The first rental project will include over 150 apartments. Skanska expects to sell it to a pre-arranged institutional investor upon completion. “The selection of a partner to take over, manage and rent the building will take place through a tender in the first half of next year. We already perceive strong interest from local and international investors, “said Michálek.

Skanska also requires rental apartments in other Prague locations. “For multiphase projects, we are talking about which parts can be considered rental housing. We will look for a buyer before the start of construction, it will allow us to maintain good cash flow, “added Michálek.

Fund exactly tailored

It is the construction of apartment buildings tailored to real estate funds and other investors that is a trend that is beginning to prevail in the rental housing market. They give developers who use bank financing a stronger position in dealing with financial institutions. In order for a tenement house to work well, it is necessary to have a clear idea in advance of its concept, the equipment of the flats, the target group of clients and the range of services offered.

“A modern rental apartment is 100% different from the apartment of individual landlords. The funds approach different localities differently. Future composers of tenants are adapting the equipment of flats, “described the head of the Finep development group, Tomáš Pardubický, at the conference Renaissance of Housing Housing, organized by Real Estate Academy.

The developer Marcel Soural, whose Trigema group is building its first rental project Fragment in Karlín, agreed to this. “It is not good if the investor comes to the finished project and buys one or two barracks,” says Soural.

Trigema wants to keep the houses built and manage them itself. It also intends to differentiate rental projects according to customer types. “Fragment is a premium project, rental apartments in the distillery will be in the middle category, the planned Top Tower is aimed at young people,” said Soural.

Prefabrication will reduce costs

The advantage of institutionalized leases is not only a long-term relationship with tenants and the offer of services, but also easier management of common areas. For one owner of a building, frequent disputes within the community of owners (SVJ) are eliminated. The prefabrication used abroad for standardized rental flats is to bring savings in the construction and future management of houses.

The Penta Group is a major developer that still holds the traditional sales of individual owners. “We want to follow rental housing, but as long as there are buyers on the market, we have no reason to go unexplored,” explained the head of Penta’s real estate division, Petr Palička. The current hot question is how to set the price for a pre-arranged investor in the construction of a tenement house. “The production of the project takes two years and the prices are now very turbulent,” Palička emphasized.

Investors dilute portfolios

The Flat Zone portal, which processes data from the residential market, has so far identified 76 projects owned by institutional investments in Prague. So far, in terms of the number of apartments for rent, it is only a unit of percentage compared to apartments offered on the market by individual owners. However, the trend is the opposite. “We will all sell institutional to landlords,” Pardubický predicts.

Among investors who traditionally buy mainly office and shopping centers, there is a growing interest in the residential area. The pandemic will find that it pays to “dilute” the portfolio of flats to help with possible fluctuations in income.

Rental housing may become the second second real estate segment in Europe. This year, in the first half of the year, it accounted for 23 percent of investment transactions monitored by real estate consulting firm Savills in twelve countries. The largest share, 28 percent, of the total amount represented by investments in office space.