Meanwhile…
I spent two interesting days in Brno at the annual conference of the Association of Business Service Leaders (ABSL). It’s not hard to understand why they chose the country’s second city. Its members (most of the multinationals) employ over 175,000 people in the Czech Republic – nearly 45,000 of them work in Brno in more than 70 shared service centers, also known as business service hubs.
Given how much office space all those people occupy (Brno has 700,000 sqm in all), I was surprised not to see more real estate agents and developers in attendance. What better place to socialize with end users and find out about their plans for the future? I suspect there’s a generalized lack of awareness about the size of the Business Services sector.
That can’t be said of the panelists on the office panel discussion I moderated: Jana Vlkova (Colliers), Jakub Kodr (CTP), Adam Zvada (Scott.Weber) and Eva Nykodymova (Skanska). Along with the outsized impact Business Services have had on Brno, we discussed how crucial it is to listen to the needs of these companies, which are continuously innovating.
It's a sector that’s been evolving quickly since the 2000’s. Back then, call centers needed little more than four walls, lots of space for rows of desks and tons of phone line capacity. Over time, however, they evolved into ever-more sophisticated operations, providing technical support not just to customers from around the world, but specialized services within the corporation itself. Entire global divisions (tech, payroll, support, etc.) came to be placed in single locations.
That’s why 40% of the Brno employees working in ABSL member companies are foreigners. And it’s why you hear English spoken so much as you walk around the city. The city’s transformation over the past 20 years is every bit as remarkable as Prague’s.
Judging from the panel discussions I listened to, the transformation of workplace and work itself is being radically overhauled. Not surprisingly, artificial intelligence was the topic or sub-topic of nearly every panel. Will fewer employees be needed? Can they (or should they) be forced into the office 5-days per week?
The unresolved remote work question is just one in a series of real estate dilemmas that companies need to figure out. Jana Vlková (Colliers) said that office sizes can come down. But she warns that offices that are less than 50% occupied feel empty and discourage employees from showing up. On the other hand, anything over 85% feels busy and tends to force employees into locations they don’t like.
There are other considerations as well. Newer offices offer lower service costs, for example. If you combine those with a smaller office, you can achieve substantial savings. Vlková offered some useful, current benchmarks: 14 sqm per workstation; 7 sqm per employee and a desk sharing ratio of 0.65. For companies who end up moving, however, fit-out costs often come out to around €800 per sqm.
The arrival of AI will only intensify the need for business leaders in all sectors to do these kinds of calculations as they rethink their real estate requirements.
Promises, promises
Economists are giving the new Czech coalition government little hope of fulfilling all of the promises they made prior to the elections. Reducing state debt at the same time as cutting taxes and providing mortgage subsidies doesn’t sound like an entirely coherent strategy.
One promise PM Andrej Babiš had better keep to is to focus on the housing crisis. The new government has pledged to fast-track building permits, declare housing as a strategic state interest, support rental and cooperative housing and approve PPP schemes for affordable housing. What's missing in these sensible-sounding ideas? Numbers.
Look across the pond in New York, where the election of a young democratic socialist has thrown everyone who can live there into outright panic. Zohran Mamdani promised to build 200,000 affordable housing units by raising taxes and by borrowing. Can he deliver? Or isn’t that the point?
The growing global housing crisis is forcing politicians to make promises they have little hope of keeping. On the other hand, the lesson to take out of all of this is that politicians who insist on ignoring the issue will have to get a real job.
RE News
With over 200 tickets sold, we’re already halfway there! I’m getting emails every day now for Tickets, Tables and Partnerships for ThePrime Gala, which takes place on January 28, 2026 at Obecni dum. Tickets won’t stay this cheap for long! (corporate tables are currently CZK 88,500 + VAT).
HSF System SK has completed work on a 14,600-sqm XXXLutz store in Nitra for the investor RAS Immobilien SK, featuring 5,092 sqm of retail hall space—50% larger than the previous Centro Nitra location. Roughly 17% of the building’s electricity consumption will be provided by solar panels.
Alto Real Estate acquired a 49% stake in Penta Real Estate's Chalupkova project in downtown Bratislava through a joint venture. As part of the deal, the company is to become the 33,000 sqm building’s first tenant. Jakub Cigler Architekti is in charge of the design, while Penta will retain management control. Penta RE’s director Michal Rehak said the fact that two financially powerful groups have combined on the project will have a positive impact on the entire district.
