Investment in rental housing in the Czech Republic exceeded €455 million in the first nine months of 2026, making it the second-largest segment of the real estate investment market after offices, with a 22% share of total volume, according to analysis by Knight Frank. The broader Czech real estate market recorded investment of more than €2.08 billion over the same period, down 19% year-on-year from 2025, though the third quarter alone showed a recovery with transactions exceeding €720 million, a 92% year-on-year increase.
Among the most significant transactions of the year was WOOD & Company's acquisition of 760 apartments in Prague's Písnice district, as well as the purchase of an affordable rental housing project in Strašnice and building A3 within the planned Rohan City project in Karlín.
Prague remains the main centre for institutional rental housing in the Czech Republic. Around 4,000 apartments in projects with more than 50 units are currently in operation, with a further nearly 2,400 under construction or renovation, equivalent to roughly 60% of the existing stock. More than 1,000 units are expected to be completed within the next six months, including the third phase of the Vysočanský Mlýn project, which will offer 306 apartments and is due to enter the rental market in the first quarter of 2027. Prague 9 has the highest concentration of institutional rental housing, with over 1,660 apartments accounting for 42% of the city's total stock. Affordable housing units represent approximately 16% of existing institutional rental apartments in Prague, with a further 312 under construction.
Average asking rents in Prague's build-to-rent projects stand at CZK 615 per sqm per month, rising 2.5% over the past six months and 1.5% year-on-year. This compares with an average of CZK 499 per sqm per month in listings from individual private landlords, approximately 19% lower than in institutional projects. Yields on prime build-to-rent assets fell by 50 basis points during the year to 4%, compared with 5% for prime office properties, placing Prague on a par with London, Vienna and Madrid. Further modest yield compression is expected based on transactions currently under negotiation.
"The persistent imbalance between limited supply and strong housing demand is supporting growth in apartment values and thus yield compression. Prague's trajectory so far differs from Western European capitals, where yields have stabilised and their future direction will be influenced not only by financing costs but also by the regulatory environment, particularly any potential rent regulation," said Lenka Šindelářová of Knight Frank. Josef Karas, Head of Investment at Knight Frank, added: "Institutional rental housing has moved in just a few years from a niche segment to one of the most sought-after investment opportunities in the Czech real estate market. Interest from domestic and international capital is strong, but the number of investment-grade projects remains limited. For developers, this opens an interesting alternative to the traditional sale of individual apartments, though it will be critical to factor in an institutional investor from the earliest stages of project preparation."
Institutional rental housing is also gaining ground in Brno, where 576 apartments in projects with more than 50 units are currently operational, with more than 400 further units under construction, representing over two-thirds of the existing stock. Notable projects include Dornych with 190 apartments and Montowna in the former Zbrojovka site. Average asking rents in Brno's build-to-rent projects stand at CZK 461 per sqm per month, approximately a quarter below Prague levels.
