In its first year, international real estate advisor Savills has successfully managed to establish a full service office in Prague to provide real estate advice in the Czech & Slovak Republics.

Ben Maudling, CEO at Savills Czech and Slovak Republics, spoke to Developemnt NEWS about the pace at which the company has established itself and 2018 trends in the real estate market.  

You have been operating on the Czech market for one year, how do you consider your achievements?

It was a very successful first year and we are satisfied with our progress. We have established full service office, which means we have departments that cover investment, leasing, property management, valuation, research and building & project consultancy. This is important as each service compliments the other, gives a wide and in- depth knowledge of the property sectors and therefore allows the company to provide a high-level service to its clients. The quality of the staff Savills has employed is outstanding. It has managed to attract some of the most experienced real estate people in the market. What makes the Savills team different is that many of them have worked both on the advisor and client sides of the business. This allows them to bring a completely different level of understanding to instructions, which can make all the difference to clients.

From the client’s perspective, how are clients perceiving you performance?

You would have to ask them, but we feel the Savills approach is welcomed. We have already advised on two important completed investment acquisitions for institutional buyers, provided technical advice to a number of developers and investors and have a property management department which is instructed on 21 commercial properties with a value exceeding EUR 600 million. With a strong pipeline of work for 2018, the company expects further growth and we see an eager client base wanting to engage with us.

How do you assess the market outlook for 2018?

As another year of healthy growth is predicted in western and central European economies, Savills expects property to remain an asset class of choice in 2018 in CEE also. Capital flows into real estate will remain strong with allocations to the sector still rising. However, it is expected that both investors and lenders will continue to adopt a cautious approach and focus on quality assets in the best locations, which means product availability is highly restricted. CEE is expected to outperform economically the European average and therefore could attract more investors searching for yield. 

What kind of other trends could be expected?

Occupier demand for business space will remain strong, especially in Prague. A shortage of high quality and modern accommodation will force companies to plan ahead their spatial requirements and wait until new developments come online. This means that we shall expect a significant number of pre-lets. Ecommerce is growing fast. The online retailer industry is expected to increase by another 14% in 2018 and the logistics sector will remain the main beneficiary of this trend. It is expected that there will be further ‘leakage’ of investment capital from traditional property sectors (offices, retail and industrial) to alternative sectors such as residential (housing, student housing and senior housing), hospitality, healthcare, data centres, renewables, infrastructure and others. Plus let’s not forget mega trends such as urbanisation, innovation and the impact of technology – all of which should be closely followed by the real estate sector. Savills is at the forefront of this from a research angle, looking at future cities, millennials and the rise of transient lifestyles.