CBRE: Prague districts are preparing for an influx of new residential projects
Investment activity of developers has been supported by the recovery of the market
CBRE, the world leader in the commercial real estate sector, has confirmed the growth of investment activity on the Czech real estate market. The recovery of the market has given support to the appetite of developers and the total amount of investment in the construction of new housing projects in Prague is estimated at several tens of billions Czech Crowns.
Among the most exposed locations in Prague are Vysočany, Karlín, Holešovice and Modřany. “Currently, we are monitoring six locations in Vysošany under development with a total land area of several tens of hectares,” says Jan Hospodář, Head of Sales & Acquisitions, CBRE. Many developers revived their interest in multi phase residential projects, whereas the trend in recent years has been focused on single-phase projects of ca. 100 residential units.
“A number of developers are buying development sites where they expect their projects to be developed over ten to fifteen years,” explains Jan Hospodář. The recovery of developers' investment appetite has also been triggered by the expectations of buyers and sellers converging. Previously, there was little interest in problematic projects and while projects with favourable characteristics rarely came to the market and even then were available at potentially unrealistic prices. Currently, we are seeing interesting projects in good locations which appear to have sensible prices for both buyers and sellers. Residential developers are investing in a range projects from those with valid building permits making it possible to start construction immediately and those which require a change of land use before obtaining all the necessary planning and building permissions.