SHD Real Estate has begun construction on Rezidence Klíčov, a 54-unit project in Vysočany – Prague 9. The developer also launched sales of the flats, which are divided between three multi-storey buildings. Most will be 2-bedroom flats, in line with the primary target group of singles, young couples and small families. Work is expected to complete by the end of 2025.
SHD director Roger Dunlop says the site originally had some old garages on it and required a change of planning. The resulting project will offer each customer an underground parking spot as well as larger than average storage units for those who move quickly. He says the decision to target smaller units was a recognition of market realities. “It’s about affordability issues,” he says. “We’ve always aimed to be at the lower end of the middle market, rather than trying to sell large, expensive units.”
Kličov is well-connected, with a metro station, trams and buses all within 5 minutes. “In that respect it makes it very much more accessible and easy to live in,” says Dunlop. “It’s also a potential rental location.” Up to a dozen flats could potentially be acquired by a rental organization and offered to long-term tenants.
An early deal of this kind would prove useful when it comes to financing, but Dunlop insists financing isn’t an issue. “We need some presales like everybody, but we have the cash to finish it. This isn’t a situation where we need financing. Our investors have said ‘we’re going’ and if it means we’re writing checks the whole way through, then that’s what we’ll do.”
The majority of flats will cost between CZK 8 million and CZK 11 million, with ground level units offering an outdoor garden. The exception to the middle-market target group will be the three units that top each of the three buildings as they will offer 120 sqm for roughly CZK 18 million. As the plot is set on a hillside at the intersection of Nad Klíčovem and Pod Krocínkou, they will provide panoramic views of the city from within green surroundings.
Dunlop also says he’s under no illusions about the market, even if interest rates do look to be slowly receding. “I think buyers are looking for a deal,” he says. “I think any developer has to be aware of that, so for the time being, we’re here to trade – and we will do deals. These are asking prices as opposed to bottom line prices. The market will be better in 2024, but we have to be realistic.” For the time being, Dunlop anticipates sales to progress at a rate of a couple per month. “We’ll still have something to sell by the middle of next year but if you approach it on that basis then it makes sense. If your business plan is based on selling at a much fast rate then I think you’ll have a challenge.”
It could also prove an advantage when it comes to pricing. Already, very little new product is coming to the market, and new housing construction starts have cratered. So SHD’s timing could well prove to be fortuitous. “There’s not a lot coming through at the moment,” says Dunlop. “I think we’re in a lull before the next storm, in terms of supply.”
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