Meanwhile…
I just searched for the word “Savarin” in my stash of old emails. And it turns out I received the press release announcing Crestyl’s acquisition of the Prague 1 property on Aug. 4, 2015. Ten years later, almost to the day, Crestyl secured the project’s planning permit.
Congratulations are obviously in order, but that’s a lot of water under the bridge. The project first started coming up in polite conversation a few years before what veteran professionals call the “Great Financial Crisis.”
Savarin’s original sponsor Ballymore fell victim to the same excesses as the rest of the market, albeit on an ambitiously large scale. No doubt it was difficult for Crestyl to wrest control of the asset, given the level of interest at that time. But that will have been as nothing compared to the last decade, which the developer spent navigating Prague’s moribund planning process, its convoluted politics and countless other hurdles.
At least Prague’s begun to get its own house in order — at its own, unhurried pace. Twenty years after the design plans for Wenceslas Square’s reconstruction were approved, the bottom half of the square has been completed.
As for the top half…it’s now a construction site. But it’s the bottom portion that’s crucial for Savarin. What with 100 Yards completing on Na Příkopě and plans for an exciting new project on nam. Republiky, the center of town could really be sparkling by 2030. But did it really have to take a full generation?
Let’s hope the new kids on the block won’t be so fatalistically patient.
RE News
Construction crews have begun foundation work on a new Alzheimer care center in Nový Jičín being built by Property Fund for Living SICAV. Work got underway on the specialized healthcare facility in 2024, two years after acquisition of the land. The 60-bed facility addresses regional capacity shortages and targets mid-2026 for its first residents.
This week’s dose of NIMBY culture is the outrage over a waste-to-energy plant planned near the Czech-Slovak border. Slovak firm GGES, part of Ivan Kmotrik's Grafobal Group, designed a futuristic "blob"-shaped facility without traditional smokestacks, located <1km from Sudoměřice. Skalica will hold a referendum on the plant, while Czech authorities are demanding multiple studies.
Czech mortgage rates have plateaued at around 5% with little prospect for relief. In fact, financing costs have surged. Three-year financing jumped from 3.1% in April to 3.8% by August, forcing banks to raise rates or cut their margins. The Fincentrum Hypoindex shows average rates climbed from 4.88% in June to 5.05% in early August, with several banks already implementing double rate hikes in July. Time to get used to 4-5% mortgage levels as the new normal.
Former (and future?) prime minister Andrej Babiš is the latest financial heavyweight to invest in Špindlerův Mlýn’s luxury accommodations business. DenikN writes that his company Imoba built a new chalet with 21 apartments on the site of an old one that cost CZK 400 per night. Its reportedly gorgeous replacement goes for between CZK 2,300 to CZK 6,000 per night.
AFI Home is achieving 70% tenant retention across nearly 900 Prague rental units during H1 2025 spanning its properties in Třebešín, Karlín, and Kolbenova. Primary departure reasons involve job-related relocations to other cities or abroad rather than service dissatisfaction, says AFI’s Elena Pisotchi. New projects include AFI Home Nová Elektra (291 units) and AFI Home V Korytech (519 units).
ZDR Investments closed CZK 1.8 billion in deals during H1 2024, boosting new fund investments 80% year-on-year. The group's 73-property portfolio reached CZK 17.2 billion (€700 million) with a WAULT of 7 years. Recent acquisitions include Austria's Zeltweg retail park and Czech Republic's AVENTIN Shopping Jihlava centre. Fund returns ranged from 6.44% to 7.82% over 12 months.
CTP acquired CTPark Pardubice Rosice, adding 52,000 sqm of production and storage space across two facilities to its Czech portfolio. Located near I/37 expressway and Pardubice airport, the park targets BREEAM Very Good certification with planned photovoltaic installations. Current tenants include 2VV and 4Camping.
Geosan Development's Re.Start Petynka received construction permits for Prague 6's largest residential project featuring 283 units across nine floors. Construction begins September 2025 with completion scheduled Q3 2028—40% has been presold.
Skanska began construction on D.O.K. Radlice, a 177-unit resi project that features what will be the largest Czech timber structure, dubbed "Dřevák." It’s located near the Radlická metro station and should complete by 2027.
Two years ago, office landlords could achieve prime rents of €27 near the Muzeum and Náměstí Republiky metro stations. Colliers writes that today, top rents reach €30 and they’ve added Národní třída to their list of locations that can support them.
Q&A: Michal Sotak (Cushman & Wakefield)
When foreigners accuse Czech funds of overpaying, what do they mean? Are they right? Or are they just saying what investors always say after losing a tender?
Intellectually, the key reason why western investors can't compete with local money is because they don't underwrite value growth. So, when they buy a building, they underwrite the rental income, but they don't underwrite the appreciation in value.
They won’t do it on principle?
