Cresco director Jan Krnáč is in a better position than most developers to judge the residential markets of the Czech and Slovak capital cities. “It’s picked up faster in Prague than in Bratislava,” he says. “We see the market much more positively in the Czech Republic than here.” He admits that political uncertainty with 23% VAT rate in Slovakia has impacted the recovery, particularly in the investment and luxury segments, as some investors choose “to look for opportunities in other countries of Europe.”
But with a huge landbank and numerous mid-market projects underway, Krnáč isn’t just waiting around for the market to come back. To help push Bratislava sales, Cresco has invented a sort of hybrid financing structure called “hyponajem” (literally, mortgage-rent) that allows potential buyers to live in their future homes while waiting for market conditions to improve. The program, launched in response to high interest rates following COVID-19, offers residents a two-year rental period with an option to purchase.
“You rent the apartment for two years,” Krnáč explains. “You pay a rent whose level is derived from, say, an 80% mortgage calculated on a 30-year basis.” For some, this will work out to €500 to €600. At the end of the two years, residents can either exercise their purchase option or walk away. The motivation for some clients is that interest rates will fall by the time they have to exercise their option. Krnáč sees it as a way of making it easier for clients to commit.
“We strongly believe that once people have moved in, they don’t want to move out. So they will do everything that’s in their capabilities to stay in the apartment and buy it,” Krnáč notes. The strategy has already led to arrangements with around 70 units.
At the end of last year, Cresco rolled out a new program in cooperation with VÚB bank and Intesa to offer a 3-year, 2.39% mortgage. Unlike its competitors, Cresco pays the difference in the rate directly to the bank, rather than to the client. This has a positive impact on how the bank views the client’s bonity, ultimately enabling them to buy a larger property. The bet is that salaries and real income will continue to rise over the period of the 3-year fix. “We wanted to think up something we could offer that would really make a difference,” says Krnáč.
In Prague’s Holešovice district, Cresco’s Soho project is advancing rapidly. Cresco launched construction of the second phase last September and has already sold 60 units. General contractor Hochtief should complete the work within two years.
But while Cresco is still working to expand his range of Prague projects, Cresco’s development pipeline in Bratislava stretches out 15-20 years. At the ongoing Slnečnice project in Petržalka, work on the landmark Nad Mestom phase is now underway.
These two residential towers, comprising 230 units, will offer panoramic views northward to Bratislava Castle. Slnečnice already houses 4,000 residents, with recent completions including three affordable living blocks that still have about 15% of units available.
Sales of another section of the scheme called Nové Viladomy should begin early this year, with construction schedule for October 2025. Additional Bratislava projects include Lakeside 3, a joint venture with Wood & Company featuring two towers next to Kuchajda Lake, currently in the permitting process.
On the Danube River, Cresco is working with Bogle Architects on a development spread across two land parcels (one owned by J&T, one by Cresco), with an urban permit secured and building permit expected next year. Sales are projected to start later in 2025.
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