Meanwhile, in Prague, Penta Real Estate and PSN have the planning permit in place for Vinohradská 8, the replacement project for the former Transgas building. It’s a CZK 3.5 billion mixed-use project near Wenceslas Square that’s scheduled for Q2 2028 completion. It too is designed by Jakub Cigler Architekti and will offer 200 apartments, 7,500 sqm of office space and another 1,400 sqm of services and retail.
Crestyl began construction on Kappa, a 250-unit residential building at Prague's Hagibor development near Želivského metro, targeting late 2027 completion. It’s chosen Metrostav DIZ as general contractor, having secured over 50% presales before the groundbreaking. This is the fifth residential phase at Hagibor that’s been designed by Ian Bryan Architects.
The online retailer Shein has been banned from opening its first store in Paris after the discovery of childlike sex dolls on the site. Shein is one of these ultra-cheap online retailers along the lines of Temu, but this one sees a future in brick and mortar sites. The incident has led the Paris prosecutor’s office to put Shein, AliExpress, Temu and Wish under investigation by the national police’s child protection agency over claims of the distribution of sexual and violent content.
The late Peter Kellner’s villa in Vrane nad Vltanou has gone on sale for a reported CZK 49.9 million. The 3-storey structure was designed by the famed architect Josef Plekot and is being sold by Win & Win reality. The 477 sqm building sits on 1,644 sqm of land. It earned an honorable mention in the Chamber of Architects’ Grand Prix prize in 1995. The new owner needs to be ready to sink more money into it, however, as an advertisement announcing the sale describes the building as in need of reconstruction.
The developer FETTERS management has announced a new resi project called Viladoma Voborského, located in the Modřany district of Prague a few minutes from the river. Two villas will offer a total of 12 flats of up to 116 sqm including their own garden, a terrace and underground parking. LOXIA took part in the interior design of the project, which is the developer’s second. Its project Panorama Branik is already under construction. More than half of the flats in the new scheme are already sold.
Prime Holdings Group has completed the sale of Łódź 1, a 6,400 sqm office project located in the center of the city it’s named after. But this appears to be just a fraction of the eventual value of the property, which includes the 10,000 sqm plot the building sits on. Prime Holding secured enough urban planning approvals to carry out 45,000 sqm of mixed-use space, including residential.
Quotes
“If you want to reduce emissions in Europe, you should either make dirty energy, very, very expensive, hoping you will discourage it. Or you should make clean energy very, very cheap. Both methods will work, ultimately. But making cheap energy, even if you have to subsidise it, ultimately avoids the hill that you are dying on at the moment which is extremely expensive energy.” Petr Barton (Natland)
People
-Jiří Čepán has been promoted to Chief Investment Officer at Upvest. He joined the firm in 2018 as an investment analyst and progressed to Investment Manager before his promotion—working on most Upvest projects and specializing in junior debt financing and direct equity investments for Czech real estate. Čepán holds a degree in Finance and Valuation from Prague University of Economics.
ThePrime Reader
-GARTAL ramps up output, beginning with City Lofts
-Signal Space raises the entertainment bar in central Prague
-Marketa Vrbasová (Knight Frank): Auto Suppliers Face Indirect Hit from Trade Wars
-Pavel Sovička (Panattoni): Productivity is the problem. Not developers
-David Sajner joins Savills
-Energy efficiency still low in Prague office sector
-Crestyl achieves planning breakthrough on Savarin
-Michal Sotak (Cushman & Wakefield): Emotions drive investment
-Michal Bilý (108 Real Estate): Q2 new industrial leases strengthen
-Robert Ides (ARETE): We’ll recycle our equity abroad
-Martin Klán (Amadeus): Nový Máj’s butterflies should stay
-Karin Shalev Shogol (AFI CZ): We want 5,000 flats in 5 years
-Savills: H1 investments soar to €2.1 billion in Czechia
-Fred Hlobil (FH+ Real Estate): New money is coming into young sectors
-CPI offers to buy back 7% bonds at 7.75%
-Reality check for landlords: Prague Q2 resi rents fall
-New Podcast with Mark Robinson (EnCor Wealth Mgmt)
-Weak demand & resi boom stunt office development
-Huge changes coming to Prague’s high street