Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

PRAGUE-Czech Republic property investment activity picked up in third quarter due to progress on long-awaited transactions, with three deals worth €48 million, but volume in the first three quarters was still 89% lower at €100 million, according to the latest DTZ Property Times. Full-year volume is forecast at around €300 million.

Yield decompression has resulted in prime yields holding at around 7% for office and retail and above 9% for industrial property. Vacancy rates in office and industrial markets have risen slightly due to lower demand combined with occupier downsizing and new supply.

Office take-up has been rescued from a historic low by renegotiations - extension of contracts - accounting for almost half of gross take-up. Net take-up was down 45% from Q2 2009 and 62% year-on-year at 24,900 square meters. Including renewals/extensions, the falls were 15% and 33% respectively. Prague vacancues edged up to 10.6%, and prime rents fell 8.7% from a year earlier at €20 to €21 a square meter.