PSN has managed to slightly increase the number of apartments sold in 2022 despite the complicated market situation. In 2021, the number was 294, while last year it rose to 302 units. The company also did well in the field of rentals, where it concluded or extended 814 new contracts, a similar number to the previous year. The total value of the deals made in 2022 thus reached almost CZK 1.75 billion. The good sales are due, among other things, to the company’s diverse portfolio, which includes both renovations and new buildings, classic and luxury projects, more intimate as well as large-scale. The company continues to fulfil its plan to bring 3,000 apartments to the market within five years, in which it plans to invest up to CZK 11 billion. This year, in addition to smaller projects in Prague 4 or 5, PSN is also preparing to launch some major revitalizations – namely the reconstruction of the former City Telephone Exchange on the border of Vinohrady and Žižkov and the transformation of the Koh-i-noor complex in Vršovice. It is also working intensively on the preparation of the redevelopment of the Innogy complex in Brno and, together with Penta, on the construction of a project on the site of the former Transgas building on Vinohradská Street. And it is actively looking for new acquisitions.
The real estate market went through huge fluctuations in 2022. After a period of the coronavirus pandemic, in which apartments were still being sold and property prices were rising significantly, the geopolitical situation affected everything last year. Even with the war in Ukraine, building materials became more expensive and energy prices escalated. In addition, inflation began to rise significantly and the CNB’s intervention increased interest rates, which, given the unavailability of mortgages, led to a drop in demand and property sales. “I am really pleased that PSN, as a purely Czech family-owned company, has managed to respond flexibly to the truly turbulent year 2022 and to adapt quickly to the market requirements and individual needs of interested parties. Thanks to this, we can also evaluate the past year as a success in terms of sales,” summarizes PSN CEO Max Skala and adds: “This year, we want to continue to focus fully on meeting our goal of bringing 3,000 apartments to the market within five years. And even though we have bought some really large mixed-use developments in recent years, which we are now working hard to develop, our appetite has not left us. Thanks to our own capital and strong position, we are able to face any crisis responsibly and thus want to expand our portfolio even further with new properties with potential.”
PSN has not been significantly affected by the stagnation in apartment sales
Marek Padevět, PSN’s residential projects director, says of the real estate market last year: “In the first half of the year, apartments sold very well. Then the market caught up with the economic situation, which led to a cooling of demand. Many people are now finding it difficult to get a mortgage and pay the high interest or meet the conditions for a loan. For this reason, they are waiting for lower rates, postponing the purchase of a home and moving into rental housing for the time being. We have also seen a drop in demand, but on the other hand we have put attractive projects up for sale or pre-sale that have found their clients. A group of more affluent clients returned to investing in real estate at the end of 2022, but with a more careful selection of the property to be purchased and with a check of the developer in terms of its stability on the market. Therefore, despite the difficult market situation, we were successful, selling more units than in 2021 and still with an all-time record turnover.”
And as interest in buying apartments for investment, which owners then go on to rent out, continues, PSN has stepped up its services for investors. “We now provide a full rental-related service for buyers. We find a solid tenant, take care of all communication, legal matters and property management. The owner has everything without worries and an assured return,” Marek Padevet calculates the advantages.
PSN currently has 11 projects under construction. One of them is the conversion of the former Microna factory in Modřany, Prague, into the Vanguard project. The building with a reinforced concrete skeleton and superior strength is being converted into 150 luxury lofts ranging from 41 sqm to penthouses with an area of 626 sqm. The owners are already taking the first of these in shell & core configuration. The future residents will have varied leisure facilities such as a roof terrace or a spa & wellness area with an 18-metre pool, and of course a 24-hour reception with concierge service. A unique feature on the Czech market is the car lift in the middle of the building, which will allow parking a luxury car right next to the apartment. PSN plans to add two more lofts to the two already presented model lofts by designer Ivanka Kowalski and studio OOOOX in cooperation with studio Skull, which is already being finalized, and architect Michaela Záhorovská. In addition, PSN is planning a modern new building with 94 apartments suitable for families, singles and couples in the neighbourhood of the stylish Vanguard project. These units also lend themselves to purchase for investment.
This summer, the company expects to complete the BackYard Dejvice project in Prague 6.
The house from the 1930s with 5 above-ground and 1 underground floor in Studentská Street is being transformed into 40 small-size units 1+kk and 2+kk. The project is named after the newly built shared courtyard in the courtyard full of greenery, which will serve for relaxation and meeting of the new owners.
Co-approval is also planned for the intimate project Bydlení Na Výšinách on Letná, in the 4th quarter of this year. The reconstruction of the Art Nouveau house will bring 18 new units with a layout of 1 + kk to 3 + kk in a modern design, but which are also characterized by period-style elements, such as wooden parquet floors or replicas of the original windows with insulating glass.
PSN also offers several smaller projects in Prague’s tenement buildings, such as the Hanusova and Sinkulova Housing in Prague 4, the Na Petynce Housing in Prague 6 and the U Pekáren Housing in Hostivař. In Prague’s Chodov district, it bought a part of the Top Hotel, which it is renovating into 227 small-size units suitable for investment.
PSN is waiting for the revitalisation of large brownfield sites
At the same time, PSN continues to expand its portfolio and is currently preparing major redevelopments of original brownfield sites.
It is currently working on the conversion of the Koh-i-noor site into a mixed-use project, which will provide approximately 580 apartments and approximately 4,000 sqm of commercial space. A number of shops and services, such as grocery stores, bakeries, cafes, restaurants, pharmacies, doctors’ offices, will be located in a large area throughout the complex, thus expanding the amenities not only for new residents but also for existing residents. “The area between Vršovická, Moskevská, Kavkazská and Altajská Streets will be open and passable to the public. This area is one of the busiest thoroughfares in Vršovice, and we want to bring it back to life, given its importance,” says PSN Development Director Štěpán Smrčka, adding, “The first step of the project will be a partial demolition, for which we already have a building permit, followed by the subsequent rehabilitation of the area and renovation of the historic part. We will preserve and renovate the original buildings and reconstruct the listed buildings. The main one is the Waldes building, the so-called mechanical building, facing Vršovická Street, and the historically valuable building facing Kavkazská Street. Once we have all the necessary permits, we will start construction.”
PSN is also planning the reconstruction of the former City Telephone Exchange on the border of Vinohrady and Žižkov. The monumental building, which occupies half of the city block and was built in 1921-26 in the Czech Art Deco style according to a design by Bohumír Kozák, will house about 120 apartments. All of them are planned for rental housing. PSN expects to obtain a zoning permit and then a building permit this year. As in the case of the Koh-i-noor revitalisation, the renowned Jakub Cigler studio is behind the architectural design.
The project in Vinohradská Street on the site of the former Transgas building is also in the preparation phase. In cooperation with Penta Real Estate, PSN will build a multifunctional project with flats and offices according to the design by Jakub Cigler architects.
Outside of Prague, the company will focus on the transformation of the Innogy site in Brno. This will take place in stages over several years, given the size of the brownfield site of approximately 45,000 m2. The company plans to incorporate both apartments and commercial space for shops and services into the site. “Between the Cejl and Křenová sites near the centre of Brno there is a long-unused potential. We are in intensive negotiations with the city about our vision for its revival. We want to preserve some of the existing buildings in the area and supplement them with the missing functions of housing and commerce. Until we start renovation and construction, we are renting out individual buildings and gradually bringing the space back to life,” says Petr Pospíšil, director of PSN’s Brno branch.
