Karlín: Riverside rejuvenation

Thanks to the efforts of both the city and a consortium known as Investors for Prague 8, Karlín emerged from the floods of 2002 with an infrastructure strong enough to support a rebirth of office development. Now a boom of residential space is beginning to follow naturally in that wake.

Danube house
Photo: Jan Vágner

THE TOTAL STOCK of office space in Karlín is over 145,000 m2, and projects currently in the works should bring that number to 650,000 m2 over the next several years.
The roster of major international companies that have located in Karlín include firms such as Astra Zeneca, Aliatel, Panasonic, and Ericsson. These early-comers are spread among now well known buildings like the Zirkon and Rubin Office Centers, Palác Karlín and Corso Karlín. Other recent arrivals include Fiat CR, in Danube House, the first building of the ongoing River City Prague by developer Europolis Invest, and KPMG, who occupy the majority of Florenc Office Center.
Unlike before the floods, it’s not only offices that are seizing the development landscape. A significant increase in the proportion of residential development is already visible. The largest of these is River Diamond by Serge Borenstein, Tom Samii and Partners, which is now beginning construction on a large stretch of land across from Štvanice Island. The 230- flat building, designed by Safer, Hájek and Associates, skimps on little – even enlisting local design star Barbora Škorpilová to handle the interiors. According to Milorad Miskovič Miško, head marketer for the developer, undertakings of this scale are just the beginning. “There are approximately 1 million m2 in both commercial and residential sectors in the pipeline for the next several years,” notes Miško.

 River Diamond

Residential developer TeMD Group, known for its previous projects in other districts, is currently building its first in Karlín, inland on Křižíkova street. Domino House, as it’s called, is a 60-flat complex that is virtually all-new except for a 19th-century wheel factory facade it uses as a cornerpiece. The CZK 250 million project, aimed at the upper-mid segment, includes a fitness center and supermarket. “The main reason we were attracted to Karlín is the rapid development through a very well organized group of investors and local authorities open to new ideas,” says TeMD managing director Mirko Medenica.

Kollárova

Others have voiced a similar sentiment. Muška, a developer known for residential development in Vinohrady, has also chosen Karlín – in fact, the same street – for its next project, a block of smaller “starter” flats. While Karlín’s development in the office, and now residential, sectors is relatively strong, many in the area would like to see retail follow suit. “I give an open invitation to retailers to come to the area,” says Medenica. “Karlín is alive, but a suitable number of small shops and cafés is still missing.”

Highlights of current planned infrastructure changes:

  • Third phase of reconstruction of Pobřežní street will be extended beyond Šaldova intersection (cost: over CZK 1 billion) through to the Libeň docks.
  • Complete overhaul and landscaping of Maniny and lower Libeň riverside: currently industrial land will be made into green space, continuous with the present Kaizl Park.
  • Construction of a tunnel under central Libeň through which part of planned extension of Pobřežní will pass.
  • Better electrical power distribution via construction of a new electrical switching station.
  • Connection of sewage system to a new reservoir to reduce pollution into the Vltava.

Property sales
Karlín has long been a hotbed of development deals. Here are the major transactions conducted in the area since the first in 1998.

- The Mediatel Building: Buyer: Czech Real Property Partners (1998)
- Karlín Administration Centre (Unilever HQ): Buyer: Czech Real Property Partners (1999)
- Zirkon Office Centre: Buyer: Bank-Austria Creditanstalt ImmoTrust (2000)
- Rubin Office Centre: Buyer: Bank-Austria Creditanstalt ImmoTrust (2001)
- Palác Karlín: Buyer: Immorent (2001)
- Corso Karlín: Buyer: Bank-Austria Creditanstalt ImmoTrust (2002)
- Danube House (49%): Buyer: DIFA (2005)

 

BUILDING OF THE MONTH

The Forum, offering reconstructed office and retail space, was recently unveiled at Wenceslas Square 19 by developer and investor Flow East.

Housing 6,000 m2 of office space on five floors above 1,200 m2 of retail space with frontage looking onto the elongated square and Jindřišská, the property was purchased for approximately CZK 350 million, according to Flow East CEO James Woolf. With construction eating up another CZK 250 million, Woolf said the majority of the finance came from the developer, the rest from a “couple of individuals”.
45% of the total available space was leased at the time of opening. The retail units will host Swedish fashion-retailer H&M, who recently opened their first city-center store in Myslbek, and luxury cosmetics brand Sephora’s seventh outlet in the Czech Republic.
Reuters news agency and toy giant Mattel amongst others have taken offices, which rent at EUR 15-17.5 per m2. Leasing agents are Cushman & Wakefield, Healey & Baker and CB Richard Ellis.
The neo-Baroque building, originally commissioned in 1896, took a year to reconstruct according to the design by SH Architects. Beneath are 22 parking places.
Currently surrounded by construction works courtesy of Můstek metro station, the corner-plot should be clear by the summer said Woolf. He adds that Flow East hopes to see the metro entrance moved further from the main doors of the building.

 


Photo: archive

10 questions Jean-Francois Ott (40),
President & CEO, Orco Property Group

What was your first job?
A trader on future options.
How did you decide to make the move to the real estate sector?
Probably because I wanted to buy my own building.
Did you ever imagine 15 years ago that you would be doing business in Prague?
Not then, but after my first stay in Prague, yes.
What do you like the most in the real estate business?
You can either create a new building or renovate a historic place.
What do you despise in the real estate business?
Indecision, deals that take time, guys who take too long to decide.
Which is the best real estate deal you ever made in Prague?
All of them, as each deal is a new story.
Which is the worst deal you ever made in Prague?
All the good deals that I’ve missed!
Which is your next biggest real estate project?
Luxembourg Plaza.
What do you think will be the next place/area/ segment to develop in Prague?
The Benice area, and the upper-to-middle class residential segment.
What do you think most people don’t know about you?
That I’m a musician who performs at least once a month at Rhapsody, and that I would have liked to have been an artist

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