Czech government holds off on setting Euro adoption date

The Czech government has decided not to set a target date for adopting the euro, following a joint recommendation from the Ministry of Finance and the Czech National Bank (CNB). The decision comes despite the country meeting three out of five criteria required for euro adoption in the past year.

According to an official report assessing the Czech Republic’s readiness to join the euro area, the country met the public finance deficit, debt level, and interest rate requirements in 2024. However, it did not meet the inflation criterion or the condition of participating in the ERM II exchange rate mechanism, a key step in the euro accession process.

Finance Minister Zbyněk Stanjura acknowledged the positive development in public finances, suggesting that discussions about euro adoption can now begin. He emphasized, however, that public opinion remains a significant factor. “There are no clear economic arguments either for or against the euro. Experience from other countries shows that public support is crucial. With only a quarter of Czechs currently in favor, I see no reason to move forward until support rises to at least 50 percent,” he said.

The report noted that average inflation in the Czech Republic fell to 2.4 percent last year, down from 10.7 percent the previous year. Although this aligns with the CNB’s target of 2 percent, the inflation criterion for euro adoption—set at no more than 1.5 percentage points above the average of the three lowest-inflation eurozone countries—was not met due to varying inflation levels across the EU.

The Finance Ministry expects the Czech Republic to meet the inflation criterion this year, which would leave participation in ERM II as the only remaining hurdle. The country has not yet entered the mechanism, and the government plans to do so only when a concrete euro adoption timeline is established. Experts suggest the Czech Republic should aim to stay in ERM II for the minimum required two-year period.

The analysis accompanying the report also evaluated the Czech Republic’s alignment with the eurozone. It highlighted strong trade and financial links, noting that the Czech koruna often moves in line with the euro. However, differences remain, particularly in economic structure. The Czech economy continues to rely heavily on industry and maintains a wage gap compared to eurozone averages, indicating that full convergence is not yet achieved.

The Czech Republic committed to adopting the euro when it joined the EU in 2004, but no deadline was set. Of the ten countries that joined the EU that year, seven have since adopted the euro. Poland, Hungary, and the Czech Republic remain outside the currency union. Currently, 20 of the EU’s 27 member states use the euro, with Croatia being the most recent to adopt it in 2023.

Source: CTK

Prague 3 approves developer greements for Žižkov redevelopment worth CZK 1.35 billion

Prague 3 councillors have approved agreements with developers to support public infrastructure near the site of the former Žižkov freight station. The agreements, valued at approximately CZK 1.35 billion, include financial contributions, construction of public amenities, and land transfers. The contracts, previously endorsed by the Prague City Council, will now be submitted to the City Assembly along with a proposed change to the local zoning plan.

Developer contributions are based on the gross floor area of planned buildings and are conditional upon the approval of zoning changes. The amendment would enable the construction of housing for up to 20,000 residents. In preparation since 2010, this change would represent one of the most significant adjustments to Prague’s zoning regulations.

Central Group, which is already building in parts of the area not affected by zoning restrictions, will contribute CZK 441 million through the development of a kindergarten, a park, and land transfers. Sekyra Group has agreed to provide CZK 624 million, including CZK 411 million in cash and the remainder as land. Penta will contribute CZK 122.5 million, split between a CZK 30 million financial payment and park development. This applies to the second phase of Penta’s project, with the first phase covered by a separate agreement. Developer MY Park will contribute CZK 10.4 million for a smaller-scale project.

The overall redevelopment plan for the area includes five kindergartens with capacity for 650 children, two primary schools for 1,350 pupils, healthcare facilities, and other public services. The plans also call for new parks and the construction of a tram line, which will begin as a single-track system with the potential for future expansion. Prague 3 Deputy Mayor Pavel Dobeš has proposed converting the former railway station building into a secondary school.

Slovakia’s new transaction tax faces opposition from smallest coalition party

The Slovak government’s newly introduced tax on financial transactions has triggered criticism from business groups, opposition parties, and even one of the ruling coalition members. The Slovak National Party (CIS), the smallest party in the governing coalition, announced it would propose exemptions for sole traders and small businesses with annual turnover up to EUR 100,000.

