International Property News

Finep starts multi-billion housing, office project

8th April 2008

Czech developer Finep has launched construction of a huge residential and office project Zapadni mesto (West Town) in Prague, which the company describes as the largest urbanistic project in the Czech Republic since the 1989 fall of communism.

The first stage on an area of 375,000 square metres is worth Kc6bn. The total investment in the locality will definitely exceed Kc50bn, Finep board chairman Michal Kocian told journalists Tuesday. At present, the company has 1.15 million square metres at its disposal in the locality.

Talks with leading Czech banks on the financing of the project are in the final stage, said Kocian. "Their requirements have increased modestly given the US (mortgage) crisis," he added.

The first stage of construction is scheduled to be completed in 2012, and the whole project could be finished in 10-15 years, depending on demand for housing.

Once completed, West Town could beat Prague's giant housing estate Jizni Mesto in terms of area. The central square in West Town should be comparable to the area of Prague's Wenceslas Square, Finep said.

Kocian said talks would finish soon with an entity interested seriously in a lease of a substantial part of the office space. He refused to disclose the name of the company, however.

"It is Siemens," a source familiarised with the commercial real estate market told CTK. Finep spokeswoman Pavla Temrova declined to comment on the information. "I can confirm that talks are under way," Siemens spokesman Petr Sedlacek told CTK.

Finep is not the only owner of the project. Its partner, Prague's real estate company Ungelt, holds 50 percent.

Since established in 1995, Finep has sold more than 4000 flats in 14 residential projects. It has specialised in the Prague market, but recently has decided to expand to Slovakia, and is considering entering Czech regions as well as the markets in Serbia, Ukraine, Bulgaria, Romania, Austria, and Vietnam, Kocian said Tuesday.

Source: Prague Daily Monitor