Despite the difficult situation in the real estate market, PSN evaluates the past year above expectations. It has managed to sell more than 200 properties and has concluded or renewed almost 630 new leases. The total value of the deals made in 2023 thus exceeded CZK 1.5 billion. PSN also significantly expanded its portfolio with 23 new acquisitions worth more than CZK 1.3 billion. Most of them consisted of investments of approximately CZK 1.1 billion in apartment buildings in Prague, Brno and Pardubice. The developer is looking for further opportunities and plans to invest over a billion in new acquisitions again this year.
The overall economic situation in the company, coupled with current events in Europe, including the war in Ukraine, expensive energy prices and high interest rates, has had the biggest impact on the real estate market. “The forecasts were certainly not ideal, but it turned out that it did not weaken the market significantly. It is a fact that due to high interest rates, the segment of clients buying property through mortgage loans has relatively disappeared. They postponed their demand, which resulted in lower apartment sales. On the other hand, however, the appetite of investors has grown again. They were buying in larger volumes, especially smaller units with layouts of 1 + kk and 2 + kk, because real estate still represents a stable and safe appreciation of money and high rents bring them an interesting return. And we are a partner for investors who can renovate and prepare the whole house for rental housing,” Max Skala, managing director of PSN, summarizes the overall situation and adds, “In general, clients were very interested in new buildings and renovated apartments. However, in our apartment buildings, we also registered interest in units before renovation. In such cases, we take care of the reconstruction of the building (façade, common areas, staircases, elevator, wiring, courtyard, etc.) and then the interiors of the flats are adapted and furnished completely to their liking.”
The return of mortgages
In the coming period, the company predicts a recovery and slight growth of the market, which started to be evident in the first quarter of this year. Banks reacted promptly to the CNB and lowered their interest rates, which are currently below 6% on average. Thus, developers are gradually seeing the return of clients who buy with the use of a mortgage loan and do not postpone their demand any longer. This decline in interest rates is expected to continue gradually, and will continue to increase demand. According to PSN, prices will depend on property type and location. However, in general, given the higher demand for apartments and the shortage of apartments due to the decline in construction volume, property prices could increase.
PSN wants to keep buying
PSN has been very active in the field of project preparation and new acquisitions in 2023, with 23 purchase agreements for more than CZK 1.3 billion, including 15 for apartment buildings.
“After a very successful period, our appetite is definitely not leaving us,” says PSN’s Acquisitions Director Pavel Citta, outlining the company’s future plans. Of course, we are actively looking for other interesting acquisitions. This year we want to invest over a billion in real estate in Prague, Brno and Pardubice again.”
Rental housing still on the wave of interest
The rental housing market continued to grow in terms of prices and demand. “We have had successful months in the residential segment. We managed to rent out all the apartments basically immediately and at higher prices. The interest in renting increased also due to the unfavourable situation in the mortgage market. We also maintained very high occupancy rates in commercial space despite slightly rising rental prices,” says Helena Hyánková, Deputy Director of Commercial Projects at PSN, adding: “We want to continue to focus intensively on the rental housing segment, as we feel there is great potential here. For example, we have a project under construction in Seifertova Street, where more than 60 flats with a layout of 1 + kk to 3 + kk are being built in three reconstructed buildings exclusively for rent.”
Under the PSN banner: new buildings, reconstructions and large-scale developments
Last year, PSN began to fulfil its vision for the revitalisation of large urban areas. It is working intensively on the first preparatory phase of the transformation of the Brno Plynárenská site into the Brno One project. The construction of new apartments and commercial units in several stages will complement the overall revitalisation of the site, which is to be transformed into a modern and vibrant neighbourhood. It is also preparing the transformation of the Koh-i-noor complex in Prague’s Vršovice or, together with Penta, the realisation of a project on the land in Vinohradská Street below the Czech Radio.
At the beginning of this year, PSN launched a large-scale and sensitive reconstruction of the First Republic Grand Palace in the centre of Pardubice by the renowned Czech architect Josef Gočár. The renovation design by the prestigious OVA studio is intended to restore the lustre of the functionalist building while modernising it along the lines of foreign department stores. PSN plans to put the centre into operation in the autumn of 2025. The company is also building a 269-space parking building nearby. That should be ready this fall.
The 150-loft Vanguard project, which is being built by converting the former Microna factory in Prague’s Modřany district, should be completed soon. Last year, PSN opened two new model lofts designed by renowned designers – SKULL studio and architect duo Michaela Záhorovská and Simona Belicová. Different types of furnished lofts show different styles for different target groups, the last one also focuses on premium housing for families.
In close proximity to this luxurious authentic loft housing, the company started construction of the Ahoj Vanguard project in 2023, which offers 94 apartments ranging in size from 1-bedroom to 4-bedroom and from 22 to 120 sqm in a playful and modern concept. Of course, there is a large amount of greenery and plenty of parking spaces. The project is already under construction and is expected to be approved in August this year. “Both projects are selling very quickly, given their qualities, which include a well-thought-out concept, quality materials, top-quality facilities and a pleasant location,” says Jaroslav Macháč, PSN’s residential projects director.
The next project launched is the new building Rezidence Maroldka in Prague-Nusle, where 38 units will be built, ranging from 1 + kk to 3 + kk and sizes from 27 to 74 m2, as well as 4 commercial spaces. Future residents can enjoy, for example, a common roof terrace. Completion is expected in the second half of 2025.
