ARTICLES LABELLED WITH TAG Czech Republic

We can see many significant changes, architectural achievements and positive trends in the Czech real estate market. Nevertheless, there is still much to do, says Zdenka Klapalová who is the President of the Association for Real Estate Market Development (ARTN) and has followed the Czech real estate market as an expert for more than 30 years.

CTP has officially launched the construction of a CZK 1.5 billion office building which will close the first stage of the Brno Ponávka complex development and will offer its tenants state-of-the-art technological, and environmentally sustainable solutions. At the same time, a modern urban park worth CZK 30 million is being built in the complex, as a cooperation between the developer and the City of Brno, as well as the third part of the cycle path connecting the Ponávka and Vlněna complexes.

Zeitgeist Asset Management has obtained a loan from Česká spořitelna for the largest ever refinancing of its portfolio in the amount of €113 million (CZK 2.7 billion). In total, it concerns 23 properties with a total value of €220 million, located in various Prague locations. These are mainly residential properties with apartments for rent and private campuses for student accommodation.

Helaba is providing long-term financing for Czech project developer Crestyl for the revitalisation of the well-known NR7 office building in a prime downtown location in Prague.

VGP has concluded a lease agreement with Pilulka Lékárny for 4,479 sqm of warehouse space in the newly completed hall "I" in VGP Park Olomouc. The company is one of the largest pharmaceutical and pharmacy groups in the Czech Republic and Slovakia. The warehouses in Olomouc will be used for supplying customers in several regions: Brno, Ostrava, Olomouc and Prostějov. The new premises have been implemented in the BREEAM Very Good green certification.

Ryan Wray, Managing Director and Principal at Avison Young, Czech Republic, talked to Property Forum about the perils of today’s macroeconomic conditions investors may reckon with in their decision-making and looked at possible scenarios and working strategies for office occupiers in the Czech office market.

Brno's office stock reached 635,900 sqm in the first half of 2022 and 75,300 sqm is being built there. At the same time, Ostrava's office stock has 219,100 sqm and builts 21,000 sqm of offices. None of these regional metropolises had finished a new office building in the first half of this year. In both localities, prime rents increased reflecting the general pressure on prices in new developments, reports the Regional Research Forum.

The fears of a recession are likely to cool down the red-hot real estate market in CEE countries, Erste specialists expect. According to them, this will be influenced mainly by surging inflation, the cost of credit and cooling down of the borrowing, and shrinking of the disposable household income which will also worsen the borrowing appetite in the coming periods. There is a change in the respondent’s behaviour too. Whereas respondents from Poland, Hungary and Croatia are open to buying or building a house, Czechs, Slovaks and Slovenians are less inclined to do so, say Erste experts in their recent special report.

In Q2 2022, Prague's current office space volume reached 3,75 million sqm and 215,700 sqm is under construction. It is expected that the construction volume will increase by 74,000 sqm of office space by the end of 2022. Rents grew by 18% y-o-y and further growth in coming periods is also expected, JLL's Prague Office Market Q2 report says.

The Czech state continues to unsuccessfully trying to sell Prague's functionalist Broadway Palace from the 1930s. The Office for Representation of the State in Property Matters (ÚZSVM) offered it for the third time in an electronic auction, this time with a starting price of CZK 1.05 billion (€43.153 million), but no one took part in the auction, a spokeswoman for the office told the Czech News Agency.