Some major players in the real estate sector such as Real Estate Karlín Group (REKG) are exploring development potential across the Vltava river on Rohanský ostrov, while on the opposite bank Lighthouse Group is committed to offering modern office space within its Prague Marina project.

And with Prague City Hall expected to pick an investor at the end of this year to develop a 20-hectare site on Rohanský ostrov, described by some property experts as the most lucrative plot of land up for grabs in the Czech Republic, opportunities are not running dry along either side of the river in neighborhoods close to the city center.

Lighthouse Group is about to announce its planned construction of two office buildings worth Kč 500 million (€ 1.8 million) next to the developer’s Prague Marina residential project in Prague 7–Holešovice. “Construction of the first two office buildings will be launched in spring 2008,” said Tamir Winterstein, Lighthouse Group’s CEO. The buildings will offer 12,000 and 4,000 square meters respectively. Two more office buildings will follow at the Marina site.

“Prague 7 has great potential in the future thanks to its location close to the city center and good transportation access,” said Jaromír Smetana, head of the Prague office of global property consultancy DTZ Holdings. Prague 7 currently offers 128,000 square meters of office space, of which 67 percent is refurbished and 33 percent new, according to DTZ data. The district represents 6.1 percent of total office stock in the Czech capital and its 10.6 percent vacancy rate is relatively high compared to 5.5 percent for the whole of Prague, which is mainly due to its higher proportion of older office buildings, DTZ said.

Other planned projects in Holešovice include redevelopment of Bubny railway station where Orco Property Group, which acquired the 27-hectare site last year for more than Kč 1 billion, plans to build a mixed-use development of apartments, leisure, office and retail space within the next 10 to 15 years, Smetana said. Jean-Francois Ott, president and CEO of Orco Group, told daily Hospodářské noviny in September that it planned to invest between Kč 30 billion and Kč 50 billion in building a university and hospital on the Bubny site. Orco Group could deliver the university and hospital in the form of a public-private partnership (PPP).

AFI Europe, another international player, is building the Classic 7 Business Park in the district. In addition to Lighthouse Group’s two projects—Prague Marina and Holešovice Port—other major projects in the area include reconstruction of the Holešovický pivovar brewery by ING Real Estate Development. The mixed-use complex called A7 Arena Holešovický pivovar, to be built on the site where former První pražský měšťanský pivovar made Měšťan brand beer, includes offices, retail space and a residential section. AFI Europe’s Classic 7 Business Park, part of which will be located in the restored historical buildings of a flour mill, will offer five A-class office buildings and additional retail space. The first phase of this project totaling 16,000 square meters is scheduled to be completed in Q1 2008.

“I believe that higher concentration of the planned projects will have a synergy effect that will lead to overall rejuvenation of this area,” DTZ’s Smetana said.

Lighthouse Group’s Prague Marina project has an estimated value of € 300 million and it will offer some 1,000 above-standard apartments by the river when completed in 2012. The first phase of Prague Marina, some 340 apartments, will be delivered by the general contractor Metrostav in May 2008, Winterstein said. “Some 65 percent of the apartments are sold and that is for us a reason to start planning the second phase of Prague Marina,” Winterstein said. Investment costs in Prague Marina’s two phases are some Kč 2 billion including costs of the land, he added.

Prague Marina will have some five phases in total and besides 1,000 apartments will offer 100,000 square meters of office, retail, sports and entertainment space, Winterstein said.

Source: Czech Business Weekly