CIS party leader Andrej Danko told reporters the new measure, which came into force at the start of April, unfairly burdens small entrepreneurs. The tax, part of a broader consolidation package approved last year, is expected to generate around EUR 700 million annually. It imposes a 0.4% levy on most outgoing payments from the bank accounts of businesses and legal entities, capped at EUR 40 per transaction. Additionally, businesses must pay a flat EUR 2 annually for using a business payment card.

While Danko had previously called for the complete abolition of the tax, which led to tensions within the coalition, he has since moderated his stance, citing concerns over the state budget. He criticised the application of the tax to non-cash employee salary payments.

Over the weekend, Danko’s call to scrap the tax was met with resistance from senior coalition figures, including Tibor Gašpar, deputy speaker of the parliament and close ally of Prime Minister Robert Fico. Gašpar labelled the proposal as an act of sabotage. In response, Danko reiterated his commitment to the coalition while advocating for targeted exemptions rather than a full repeal.

Meanwhile, the opposition party Progressive Slovakia has initiated a public petition to cancel the tax, describing it as harmful to businesses.

Public discontent has grown since banks began applying the tax. Entrepreneurs have taken to social media to share account statements showing multiple charges after making routine payments such as supplier invoices. Under the law, banks are responsible for calculating and paying the tax on business accounts. If a business-related payment is made from a private account, the entrepreneur must report and pay the tax independently.

Some business owners have encouraged clients to make payments in cash to avoid the tax, which can then be used for supplier payments without triggering additional charges.

Certain types of payments, such as taxes and mandatory levies, are exempt from the tax. A similar tax structure has previously been implemented in Hungary.

Source: CTK

EU Member States approve trade countermeasures against U.S. tariffs

EU Member States Approve Trade Countermeasures Against U.S. Tariffs

Brussels, 9 April 2025 – The European Commission has secured the necessary backing from EU Member States to implement trade countermeasures in response to the United States’ decision in March to impose tariffs on steel and aluminium imports from the EU.

The Commission views the U.S. tariffs as unjustified and harmful to both economies, as well as to global trade. Despite the retaliatory move, the EU maintains that its preference remains a negotiated solution that is fair and balanced.

With today’s vote, the Commission is now able to proceed with the adoption and publication of the implementing act. Once finalised, the countermeasures will take effect, and duties will begin to be collected starting 15 April.

The EU has indicated that these measures can be suspended if an agreement with the U.S. is reached.

Photo: © Copyright European Union

Construction output sees modest year-on-year growth in February 2025

Construction output in the Czech Republic rose by 0.9% year-on-year in February 2025, according to the Czech Statistical Office (CZSO). However, when compared to January 2025, construction activity declined by 0.6%.

Building construction increased by 0.7% year-on-year, while civil engineering construction rose by 1.3%. The growth rate was influenced by a higher comparison base from February 2024, which contributed to what the CZSO described as overall stagnation in the sector.

The total estimated value of projects for which building permits were issued in February reached CZK 45.6 billion, up 30.2% compared to the same month last year. This increase was partly due to the approval of several large-scale projects exceeding CZK 1 billion. Even when adjusted to exclude these high-value projects, the value of permits still recorded a year-on-year increase of approximately 10%.

The number of housing starts rose significantly, with construction beginning on 2,607 new dwellings—a 40.1% increase compared to February 2024. In contrast, the number of completed dwellings declined sharply, falling by 49.5% year-on-year to 1,683 units.

In broader context, Eurostat reported that construction output in the EU27 rose by 0.2% in January 2025 on a year-on-year basis. Data for February 2025 across the EU is scheduled for release on 23 April.

Czech industrial production rises slightly in February 2025

Industrial production in the Czech Republic increased by 1.5% year-on-year in February 2025, according to data from the Czech Statistical Office (CZSO). Compared to January 2025, production rose by 1.7% in real terms.

