PRAGUE-While growth in Czech property investment remains moderate, CB Richard Ellis says it is seeing increasing international interest amid a shift from UK and French markets last year to German and CEE markets. Czech trading links with Germany are seen as an advantage.

The small size of the market in the Czech capital Prague will play a significant role, with strong competition likely for any properties coming on the market. But vendors expecting a price boom will be disappointed due to a healthy level of investor caution. While increased competition will likely lower domestic investors’ market share, CBRE projects growth to around $1.5 billion in 2011 from $948 million last year when it was clearly dominated by domestic Czech and Slovak investors, led by CPI Group.

CBRE does not believe local players will be forced out by growing international competition. Global investors will focus on well-located prime properties as opposed to regional assets. On the other hand, local investors have a different perception of risks on the regional markets and may realize better returns by going to markets where they face lower competition.