The Czech real estate market has exceeded expectations in 2024 and confirmed its position as an attractive European market. According to the latest CBRE Q4 2024 report, it has shown clear signs of recovery and is expected to strengthen further in 2025. The NEMO Fund focusing on long-term investments has taken advantage of these opportunities.
The Czech investment market has shown great resilience in recent years, even compared to Western markets. According to a CBRE report, the Prague office market has already recovered from the pandemic and the vacancy rate is only 7.4%, the lowest among the capital cities in Central and Eastern Europe.
Investment activity is expected to grow across all segments, driven by favorable prices and improved yields. Overall, commercial real estate transactions in the Czech Republic in 2024 amounted to approximately €2 billion, representing a 40% year-on-year increase.
Josef Eim, Vice Chairman of the Board of Directors of ČMN, which manages the properties for the NEMO Fund, confirms this: “The Czech office market is characterised by extraordinary resilience. While Western Europe and the United States face downturns, Prague maintains a low office vacancy rate and remains an attractive destination for investors looking for a safe and promising place to store capital. The NEMO Fund is thus trying to offer investors the opportunity to participate in this stable market. The main reason for this stability, unlike Western commercial real estate markets, is the prevailing excess of demand over supply, which is a bittersweet externality of the slow pace of construction management in our country, which unfortunately ranks among the slowest in the world.“
According to CBRE data, the construction of new office buildings in Prague has slowed significantly, leading to a shortage of quality space and potential rent growth. Prague currently has one of the lowest levels of projects under construction in the CEE region. This means that the supply of new offices will remain limited in the coming years, creating unique opportunities for investors focusing on the real estate segment. In addition, the vacancy rate in Prague is only 7.4%, which is one of the lowest in the CEE region. In addition, the demand for Prague office space is still high, despite the economic slowdown.
This combination of factors – a slowdown in construction, a lack of quality space, rising rents and a low vacancy rate – creates potential for investments in existing office buildings in Prague.
In 2024, NEMO Fund strategically strengthened its portfolio by acquiring four office buildings in Prague: Idea Office Building, Smíchov Gate, Anděl 17 and Victoria Vyšehrad. This transaction doubled the size of the fund in a single day and brought tenants such as Google, Mercedes-Benz, CEMEX and Notino to the portfolio. NEMO Fund continues to adhere to a conservative strategy that allows a flexible response to market developments and maximise returns for investors. Thanks to this, the fund achieved a return of 6.21% for 2024, manages assets worth CZK 5.2 billion (€208 million) and is trusted by more than 11,800 investors.
