In 1999, Bruce Willis starred in the iconic smash hit, The Sixth Sense. In the thriller's most famous scene, Willis realizes what it means when the child protagonist says "I see dead people." Just like the movie, Prague’s master plan was "born" in 1999 at a time when the Internet was in its infancy, and offices still had fax machines. And like the movie’s freaky kid, anyone involved in development or city investments could tell that Prague’s master plan was nothing but a tattered, decrepit zombie.
Back in 1999, mortgages were only offered to people who didn't need them and there were barely any new residential developments anyway. It was a time when the brownfields of Prague 9 were still lined with dying industrial buildings and Karlin was a moribund district waiting to be flooded. A time when the city's office stock was a mere 1 million sqm (Vinohradská Office Centre and finished that year!)
Give the old plan its due: another three million sqm of offices went up since its passage, Karlín rebounded gloriously after the waters receded, and Pankrác got something resembling a skyline. But increasingly, Prague has grown almost in spite of itself. A quarter century of thousands of patchwork amendments left a document only consultants could read. This meant that every major project ran its own rezoning lottery, and every tall building was litigated one lawsuit at a time. The old plan was due to expire at the end of 2028. This would leave nothing behind it but a planning vacuum.
On 28 May, the city finally put the old plan out of its misery. Only three of 65 city councilors opposed Prague’s Metropolitan Plan, which takes effect on September 1. It zones capacity for 350,000 new flats (room for half a million people), many of which will replace those dying industrial buildings in Prague 9.
More than 700 localities will now be judged on their existing character instead of rigid color coding. And for the first time in the city's history, developers (and their opponents) will have a clear answer on how high a building can be. The new plan should provide a base level of certainty to the planning process…that’s possibly the single cheapest construction subsidy a city can offer.
Yes, the critics worry about schools and clinics for the newcomers, which is exactly why the plan binds developers through planning agreements to help fund them. Tellingly, even the loudest critic of the vote backed the document's content.
The twist in The Sixth Sense, of course, is that you don’t know Bruce Willis is dead until the end of the movie. We’ve all known Prague's old plan was ‘dead man walking’ for years. In September, it finally gets to rest.
Congratulations, Prague.
IBF BBQ
Save the Date! The always-excellent IBF Real Estate and Garden Party 2026 takes place on June 18 at Letenský zámeček Gardens. It’s a great send-off before the holidays offering excellent catering and high-quality networking. And this time, it’s even a chance to watch the Czechs play South Africa in the world cup! Personally, I’m pleased that the beneficiary of the charity tombola will be ThePrime Foster Fund, so I hope lots of you show up. For more information and registration details, visit the event web page.
People
REassurance has hired Martin Dolnak, an M&A specialist with a decade of Big 4 and fund experience across CEE. Dolnak advised on buy-side, sell-side, restructuring and distressed mandates; at REassurance he’ll cover the full gamut — W&I plus tax and legal contingent risk — deepening the tax bench alongside Karol Iwanowski. Managing director David Yearn frames the hire as a step "more into the traditional M&A transaction space." Interesting to see warranty insurance brokers poaching Big 4 talent to keep pace with deal flow.
RE News
Construction starts this summer on the Prague Congress Centre's long-delayed new hall, nine years after OCA Barcelona Architects and Prague's CMC won the design competition. The all-glass hall adds 5,000 sqm for roughly 1,500 delegates and links to the existing complex for 21,000 sqm in total — capacity Prague badly needs, given it ranks sixth in the ICCA congress league yet keeps turning away the biggest events for want of space. What finally unblocked the CZK 1.35bn project was ownership: the city bought out the state's 54 percent stake in the Pakul last summer, trading Faust House, land at Homolka hospital and a foreign ministry car park, plus CZK 2.21bn in cash. With the permit issued and a contractor already tendered, KCP is funding more than CZK 1bn from its own pocket and pencilling in completion for 2029.
Construction costs have jumped an average 15.3 percent for the 86 percent of Czech contractors hit by the Middle East conflict, CEEC Research finds. Asphalt, polystyrene and anything else with oil in its supply chain leads the charge, and Metrostav boss Jaroslav Heran says he's now pricing in risks "we previously didn't have to deal with significantly." Two thirds of firms have pushed the increases into contract prices, but only 9 percent passed them through fully because investors simply aren't swallowing it. The number that should worry the industry: 48 percent of the 155 firms surveyed have no crisis playbook whatsoever.
