-net-worth individuals remain active in the market. Together, they have significantly expanded the pool of liquid buyers.
The market shows healthy diversification across different asset types. In the second quarter, industrial and logistics properties accounted for 33% of total volume, hotels for 23%, and offices and retail for 12% each. Residential rental properties accounted for 10 per cent.
Increased liquidity in the market is beginning to put pressure on yields from premium assets. Yields from prime office properties have fallen by 25 basis points to 5.25 per cent, with a similar adjustment affecting industrial and logistics properties, where the yield now stands at 5.00 per cent. Yields on premium shopping centres remain at 6.00 per cent for now, although this figure may be revised following the expected sale of the Palladium shopping centre.
This positive trend will continue in the second half of the year. Annual investment volume could reach approximately €3.5 billion, which would make 2025 one of the three most successful years for investment in the Czech Republic in the last decade. Negotiations are currently underway on several significant transactions involving office buildings and shopping centres.
