Czech supply of restaurants and hotels for sale or rent increased by half last year

by   CIJ News iDesk III
2023-01-09   22:32
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The supply of restaurants and accommodation facilities for sale or lease increased by about half last year. At the same time, prices of these properties fell due to low demand. This is according to information from the real estate portal Videobydlení.cz and the real estate agency Next Reality. According to the president of the Association of Hotels and Restaurants, Václav Stárek, about 70 percent of pub operators ended their energy price fixation at the beginning of this year and are thus facing increased costs.

The number of restaurant offers for lease on the Videobydlení.cz portal rose 42 percent year-on-year to 300 listings last year, while restaurant offers for sale rose about 45 percent to 220 listings, according to a company press release. Last year, the portal registered about 600 listings in the accommodation for sale category, up 47 percent from 2021, it said. Due to low demand, prices for these properties fell 30 to 50 percent last year, and should continue to get cheaper this year, the company estimates.

"Property owners will first reduce the price for rent, and if they fail to find an operator, they resort to subsequent sales," said Jakub Veverka, chief economist at Videobydleni.cz. According to him, properties on the main avenues of regional cities are also being offered. At the beginning of this January, the number of restaurant offers for lease rose by almost 15 percent compared to last December, Veverka added.

Robert Hanzl, director of the real estate agency Next Reality, confirmed the trend of increasing offers of restaurants and hotels for sale or lease. Last year, compared to 2021, the firm saw about half the number of listings, with 73 properties added to its portfolio. According to Hanzl, prices have been falling since 2020, but last year the drop was more moderate, amounting to about 10 percent. "Entrepreneurs are not currently venturing into this segment and when properties are sold, they often re-lease them for other businesses, guesthouses for example, to private cottages or apartments," he said.

Hotel and restaurant operators began to leave to a greater extent during the coronavirus pandemic, when the industry was first hit by restrictions, Stárek said. This year, as last year, the situation will be complicated by expensive energy and the fact that people are increasingly cutting back. In restaurants, Stárek said, this is particularly evident in lunchtime meals.

"For restaurants, the fundamental problem is that perhaps more than half of the operators are in rented premises, which significantly worsens the economic situation at a time when there are any crisis situations on the market," Stárek said. If restaurant tenants decide to leave the properties this year, it will be difficult for owners to find replacements, he added. In the case of hotels, the trend of temporary takeovers by other businesses is likely to continue this year, Stárek said.

Source: Videobydlení.cz, Next Reality and CTK