The February increase was largely influenced by a low base from the same month in 2024, particularly in the electricity, gas, steam, and air conditioning supply sector, which was affected by weather conditions. Manufacturing output, in contrast, remained flat year-on-year.

Moderate year-on-year growth was recorded in several sectors, including food production, machinery and equipment manufacturing, and electrical equipment manufacturing. Meanwhile, declines were noted in the production of computers, electronic and optical products, as well as in the manufacture of other transport equipment, where ongoing production delays and a higher comparison base from the previous year played a role.

New industrial orders fell by 1.3% year-on-year in February, marking the second consecutive month of decline. Domestic orders dropped by 3.1%, while foreign orders fell by 0.3%. However, on a month-to-month basis, total new orders increased by 3.0%. The automotive industry experienced a moderate drop in orders, while the manufacture of other transport equipment was again affected by a strong comparison base. In contrast, machinery and equipment manufacturing continued to see gains in new orders for the third month in a row.

The average number of employees in the industrial sector decreased by 2.0% year-on-year in February.

According to Eurostat, industrial production across the EU27 fell by 0.2% year-on-year in January 2025. Slovakia and Denmark recorded the largest declines, down 5.1% and 4.4% respectively, while German industrial output fell by 1.8%. Czech industrial production declined by 0.8% in the same period. On the positive side, Ireland and Lithuania reported the strongest growth, increasing by 10.4% and 9.8%, respectively. The EU’s largest drop by activity was seen in the manufacture of leather and related products, while “other manufacturing” recorded the highest growth.

Eurostat is expected to release February 2025 data for the EU on 15 April.

PPF Real Estate to acquire Four Seasons Hotel in Prague from Northwood Investors

PPF Real Estate Holding has signed an agreement with global investment firm Northwood Investors to acquire the Four Seasons Hotel in Prague. The transaction, which remains subject to regulatory approval, marks an expansion of PPF Group’s presence in the hotel sector and supports its strategy to diversify its real estate portfolio across both asset types and regions.

Investor Tomáš Otruba, who has held a minority stake in the hotel since 2023 through his association with the AMALAR Group linked to the Kellner family, will continue to participate in the project. Michal Strnad, owner of the Czechoslovak Group (CSG), is also involved as a minority partner and co-owner, though CSG is not formally part of the transaction.

The Four Seasons Hotel, located in the historic centre of Prague, is considered one of the city’s leading luxury hotels. The property will join PPF Real Estate’s existing hospitality portfolio, which includes the Hilton Prague—the largest hotel in the Czech Republic—and the Stages Hotel near Prague’s O2 Arena.

According to Robert Ševela, Chairman of the Board and CEO of PPF Real Estate Holding, the planned acquisition is part of a broader effort to strengthen and balance the company’s investments. He noted the importance of partnerships aligned with PPF’s long-term approach to property ownership.

No financial or contractual details of the transaction have been disclosed.

Petr Houska joins Crestpoint Capital Partners as Managing Partner

Crestpoint Capital Partners, a real estate investment and advisory firm, has appointed Petr Houska, MRICS, as a new managing partner. Houska brings 15 years of experience in property development and sustainable construction across both commercial and residential sectors. In his new role, he will oversee active asset management, including redevelopment and construction projects.

Crestpoint Capital Partners, founded by Tomáš Jandík, CFA, MRICS, focuses on real estate advisory, investment management, and joint venture structures in the office, retail, and logistics sectors. Based in Prague, the firm operates primarily in the Czech Republic and Poland.

Jandík will continue to lead transactions, asset management, and financing, while Houska will concentrate on project execution and development oversight.

Houska previously served as Project Director at Skanska Commercial Development Czech Republic, where he managed office developments in Prague totalling 150,000 square metres. These included Port7, Parkview, Praga Studios, and Visionary—projects noted for their environmental certifications and energy efficiency standards.

In addition to his development work, Houska has consulted on over 100 real estate projects across office, industrial, hotel, and residential sectors, with a combined investment volume exceeding EUR 2 billion. He is a graduate of the Czech Technical University in Prague, a LEED Accredited Professional, and a member of the Royal Institution of Chartered Surveyors (RICS).

