Arcona has had its major suburban real estate project Bydlení Úvaly on a slow burn for the last ten years, building up around 160 units in small phases. The pace is set to pick up dramatically, however, in conjunction with the construction of the Úvaly bypass, a road designed to relieve pressure on the congested regional highway to Český Brod. It will also improve access to Prague for local residents, though commuters can already reach Masarykovo station in 25 minutes by train.
Arcona sold the land for this new road to the state highway authority, bringing in some needed cash. The road’s completion is planned for 2027. That’s roughly the same time that construction of a new regional school for 1,200 students should be completed (also on land provided by Arcona).
This is extremely positive for Bydlení Úvaly, and for the town itself. The lack of such schools and other pieces of social infrastructure become critical as large numbers of residents move into major new suburban residential projects. Too often, children end up joining their parents‘ commute to Prague, putting excessive pressure on Prague’s Road network and school system.
Over the past ten years, the investor Arcona represents was never comfortable with building more than about 40 units per phase. But as Arcona director Guy Barker explains, everything they put on the market always sold out, something that’s gradually generated real confidence in the location. Just over 40 new apartments are currently under construction, but there will be 230 built during this latest phase. “There appears to be inexhaustible demand,” says Barker. He describes how aspiring homeowners in Prague are seeing prices spiral out of reach thanks to the problems getting permits there and the high cost of land. These problems “are pushing people out to places like Úvaly where it is affordable.”
“When we first started building, we were selling at CZK 37,000 per sqm. Now it’s in the region of CZK 100,000 to CZK 105,000 per sqm,” he says. “That sounds high, even to me. But look at what people are trying to sell for around Prague in other locations like Radotin with its cement factory. There’s a project there selling for CZK 140,000 per sqm. I wouldn’t have said Radotin is a significantly better location that Uvaly.”
“Úvaly still looks like pretty good value,” says Barker. “You can buy a 3+kk flat for CZK 8 million here, where you’d pay CZK 11 million to 12 million for it in Prague.” The fund Arcona represents bought the land nearly two decades ago, shortly before the onset of the Great Financial Crisis. Fortunately for the investor, the acquisition did not involve any debt. As a result, it decided to hold on to the land and took a cautious approach to its gradual development — wating until the time was right to move more quickly.
Apparently, that time has come.
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