Exactly. Whilst Czech funds will do it, because their performance measure, the KPI, the NAV growth actually does reflect cash-plus-revaluation. Revaluation is very often 50% of their returns. Local funds are incentivized to underwrite value growth and to manage it honestly -- because the valuation process isn’t 100% rigid. Western investors don't do this very often because they aren’t evergreen, open-ended structures. Their investors aren’t interested in it.
There’s no clear-cut way, then, to say who’s over-paying, who’s under-valuing and whether pricing has adjusted appropriately?
First of all, there has been a price adjustment. We went from sub 4% yields to in general five-plus yields. In the west the shift was let's say 250 basis points, whilst here it was probably less…but there was price adjustment. As for whether the Czech funds are overpaying… overpaying relative to what? They need to get their returns, which in the end are, let's say 3% to 5%. It's not so easy to judge what it means and they're getting those returns from the buildings that they're buying. In that sense they're not overpaying. Full interview
Quotes
🗞️”Prague lacks the dynamism it could have, projects aren't moving as fast as they could, and areas are struggling to come alive. On the one hand, we're not living badly, but the pessimism is justified—that drive, that potential we had 20 years ago, we're kind of squandering it these days.” Architect Jiří Řezák speaking with Seznam spravy.
🗞️“The new CNB forecast from early August sees neutral rates 0.4% higher than they were in spring, and this corresponds to mortgage price increases of roughly 0.2% in the coming months.” Vojtěch Duffek (4fin)
🗞️”We need to do a reality check. Otherwise, we're driving full speed into a wall.” Mercedes CEO Ola Källenius
🗞️”The main trend is a shift toward evergreen funds, which don't have a fixed time horizon. This trend is growing in the Czech Republic because previously closed funds are starting to become more open to investors. It means you can enter and exit them essentially without restrictions. We’re preparing for this and want to introduce such a fund in the near future.” Sebastien Dejanovski (Mint Investments) CzechCrunch
🗞️”The state should primarily support efficient, innovative and quality affordable housing projects. In construction, we must increase productivity. Not every apartment building needs to be a unique original, but can be built from standardized modules or prefabricated components. With both wooden and reinforced concrete prefabricates, production and completion of a standard apartment building is a matter of several months.” Robert Špalek Chairman of ČKAIT
People
-Slovenská sporiteľňa named Michaela Bauer as its new CEO, effective March 1, 2026, pending regulatory approval. Bauer spent 24 years at ČSOB Czech Republic and KBC Group, most recently as a board member and Senior General Manager overseeing digital banking and client strategies. She replaces Petr Krutila and will drive the bank’s digital transformation push.
-By appointing David Štrouf as Associate Director, Savills has added private equity and real estate consulting expertise to its investment team. Štrouf previously worked at Boston Consulting Group's Prague Principal Investor practice, leading due diligence on major CEE transactions. At Cushman & Wakefield, he participated in 15+ commercial due diligence processes across asset classes, contributing to deals exceeding €1.3 billion regionally.
Biz News
Czech investment funds reached CZK 2.1 trillion in AUM in Q2. If that sounds like a lot, converting that to €84 billion makes it a bit easier to visualize. Over half the total is tucked away in public mutual funds (CZK 1.29 trillion). Second quarter growth totaled CZK 146 billion, led by equity funds (up CZK 23 billion). ČSOB Asset Management is the market leader with CZK 951 billion under management, followed by Česká spořitelna (CZK 536 billion). Qualified investor funds grew 12.3% quarterly to CZK 812 billion.
Energy magnate Daniel Křetínský is closing in on potentially 2025's largest Czech deal—acquiring AAA Auto and its parent Aures Holdings from Polish-British fund Abris Capital Partners. The used car giant posted record 2024 revenues of 31.2 billion CZK (11% growth) selling 108,661 vehicles across five Central European markets. Due diligence is underway with Dentons advising.
P3 Logistic Parks customized its 43,000 sqm Lovosice Cargo hall with railway siding for its new tenant Yusen Logistics (Czech), who will handle storage and logistics for Mondi Štětí's paper materials. The facility accommodates 15-wagon trains and features 25 truck bays for intermodal cargo transfer under one roof. It’s Yusen Logistics' second P3 lease following P3 Prague D1.
After losses in Q1, US semiconductor firm Onsemi returned to profitability in Q2 with $170 million profit on $1.47 billion in revenue. It is partnering with Xiaomi on its YU7 vehicles and with Volkswagen EV power systems under newly-minted deals. Onsemi plans a CZK 42 billion investment in its Rožnov facility expansion, pending Brussels approval for over CZK 10 billion investment incentives.
The Czech National Bank improved its 2025 public finance deficit forecast to 1.9% of GDP, down from its previous estimate of 2.1%. Its directors warn that rising defense spending will push this figure out over the next two years. The CNB also upgraded real wage growth projections to 3.9% from 3.6%. Public debt is expected to reach — drumroll please — 43.5% of GDP during 2025. Meanwhile, the prospects for unemployment worsened to 4.4%.
PL vs CZ not great
ThePrime Reader
-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
-Savills strengthens Prague valuations team
-Gen Z’s Return to Office Comes at a Price