UBM Development has begun construction on the first phase of its project Arcus City in Prague 5 – Stodůlky neighborhood having sold 60 of its 100 flats. At the same time, it opened a sales center at the location to address potential customers for the remaining units. And then there’s the second phase of the project to consider, whose sales are set to begin in early 2022. Lexxus Norton is in charge of sales for the project, which offers 280 flats in total along with 10 family homes. Arcus City is set in a developed suburban environment where all the basic civic amenities and services are already in place as well as outdoor parks and relaxation zones.
It’s just one of several residential projects UBM is working on in Prague, and director Josef Wiedermann admits that finding new projects in the sector is his top priority. One of the next schemes in the pipeline is the second phase of Astrid Garden in Prague 7 – Holešovice, whose first phase Astrid Offices is now leased up. Astrid Residences illustrates how the market has begun shifting away from exclusively individual sales. Wiedermann says that when planning on the apartment building began, UBM expected to sell the 138 units over a period of months to dozens of clients.
Instead, what became clear was that the long-awaited arrival of investment funds on the scene has arrived. Interest from institutional buyers has been building for roughly three years now, but it wasn’t until last year that serious negotiations and bids for entire phases became normal in Prague. “We were surprised how many foreign funds are on the market looking for residential projects,” says Wiedermann. “I knew these funds from my past activity in shopping center business and logistics, but they are now active here in the residential sector. We got several really good offers which are being assessed.” This marks a new phase for Prague’s residential sector that brings with it substantial advantages, including efficiency. “You have one customer, not 138,” points out Wiedermann.
He says the pandemic has clarified what clients want from their living space: more rooms (to accommodate full or part-time working from home) and access to the outdoors, be it on balconies or small gardens. He says though UBM has already shifted to considering potential demand from multifamily investors when looking for new projects. These days, Holešovice is seen as part of Prague’s extended center, but UBM is open to locations across the city that could have broad appeal. Wiedermann anticipates that sale prices will continue to rise thanks to continuing demand and that for the time being at least, this will help offset rising construction costs.
The Austrian-based developer expects to complete sales of its Prague 5 – Smíchov scheme Neugraf, a JV with Crestyl, by the end of 2022.
Also in ThePrime