“The Czech market offers only a limited number of large-scale residential portfolios, which are particularly attractive to institutional investors. Whenever such a portfolio comes to market, it typically attracts significant interest from both domestic and international capital and can significantly influence overall investment volumes in a given period. The transaction in Prague´s Písnice district confirms that rental housing is becoming a fully established investment asset class alongside traditional commercial real estate,” says David Sajner, Investment Director at Savills.

The acquisition of the Písnice residential portfolio also resulted in the residential sector recording its strongest quarterly transaction volume since 2020. That year saw the largest rental housing transaction in the Czech market´s history, both in terms of the number of residential units and transaction value. The portfolio comprised more than 42,500 older apartments in northern Moravia.

Large residential portfolios in the Czech Republic were historically developed during the former regime, when large state-owned enterprises developed housing for their employees. Over time, these assets gradually entered the open market, laying the foundation for institutional rental housing sector in the Czech Republic. Today, only a limited number of such portfolios remain, increasing both their value and attractiveness to investors. Key examples include the portfolio of approximately 42,500 units in northern Moravia, formerly owned by OKD, the recently acquired 760-apartment portfolio in Prague´s Písnice district, originally owned by ČEZ, as well as the residential portfolios of Třinecké železárny and Chemopetrol.

Funds are finding opportunities in new residential development
The limited availability of large, stabilised residential portfolios is increasingly prompting investors to look beyond existing housing stock and acquire projects directly from developers, typically while they are still under construction. They then arrange the letting and property management of the rental apartments either in-house or through specialised property management companies.

“Institutional investors see significant potential in larger rental housing portfolios due to their stable returns, efficient management and long-term investment horizon. Large-sacle, stabilised portfolios are among the most sought-after assets on the market and are typically held by investors for decades,” adds Marek Pohl, Head of Valuation at Savills.

Notable examples of modern institutional rental housing include:

• Nový Opatov and Stodůlky Residential (Britská čtvrť) for REICO ČS NEMOVITOSTNÍ;
• Vysočanský Mlýn II, Hloubětín and Brno Campus for Mint Living;
• the XPlace portfolio, a rental housing platform established by Arcibiskupství pražské;
• Opatov II for Kooperativa and Dostupné bydlení České spořitelny;
• U Pergamenky and Unicity Plzeň for Heimstaden;
• AFI Home projects (Kolbenova, Karlín and Třebešín);
• Fragment and Lihovar Smíchov projects by Trigema;
• the Hagibor Delta project for Invesco.

The build-to-rent segment is therefore becoming one of the fastest-growing areas of the Czech investment market. “The limited supply of high-quality residential portfolios, growing demand for rental housing and a stable long-term return profile are making institutional rental housing an increasingly attractive investment opportunity,” concludes David Sajner.