Catella reports stable growth in 2024 despite market uncertainty

Catella AB, a Swedish investment and advisory firm focused on the real estate sector, reported steady performance in 2024, maintaining a positive operating profit and increasing assets under management despite subdued transaction activity across European property markets.

Catella’s total income for the year reached SEK 2.3 billion, with assets under management (AUM) growing from SEK 152 billion at the end of 2023 to SEK 155 billion by year-end. The company operates through three main business areas: Investment Management, Principal Investments, and Corporate Finance.

Investment Management saw continued inflows, especially into residential-focused and sustainability-themed funds. The launch of Catella Investment Management (CIM)—a platform resulting from the merger of Catella Residential Investment Management and Catella Real Estate AG—aimed to streamline fund operations. CIM oversees approximately EUR 10 billion across 25 funds in 15 countries.

Principal Investments recorded SEK 1.6 billion in proprietary investments, including nine ongoing development projects in four European countries. Notable progress included the divestment of the final property in Catella’s partnership with Infrahubs, which contributed approximately SEK 225 million in profit after tax since inception. The business area maintained its focus on projects with strong sustainability credentials, including the completed Kaktus Towers in Copenhagen and the ongoing KöTower redevelopment in Düsseldorf.

Corporate Finance operated in a more cautious market but maintained its advisory role in several significant transactions. In Sweden, Catella was the top-ranked property advisor by completed sales. The business area advised on transactions and capital raisings worth SEK 24.2 billion and improved its operating result from SEK -33 million in 2023 to SEK -17 million in 2024, driven by cost efficiencies.

During the year, Catella also issued new senior unsecured green bonds and launched new investment strategies, including a UK-listed property sector fund and data-driven systematic property fund products.

The company reported an operating profit of SEK 128 million attributable to shareholders. Its share price declined by 17% (Class B) and 21% (Class A) during the year, underperforming the OMX Stockholm GI, which rose by 9%.

Catella continues to focus on expanding its fund offering, diversifying its investment strategies, and strengthening internal collaboration. The company expects improved transaction activity in 2025 as market conditions stabilize.

PSN launches two residential projects in Prague’s Břevnov and Nusle districts

Developer PSN has introduced two new residential projects in Prague, located in the districts of Břevnov and Nusle. The developments, currently under renovation, aim to provide modern living options while also offering potential for investment. Both projects are expected to be completed in the first quarter of 2026.

In Břevnov, the Pod Drinopole project will deliver 27 residential units with layouts ranging from studio (1+kk) to four-room (4+kk) apartments, with floor areas between 30 and 78 square metres. The building is being refurbished to include updated staircases, designer lighting, a new elevator, and modern entrance doors. The top floor will feature apartments with terraces and views of the surrounding area. A landscaped courtyard with seating and a barbecue area will be part of the development, as well as a private wellness space featuring a sauna and fitness room for residents. The project follows the earlier Myslbekova residence in the same area.

Břevnov is known for its historic character, access to green spaces, and full range of local amenities. The nearby Břevnov Monastery, Ladronka and Kajetánka parks, and the Kaštan cultural centre contribute to the area’s residential appeal.

In Prague 4 – Nusle, PSN is redeveloping a six-storey building at Rostislavova 4. The project will offer 15 residential units with sizes ranging from 46 to 67 square metres and layouts between 1+kk and 3+kk. The apartments will be sold in a shell & core condition, allowing buyers to tailor interior finishes to their preferences. The common areas and building façade will be renovated, and amenities will include a revitalised courtyard, bicycle storage, and cellar units.

The Nusle district provides convenient transport connections and a range of cultural and leisure options. Parks such as Jezerka, Folimanka, and Havlíčkovy sady are nearby, offering green space for relaxation.

According to PSN, the projects are designed to appeal to a range of potential buyers, from first-time homeowners and families to investors. The flexible nature of the units and their locations are expected to support long-term value.

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