Savills is negotiating with a preferred buyer for Prague's Škoda Palace, home to the city hall's bureaucrats since 2006. Munich-based owner Manova Partners — the former GLL business, spun out of Macquarie in 2024 — is selling via closed tender, price undisclosed. The late-cubist Pavel Janák landmark offers 23,000 sqm of offices but is heritage-protected and will swallow serious renovation money; according to HN, an architectural study points to a four-to-five-star hotel with serviced apartments, though Savills' David Sajner told the paper that central Prague is short on quality offices too. The city's lease runs out in spring 2028. The city bought Václavské náměstí 42 from Komerční banka for CZK 3.5 billion in 2024; the bank's staff stay on as tenants until the end of this year, but city hall won't say when the move actually happens.
Prague new-build resi prices climbed another 2.1% in Q1 to CZK 180,300 per sqm, while the supply meant to cool them keeps evaporating. Deloitte's Develop Index counted 6,781 units on offer at quarter-end, down 6.7% on the quarter, spread across 313 projects (−2.8%) — the city is selling down stock faster than developers can replace it, and Deloitte's Petr Hána calls the mismatch the main brake on affordability. Prague 1 spiked 21.3% to CZK 317,800 per sqm, though that's probably a project mix issue. The more telling number is structural — the smallest 1+ layouts command the highest price per metre (CZK 198,000) on investor demand, and the index now sits at 275.9% of its 2014 base. Prague new builds have nearly tripled in a decade. Central Group holds the largest shelf, with 564 of the city's 4,845 free units.
YIT launched Virta Kladno, an 11-building district of roughly 750 flats at Kladno's Růžové pole. Phase one pairs the seven-storey Vanaja (68 owner-occupied units, 31–90 sqm) with the eight-storey Saimaa, 87 cooperative flats built for an investor — and that parallel ownership-plus-co-op model is the tell: affordability is the product, with Prague 20 minutes away. Construction starts this summer, phase one completes in Q1 2028.
Penta Real Estate is moving its BASE flex brand into Chalupkova Offices, carving a 2,300 sqm floor into private offices from 16 sqm with leases from one year, designed by Čechvala Architects and debuting as a pop-up office at Forbes Business Fest. The quieter half of the announcement: Penta is selling the company operating the Jurkovičova Tepláreň coworking to Alto Real Estate, which will run it under the building's own name and may expand to further floors. Flex is becoming standard equipment in downtown towers rather than a separate business, and Alto — already owner of the Sky Park offices — tightens its grip on the campus around the listed functionalist heating plant.
Bratislava leased 50,140 sqm of offices in Q1 while completing precisely nothing. Everything else is a function of those two numbers. Vacancy fell 71 bps to 13.38% (down 117 bps year-on-year) and prime rents climbed to EUR 21.50/sqm/month, with the Bratislava Research Forum expecting more — A+ space is scarce (7.72% vacancy against 16.97% in class A) and construction is thin, with only Dunaj (8,000 sqm) and Ganz House (10,300 sqm) due in Q3. Renegotiations made up half of take-up, new leases 42%. IT drove 34% of demand, but the public sector took the quarter's biggest deal: a 9,426 sqm new lease at Westend Gate for a diplomatic occupier.
PDS secured a final zoning decision for 269 municipal rental flats in Dolní Počernice, and not a single appeal was filed. The garden-city first phase, low-rise blocks with two parks and nearly 300 new trees, opens a four-phase build-out of at least 800 rental flats plus a school across the 18.5-hectare site over 10–12 years. PDS filed in June 2024 under the outgoing 1999 plan, and the next phases proceed under the freshly passed Metropolitan Plan, making Dolní Počernice the first visible baton-pass between the two regimes. Pražská developerská společnost, the city's affordable-housing vehicle, now manages over 900,000 sqm of municipal land slated for 6,000–8,000 flats, a portfolio valued at CZK 9.4 billion.
ThePrime Reader
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