BTR (BUILD-TO-RENT): THE FUTURE HOUSING TREND TAKING OVER CZECHIA AND THE WORLD

Are you seeking a stable investment opportunity in the residential sector, or considering a strategic shift for your development project toward long-term rental housing?

Recently, I have regularly had the opportunity to work both with owners of development projects focused on institutional rental housing and with private and institutional investors who regard this model as a cornerstone of the future. Yet in discussions with numerous investors and family offices, I still find that the BTR concept remains relatively new to many.

On this page, I provide a comprehensive overview of how the Build-to-Rent model works, its origins, international data, and its dynamic expansion across the Czech market, where Prague is emerging as the hub of this new real estate benchmark.

WHO THIS ANALYSIS IS FOR

This overview is primarily intended for:

• institutional and private investors seeking stable cash flow generation from professionally managed rental housing
• land owners and property developers considering a shift from traditional unit sales to a long-term buy-and-hold income model
• investment groups and family offices looking to diversify their portfolios by acquiring complete residential buildings or entire development schemes
• real estate market professionals and enthusiasts who wish to understand the structural transformation of the Czech residential market.

1. WHAT IS THE BUILD-TO-RENT MODEL AND HOW IT DIFFERS FROM TRADITIONAL DEVELOPMENT

Build-to-Rent (BTR) is a modern investment and construction model focused on building residential assets that are intentionally designed and designated from inception exclusively for long-term rental, rather than for the individual sale of units into private ownership.

This sets it fundamentally apart from the traditional Build-to-Sell (BTS) model, where a developer constructs apartments with the objective of immediately selling them off to end buyers.

Key characteristics of BTR schemes include:

• Single institutional ownership, where the entire building or master development is held by one entity, ensuring consistent standards of management and maintenance.
• Professional property management, which eliminates day-to-day burdens for both tenants and individual private landlords.
• Community spaces and amenity services, such as a dedicated reception, on-site security, shared co-working spaces, fitness and wellness facilities, or integrated parking.
• Modern technology, high energy efficiency, and sustainable materials that lower operational expenditures and protect long-term asset value.

BTR schemes offer residents security of tenure, high flexibility, and elevated service levels, particularly appealing to young professionals, expatriates, and families seeking a contemporary urban lifestyle without tying up capital in property ownership.

2. ORIGINS AND INTERNATIONAL EVOLUTION: FROM AUSTRALIA TO THE US

The BTR concept did not emerge in a vacuum. It first took shape in Australia during the 1980s in response to rising demand for quality rental accommodation suited to professionals and families in major metropolitan areas. Australia served as a pioneer, proving in practice that professionally operated, dedicated rental schemes are highly appealing to tenants and exceptionally lucrative for institutional investors. Sydney and Melbourne remain core hubs of this asset class to this day.

United Kingdom

In the British market, BTR has experienced exponential growth since 2015. By 2024, institutional rental housing accounted for approximately 40% of all new residential units across major conurbations such as London, Manchester, and Birmingham.

According to Savills data from Q2 2024, the UK BTR sector reached record benchmarks:

• the total volume of completed BTR units exceeded 115,000, representing a 24% year-on-year increase
• a further 45,400 units were under construction
• 100,700 units were documented in the planning pipeline
• overall, 261,870 units were active across various development stages.

Investment activity in the first half of 2024 deployed 1.2 billion pounds of capital into the British BTR sector. Demand has also been heavily driven by demographic shifts. Single-person households in the United Kingdom climbed to 8.4 million, representing 13% of all households nationwide. The growth of this cohort, significantly shaped by population aging and an increasing number of men over 65, exerts enduring pressure on the supply of flexible, serviced rental housing.

United States

In the US, the institutional rental sector has held a dominant position for decades. In 2024, more than 150,000 new BTR units were delivered, representing 15% of all newly constructed apartments across the nation. Gateway metropolitan markets such as New York, San Francisco, and Austin remain key targets for institutional capital.

3. CZECH REPUBLIC: PRAGUE AS A HUB FOR INSTITUTIONAL LEASING

In the Czech Republic, BTR projects are currently in a phase of dynamic acceleration. The primary catalyst is Prague. The underlying driver is the steep increase in residential property prices, which rose by 10.7% nationwide in 2024 and by a full 18% directly within Prague. This reality places homeownership beyond the financial reach of a significant portion of the population and generates sustained demand for quality rental living.

Consequently, alongside established market players such as AFI Home, SIKO, Trigema, and Dostupné bydlení České spořitelny, other major developers are entering the sector. In the first half of 2024, FINEP, Penta, and Metrostav, firms that previously concentrated almost exclusively on building units for sale, announced entries into major BTR projects.

Municipal districts and the public sector are also actively participating:

• Prague 11 and the Opatov II project: Sekyra Group concluded an agreement with Dostupné bydlení České spořitelny and Kooperativa to construct over 300 rental apartments, with scheduled completion in the first quarter of 2025.
• New Letnany District: The Prague City Council opened discussions with the state regarding land holdings in Letnany, where a new urban district for up to 50,000 residents is planned. As stated by Finance Minister Zbynek Stanjura at the Affordable Housing Summit and Housing Councillor Adam Zabransky, the municipality holds a strong interest in this development. Petr Urbanek, Director of the Prague Development Company, noted that the transaction may encompass an asset swap for other municipal land parcels suitable for state defense purposes.

4. PROMINENT BTR PROJECTS IN PRAGUE

The Czech market already features successful, operating schemes that set the benchmark for the entire industry:

• Luka Living (Prague, Stodulky): The pioneer of the modern BTR concept in the Czech Republic. This mixed-use building integrates residential rentals with commercial spaces, office facilities, a wellness suite, and a fitness center. The asset seamlessly connects to an existing retail center and offers sheltered, direct access to the Luka metro station.
• Fragment Karlin: An iconic development delivered through the collaboration of developer Trigema, Qarta architektura studio, and artist David Cerny. It features 140 fully furnished premium rental apartments, uniting cutting-edge architecture with advanced technology. The scheme claimed honors at the International Property Awards in London and was named Residential Development of the Year at the prestigious CEEQA awards.
• Delta Hagibor (Prague 10): Part of an extensive master-planned district on the border of Strasnice and Zizkov led by Crestyl and Sekyra Group. It offers premium contemporary rental living in close proximity to the Zelivskeho metro station.

"Institutional rental housing is not merely a passing market trend; it is a logical response to macroeconomic real estate shifts. For investors, BTR delivers a stable, cash-flowing asset with professional management; for the city, it provides a pathway to accessible, contemporary living."

Maria Koprivova

ARE YOU SEEKING A SUITABLE INVESTMENT OPPORTUNITY IN THE BTR SECTOR?

Whether you are an investor looking to acquire selected residential units, a complete apartment building, or evaluating participation in large-scale BTR schemes focused on long-term institutional residential leasing, I can provide access to off-market opportunities.

Through long-term direct collaboration with property owners, development companies, and investment groups, I represent a portfolio of assets handled discreetly outside public property portals.

I would be pleased to discuss your investment criteria and introduce you to current opportunities across the Prague market. Simply fill out the brief contact form below this article to arrange a private in-person or online consultation.