Meanwhile…
In any big city, you can recognize the hottest nightclubs by the length of the lines to get in. Young people will stand for an hour or more to get into the most popular ones, praying the all-powerful bouncer at the door will wave them through.
You can also tell when those clubs are closed to the public for an invitation-only party: instead of beefy bouncers guarding the entrance, you see elegant hostesses with clipboards, checking off names on a list given to them by the manager.
This brings me to how the incoming Babiš government wants to dust off plans for a centralized construction office. At the moment, there are hundreds of construction offices scattered around the country. One for almost each little municipality. Babiš blames this for the absurd 246 days it takes to win approval for the average construction permit, and he wants to reduce the number to just one.
This drive to centralize fits into a more general disappointment with decentralized authority and bewildering social change. The majority of people are now so disillusioned with minorities — and with the chaos of overly-consensual democracy — that they seek powerful leaders to clean up the mess. Get rid of all the moral and institutional clutter.
But is a Central Construction Office the answer to Czech procedural chaos? The argument against has always been the loss of local control to anonymous bureaucrats located hundreds of kilometers away. Local officials should have authority over what can and can’t be built, say the critics.
I don’t buy it. IMHO, the real power over permits is held not by elected mayors, but by the heads of the two dozen bureaucratic offices that developers have to visit, one-by-one, hat in hand, begging for a stamp of approval. The boss at each of these offices has the authority of that nightclub bouncer, deciding which projects get the green light -- and more importantly, how long applicants will wait.
And that's the problem. We need hostesses checking off lists, not self-aggrandizing bouncers. A single construction office should be the one submitting a developer's permit application to all the different departments (transportation, fire, health & safety, etc.). Those departments need only go through a checklist of technical issues to make sure the applications conform to a clear set of regulations. Finally, it should be the construction office that coordinates the timely processing of those responses, not developers.
Ultimately, whether it's a single Central Construction Office or a few hundred of them isn't the crucial point. Plenty of countries (Poland, Germany, Austria) have decentralized systems. What they also have are clearly defined procedures and spheres of responsibility.
As long as we have bouncers at the door and chronic procedural muddle, I doubt it'll matter how many construction offices there are.
Also…
Speaking of hostesses and bouncers, the guest list for ThePrime Gala has now reached 240! That’s just over halfway to whatever the final number of people end up squeezing into Obecni dům's stunning Smetana Hall. As with residential pre-sales, ticket prices will rise as we get closer to capacity. As for the Awards, I'm pleased to say that my new intern Iveta Hoangova will be helping coordinate the nomination submission process. If you don’t have your application form yet, please get in touch with her at iveta @ theprime.cz. For ticket orders, either write us at gala @ theprime, or directly to the online form at bit.ly/GalaTix26
RE News
CPI Property Group has executed a debt refinancing operation, issuing €200 million in 4.750% green notes due 2030 to retire shorter-dated obligations. Having announced pricing in late October, CPI is now going ahead with redeeming €256.5 million of its 2.750% notes maturing in May 2026. Noteholders will receive 100.178% of par value on the redemption date. The transaction extends CPI's debt maturity profile, but at price of a higher coupon rate (4.750% versus 2.750%), since lending rates have risen significantly since the original notes were issued during the pandemic era.
Hotel owners will be interested to hear that Prague's Václav Havel Airport handled 11.5 million passengers during the summer season—7.7% more than 2024 but still 3% below pre-pandemic 2019 levels. Foreign travelers made up 54.5% of traffic, up 1.4% y-o-y. Winter operations have expanded to 45,000 flights reaching 127 destinations (including 15 new routes).
Sticking with stats, Czech consumer price inflation accelerated to 2.5% y-o-y in October from 2.3% in September, driven by food and non-alcoholic beverages, which climbed 3.6%. Worryingly, coffee jumped 25%. Overall housing costs rose even energy prices declined—electricity fell 3.6% and natural gas dropped 7.9%—but services increased 4.6%. Clothing and footwear prices confounded the trend by continuing their fall from previous months.
AFI Czech Republic launched construction on AFI Home V Korytech in Prague 10's Strašnice district. This will be 519 rental units built in two phases completed in Q2 2028 and Q2 2029, with Metrostav DIZ as general contractor. Designed by m4 architekti, the project features 400 underground parking spaces, seven ground-floor commercial units, green roofs, and photovoltaic panels. Nearly half the apartments are configured as the sort of 2+kk and 2+1 layouts that young professionals and families seem to go for.
PSN held a groundbreaking ceremony for Vršovické JITRO on Litevská Street—144 residential units plus 35 townhouses. The project's been designed by QARTA Architektura and is being built by Průmstav. The development includes rooftop terraces, wellness facilities, a fitness center, and a communal garden. Completion is expected for H2 2027. PSN's director was on hand for the groundbreaking, as were the local mayor and - intriguingly - the artist Jan Kalab.
Knight Frank has put the value of Pražská developerská společnost's 757,000 sqm land portfolio at CZK 9.40 billion as of June 1, 2025. That's up significantly from the CZK 8.84 billion it was worth in August 2024, to say nothing of the CZK 2.9 billion valuation it received in its initial 2021 assessment. PDS has managed to do this through painstaking strategic land assembly work and by securing zoning changes for its Nové Dvory and Palmovka projects.
ThePrime Pod
Quote of the Week
“The Developers Association welcomes the principles of the new construction law that the ANO movement presented today. This is a positive signal for the entire Czech Republic. Czech construction needs fast, predictable, and professionally guidedchanges—and today's discussion showed that we can finally return to solutions that were professionally sound and had the potential to move the country among developed European states.
In the election period before last, we actively supported the construction law reform. That proposal brought fundamental systemic modernization and real hope that building permit approvals would speed up significantly. Unfortunately, the [Fiala] government canceled or significantly weakened most of the good measures.
We view the principles presented by ANO today as a return to simplicity, responsibility, and common sense. If they manage to re-establish the principle of each permit application having a single procedure, a single decision made by a single office of the state's administration, we can achieve a noticeable acceleration of building permit approvals in a short time—especially for projects that people need most: housing, kindergartens, schools, social and health facilities, or transport infrastructure.” Zdeněk Soudný (Association of Developers)
People
-Savills appointed Marek Koyš as Lead Sustainability Consultant in its Building & Project Consultancy team. Koyš brings seven years of Asian experience from Shenzhen and Hong Kong advising corporations and startups on European sustainability regulations. He'll work with investors, developers, and occupiers to work through the EU's tricky legislative frameworks and help them identify regulatory risks (along with business opportunities).
-GARBE appointed Zuzana Štěpánková as Business Development Manager for Czech Republic, where she'll focus on leasing, new business opportunities, and tenant relations. Štěpánková spent 2020-2025 as Senior Consultant at iO Partners, handling industrial and logistics leasing advisory services.
ThePrime Reader
-David Mazáček (Upvest): We’re not trying to replace banks
-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