The wealthy middle class of Prague is intrigued by well-designed, composedly Nordic and efficient houses. Prague is one of YIT’s most promising targets in Eastern Europe.
"Prague has a basic need for good, modern homes. YIT has introduced higher levels of quality and service in housing." These are the words of Tom Sandvik, head of the Baltic and Central Eastern Europe division.
There are excellent plots with already established good traffic connections on the market. YIT started its operations in Prague in 2008 by purchasing a local real estate development consulting firm. The banking crisis slowed down the initial business, but after two years, the company was already operating as planned.
The growth has been steady and the real estate portfolio looks good. YIT has reached a solid position as a developer. It is one of the main operators in the new real estate market of Prague. YIT has sold about 700 apartments in Prague, and about 400 apartments are under construction.
New apartment buildings and lofts raise interest
Most Prague citizens live in prefabricated houses built during the era of socialism. Some of the houses have been renovated, whereas some are beyond repair and demolition is the only option. Problems in old houses include poor energy efficiency and dated building systems.
"A well designed, new, and functional basic home in an apartment building is a preferred form of housing. In the current trend, people want more spacious housing arrangements. That is quite challenging for the designer as the old building regulations do not favour those types of constructions. The regulations and standards follow the needs of the consumers and are in need of a quick update", says Sandvik.
Throughout history, Prague has seen production facilities such as factories, engineering workshops and breweries built in the middle of the city. Some of the old industrial facilities are an important part of the city’s cultural heritage. Old factories can also be renovated and developed into apartments or offices. By making the planning of these areas more efficient, additional apartments can be built next to the old industrial properties. Such development projects can produce interesting new forms and opportunities of housing.
Local design in a Nordic style
YIT’s target group in Prague is the wealthy middle class who wish to live in “comfort” and “business” class apartments.
"The rapid growth of the economy has increased consumption. Apartments are purchased as homes and as investments. An efficient one-bedroom flat of 50–55 square metres is the most desired option. On the other hand, the most expensive penthouse and loft apartments are the fastest sellers. The young are particularly interested in them", says Vladimir Dvořák, President and CEO of YIT Stavo.
Local architects are used in the design process. They are advised to seek a Nordic style: clear, flexible and efficient apartments with a competitive price. However, the target should still be attractive and have a balcony or a terrace. If a balcony cannot be built for some reason, this is reflected in the desirability and, therefore, in the price of the apartment.
"Finland has a good reputation in the Czech Republic. The values of a Finnish construction company are trustworthy and span the entire operations. The apartments are slightly more expensive, but not unobtainable for consumers. These are some of the aspects we like to emphasise in marketing. I believe they help us stand out among the competition", says Dvořák.
Central and Eastern Europe on the rise
The Czech Republic and the CEE countries as a whole are a very promising target for YIT. The economy of the Czech Republic is in a good shape, and the expectations of financial growth are high. However, construction is slowed down by the dated bureaucracy.
"The most challenging aspect of the operational environment is the unpredictable licensing process. All the developers in the country suffer from it. It hinders housing production, raises the prices, and influences the employment rate. Especially the start of the work is usually delayed because of it", says Sandvik.
The substantial plot acquisitions during the previous year support YIT’s strategy of increasing the significance of the CEE countries.
"For YIT, Prague is an extremely interesting opportunity for growth. It has a high standard of living and the need to improve the quality of housing. It is a developing city", summarises Tom Sandvik.
For more information, contact Tom Sandvik, head of the Baltic countries and Central Eastern Europe division, tel. +358 (0)400 617 807, email@example.com
YIT targets in Prague
A target of four apartment buildings in the fifth district of Prague with 134 apartments. All the apartments will have a balcony, terrace or a front yard.
A six-house entity in the fourth district of Prague. A total of 232 apartments with a balcony or a terrace. Low-energy building.
A closed-off yard entity of four houses in the fourth district of Prague. The apartments in the first floor have their own balconies. A total of 107 apartments in the target.
The target, situated in the tenth district of Prague, consists of 38 apartments. The apartments in the lower floor have their own gardens and garages. The other apartments have large balconies or large terraces. Low-energy building.
In the spring of 2015, YIT acquired a plot in the fifth district of Prague, and will start the construction of an apartment building at the plot. There will be about 100 apartments in the seven-storey apartment building. The target will also feature loft apartments and two-storey apartments. The target will be completed in the spring of 2017.
Rokytka area development project
In 2015, YIT acquired a lush nine-hectare plot for an area development project in the ninth district of Prague. The plot will have nearly 900 apartments with a total living area of about 57,000 square metres. The project will be carried out in several phases during nearly a decade. Rokytka is one of the upcoming areas in Prague. "Rokytka is a message to the market; YIT aims at becoming the largest area developer in Prague and realises its promise of creating better living environments in practice. It is an ambitious project to built a small, functional city, the “YIT CITY”, says Vladimir Dvořák, President and CEO of YIT Stavo.
The most European city in Europe
- Prague was established around Prague Castle at the end of the 9th century. By the 14th century, it had already become a flourishing city. That is when the New Town and the Charles Bridge were built and the Charles University was founded. There were about 40,000 residents.
- In 1918, the state of Czechoslovakia declared its independence from the Austro-Hungarian Empire.
- Prague has always been an arena of political events: in 1948, a coup d’état turned the country into a communist state. In 1968, the Prague Spring had a brutal ending, but the Velvet Revolution of 1989 marked the end of the socialist era. After the peaceful dissolution into the Czech Republic and Slovakia, Prague became the capital city of the Czech Republic.
- Despite the wars and occupations, the city had been spared from serious damage. The historical Old Town of the city, Staré Město, is a UNESCO World Heritage Site. The city has currently about 1.3 million residents, whereas the population of the country is about 10.6 million people.