IMMOEAST Annual Report 2006/07

88 IMMOEAST Annual Report 2006/07
Developed market at
West European level
Second strongest subsegment
with nearly 700%
increase in revenues
6.1.3. Czech Republic
Country information
Population in mill.
2006
10.3
Real GDP increase in % 6.1
GDP per capita in EUR 11,010.0
Inflation in % 2.5
Source: Eurostat
The property market in the Czech Republic
In recent years, certain sectors of the Czech property market have reached levels that are comparable
with Western Europe. The office market – which is concentrated primarily in the capital city
of Prague and comprises roughly 2 million sqm – was characterised by an excess supply of new
space up to 2005. However, a change in market conditions during 2006 led to a mismatch with
new space of 160,000 sqm facing demand of 190,000 sqm. The result was a decline in vacancies
to nearly 10%.
The residential market in the Czech Republic covers approximately 4.5 million units, with more than
12% located in the capital city. Roughly half the units are owner-occupied and 30% represent rental
apartments, while the remainder are owned through cooperative housing societies. The steady rise
in disposable income has triggered a parallel increase in the share of single households and the
demand for high-quality housing. Consumer spending has also grown, providing added benefits for
the retail sector. In addition to Prague, numerous shopping malls have developed in the secondary
population centres. The general acceleration of economic momentum and increasing global business
connections have also led to an increase in the exchange of goods, which has created additional
demand for logistics space.
The development of business in the Czech Republic
With revenues of TEUR 40,153.4, the Czech Republic represents the second largest subsegment
of IMMOEAST. The increase of 76.9% in revenues over the prior year resulted from acquisitions in
Prague and Brno. EBIT rose by more than 700% year-on-year, clearly exceeding the overall development
of IMMOEAST, and is related to the above-average development of revaluation results.
Key data on the Czech Republic
2006/07 2005/06 Change in %
Revenues in TEUR 40,153.4 22,703.6 76.9%
EBIT in TEUR 157,071.0 19,550.8 703.4%
Letable space as a % of the total portfolio 14.1% 27.0% -47.8%
Fair value in EUR million 1,303.4 470.5 177.0%
Fair value as a % of the total portfolio 14.5% 24.4% -40.6%