Developers and larger investors are increasingly entering the rental apartment market

Developers and larger investors are increasingly entering the rental apartment market
Developers and larger investors are increasingly entering the rental apartment market

Commercial presentation Update: 04/02/2024 13:44
Issued by: 2/04/2024, 1:44 p.m

Prague – Developers and larger investors are increasingly entering the Czech market for rental apartments, which mostly consists of investment apartments owned by individuals. The reason is the increase in interest in rental housing caused by the reduced availability of owner-occupied housing. Investors most often focus on the construction and purchase of so-called build to rent projects (BTR), i.e. apartment buildings partially or fully furnished and adapted for rent. This follows from the data of the Association for the Development of the Real Estate Market (ARTN), the real estate consulting company BTR Consulting and the findings of ČTK. According to the estimates of the Rental Housing Association, the number of people living in the Czech Republic in rent may increase by tens of thousands less this year.

Build to rent are apartment buildings designed, built and operated exclusively as rental buildings. They can vary according to the level of equipment of the apartments – while some have only kitchen units, others are fully equipped with all furniture and appliances. According to BTR Consulting, fully equipped apartments are currently predominant in the Czech Republic. Their rent is usually significantly above average and in Prague at the end of last year it was approximately 542 crowns per square meter, while for ordinary apartments it was 401 crowns.

BTR projects are mainly built in Prague. According to the ARTN Trend Report and the BTR Consulting company, in 2018 there were a total of two institutional rental projects with 484 apartments in the capital, in 2023 there were 2,404 of these rental apartments in 16 projects. According to ARTN, 500 new institutional rental apartments should be created in Prague within two years. However, institutional rental apartments are also appearing in Brno.

According to the investment group Creditas, 67 percent of the rental market consists of private rentals. The representation of institutional rents in the Czech Republic is around seven percent. Despite the disparity, the group launched 200 fully equipped rental apartments on the market last year. In the future, he plans to increase their number even more, mainly in Prague and Brno. The developer Crestyl is also preparing 137 rental apartments in the center of Brno.

The largest institutional lessor of apartments in Prague is the Israeli developer AFI, which owns a total of 859 rental apartments in Karlín, Třebešín and Vysočany. In the second phase of construction of AFI Home Kolbenova, at the end of March, the company put 60 new fully furnished apartments on the market. He plans to complete every other 60 every month, which should total 327 apartments. According to the developer, apartment buildings in Kolbenov and Karlín are 90 percent full. In Karlín, among other things, the developer Trigem’s project with 140 furnished rental apartments was also completed at Invalidovná. Another 860 are being prepared by the company in various Prague projects.

Other large institutional tenants include, for example, SIKO and Dostupné bávní Česká spořitelna, which together are preparing less than 1,300 rental apartments. The Catholic Church, for example, is also gradually building its position on the market. The XPlace platform operated by the Prague Archdiocese bought 111 new rental apartments at the beginning of February this year and plans to buy 521 more apartments.

CR apartments investment rent

Tags: Developers larger investors increasingly entering rental apartment market


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