Between 2021 and 2024, Pražská developerská společnost has driven up the value of the 757,000 sqm of land holdings it controls for the City of Prague from CZK 2.99 billion to CZK 8.84 billion in 2024. It’s managed to do this basically the way any other developer: by changing the planning on its land to enable development to be carried out. Knight Frank carries out valuations for PDS.
While the value of “its” land has nearly doubled over the past four years, it’s an almost incalculable increase from 2020, a year before Petr Urbanek was named director of PDS. Urbanek spent that year going through all the land holdings of the City of Prague. Not just to figure out where it might be possible to build affordable housing, but because the city literally didn’t know how much land it owned, or what it was worth.
Even back then, it was clear that a housing crisis was on the way. Because Prague sold off most of its housing stock back in the privatization craze of the 1990’s, it had no way to alleviate the impact of growing income disparity. Even though Prague knew it should be building affordable rental residential buildings, it literally didn’t know where to start.
Back in 2020, I wrote this about Urbanek’s appointment: “For years now, the city has had only the most superficial information of its own land holdings. There’s documentation about the number and size of all of its parcels, of course. But there’s never been a single office or person in charge of analyzing it all and treating it as a single portfolio. Until just recently, the city had no realistic understanding of the value of its holdings and no methodology for assessing it. And with literally thousands of plots and hectares of land involved, there are vast sums of money potentially at risk of being lost, mismanaged or wasted.”
The biggest boosts to PDS’s portfolio value resulted from successful land use planning changes to its holdings in Novy Dvory and Palmovka. For a developer whose current goals call for the construction of up to 8,000 housing units, this increase in value isn’t just an accounting trick.
“Market valuation is an essential foundation for addressing the financing of municipal rental housing projects,” said Petr Hlaváček, Deputy Mayor of Prague for Urban Development. PDS was set up at the initiative of Deputy Mayor Hlaváček.
Urbánek added that regular market valuations showing the current value of municipal land, “aids in changing the perception of the value of public real estate assets and serves as the foundation for the city’s strategic decision-making regarding upcoming investment projects and optimal financing structures.”
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