UBM Development Czechia has sold an apartment building in the Timber Praha residential project to the real estate investment fund Future X1. Building M in the Timber Praha project, representing the first multi-storey apartment buildings made of wood in the capital city, comprises 15 apartments with a layout of 1 + kk to 4 + kk and sizes from 39 m2 to 110 m2 on almost 1,000 m2. The real estate investment fund plans to initially rent out the units, but in the long term it plans to sell its entire portfolio to a large foreign investor. Future X1 has been cooperating with UBM for two years and in that time has bought 16 apartments in the Arcus City residential complex, nine apartments in the Astrid Garden project in Prague’s Holešovice district and four units in the Neugraf complex in Prague’s Smíchov district.
“Originally, we assumed that all apartments in the Timber Praha project would be sold into private ownership. We are pleased that our first timber apartment buildings in the Czech Republic quickly attracted the interest of institutional investors. We found an agreement with Future X1 in a very short period of time, given our previous negotiations and mutual trust,” says Thomas G. Winkler, CEO of UBM Development AG.
“We have bought several apartments from UBM in the past in various projects (e.g. Astrid Garden or Arcus City), but they are too large for us to acquire as a whole. Now this is the first time we have opted for a whole house in one transaction. Building M in the Timber Praha project has the optimal size for us and it was logical for us to do so, also taking into account the synergies that are created by owning all the units at one address,” says Ondřej Záruba, Managing Director and Investment Manager of the Future X1 Fund.
Thomas G. Winkler comments on the realisation of Timber Praha and the sales strategy. For us as a developer, reducing the carbon footprint during the construction and operation of buildings is a very important parameter. And this can only be achieved if the project works economically. In addition to being constructed of wood, Timber Praha is also highly energy-efficient thanks to the use of geothermal energy, heat pumps or photovoltaics. In 90% of our markets, i.e. Germany and Austria, the most common question for institutional investors is whether projects will retain their value in 10 years’ time. And in the case of timber buildings, which represent a completely new way of building and thinking, they make their purchasing decisions very quickly. Today, it is the balance between economic and environmental considerations that plays a significant role for investors.”
Ondřej Záruba also confirms this: “Timber Praha works thanks to the incorporation of green technologies and will actually reduce energy costs for future residents. This is an investment that makes sense for us. We want to promote a philosophy that is green not only because of the marketing label, but also from an economic point of view. In terms of future prospects, the importance of ESG scores, for example, will certainly grow. So, of course, in the next five to ten years we expect to be asked about the share of wood buildings in our portfolio.”
The Future X1 real estate fund acquired the Timber Prague apartment building in line with its vision to create a portfolio of at least 100 to 200 apartments in Prague. “When we reach such a portfolio, we would like to negotiate with a large German or Swiss real estate fund and sell everything to them as a whole,” says the managing director of Future X1. Until then, he says, the fund will rent out the units in building M in Timber Praha. Our experience with other UBM projects shows that there is a huge demand for quality housing in Prague. This is especially true now, when it is quite difficult to afford to buy an apartment of your own, as prices are too high for most of those asking. Moreover, there are many people in Prague who are aware of the uniqueness of the Timber Praha project.”
Timber Praha is being built as part of the Arcus City residential complex in the Prague-Reporyje district. A total of 62 apartments with a layout of 1 bedroom to 4 bedrooms are being built in modern houses made of solid CLT panels. Energy-saving features include exterior blinds, ground-water heat pumps and geothermal boreholes. Photovoltaic panels will be installed on the green roofs. All apartments will have underfloor heating, which will also be used for cooling in summer. The smart home system will be used for video phone control, heating and cooling control or energy metering etc. Timber Praha is being built with BREEAM Excellent environmental certification and energy certificate in the most economical category A. Construction is scheduled for completion in Q4 2024.
