According to the Royal Institute of Chartered Surveyors’ (RICS) commercial property survey, the strongest recovery appears to be in the Czech Republic as surveyors were particularly positive on the prospects for capital values.

The survey indicated that the recovery of commercial property investment in Eastern Europe however is lagging behind Western Europe, with the exception of Italy as surveyors reported a fall whereas everywhere else they stated there was an increase in Q4 2009.

The Czech Republic, Poland and Russia reported a rise in activity whilst Hungary, Romania and Turkey saw a fall in investment activity.

Felix Hicks, economist at Capital Economics, stated: ’ Investors attempting to re-deploy capital are focusing on the best assets in the most liquid markets. In this context, much of Emerging Europe might seem too risky for the time being.’

However those surveyed by RICS stated that the Czech Republic would most likely see rental values fall as oppose to rise in Q1 2010, whilst over the whole year Capital Economics believes that all property values will decline by -4% in local currency terms.
Hicks stated: ‘ Although a supportive monetary policy stance should allow the Czech economy to grow by +1.5% in 2010, that will be too weak to prevent further falls in rental values.’