Prague builds 50,000 apartments in 10 years, but housing shortage persists

More than 50,000 new apartments have been completed in Prague between 2014 and the end of 2024, with Prague 9 leading in terms of development activity. Despite this construction, the pace of housing delivery has not kept up with population growth, and demand continues to outstrip supply.

During the past ten years, Prague 9 accounted for nearly one-quarter of all new apartments built, followed by Prague 4, 5, and 10, each contributing around 16 percent. Together, these four districts made up almost three-quarters of all new housing in the capital. Their prominence in development is due largely to the availability of large brownfield and redevelopment sites, which offer opportunities for the creation of new residential areas.

Central Group, the Czech Republic’s largest residential developer, completed nearly 8,000 of the 50,000 apartments delivered over the last decade, meaning one in every six new units in Prague was built by the company. Since its founding, Central Group has constructed over 20,000 apartments. Currently, the company has around 3,000 apartments under construction, valued at CZK 25 billion, and is preparing a further 35,000 units intended to accommodate approximately 70,000 people.

However, despite these figures, the capital’s housing supply remains inadequate. Prague’s population has grown by around 150,000 people in the same ten-year period, excluding a daily influx of approximately 300,000 commuters and the arrival of tens of thousands of Ukrainian refugees. At the same time, many existing buildings require renovation, adding pressure to the city’s housing stock. The current level of new development does not meet the needs of the city’s expanding population or compensate for historical housing shortages. Demand for new apartments remains high, and 2025 is expected to see record sales.

The key to expanding Prague’s housing supply lies in unlocking brownfield sites. Around two-thirds of the 150,000 apartments currently in planning across the city are located on former industrial or underused plots. Prague 9 is a prime example, where several new neighborhoods are emerging on such sites, contributing to a consistent supply of new homes and offering some of the city’s most affordable prices.

Central Group Executive Director Michaela Váňová emphasized the importance of prioritizing brownfield redevelopment. “Where else should we build if not on brownfields? These sites already have existing infrastructure, they are located in desirable areas, and their redevelopment can bring new life to previously underused parts of the city. But zoning changes often take years to approve, delaying much-needed construction and pushing up housing prices,” she said. “We need more responsive and flexible urban planning to unlock this potential and meet the city’s growing housing needs.”

LEG Immobilien reports strong start to 2025 with 28% AFFO growth and stable outlook

LEG Immobilien SE has reported a solid start to the 2025 financial year, underpinned by continued demand for affordable housing in Germany. The company posted Adjusted Funds From Operations (AFFO) of EUR 62.3 million in the first quarter, up 28.2% compared to the same period last year. The full-year guidance for AFFO remains unchanged, targeting between EUR 205 million and EUR 225 million.

Rental income in the free-financed segment rose by 3.5% on a like-for-like basis, while the overall portfolio showed a 3.0% increase. The average base rent per square meter stood at EUR 6.87, translating to approximately EUR 440 per month for a typical 65-square-meter LEG apartment. The vacancy rate also improved slightly, falling by 20 basis points year-on-year to 2.4%.

The recent acquisition and integration of Brack Capital Properties (BCP) added over 9,000 residential units to LEG’s portfolio. While this contributed to earnings growth, it also increased the loan-to-value ratio slightly to 48.4%, up from 47.9% at the end of 2024. LEG expects the figure to decline in the medium term as asset values stabilize and the company pursues further portfolio optimization.

Net Tangible Assets (NTA) per share increased to EUR 128.44 as of March 31, up from EUR 125.90 at the end of 2024. The company anticipates a further rise in asset values, estimating a portfolio revaluation of 0.5% to 1.0% in the first half of the year.

LEG has continued its divestment strategy, transferring ownership of 1,456 units valued at EUR 125 million since the beginning of the year. The company revised its sales plan following the integration of BCP, now aiming to sell around 5,000 units in total. Despite current market conditions, LEG remains focused on securing favorable sale prices, prioritizing value over speed.

The company’s gross yield for its total portfolio was 5.0% as of March 31, offering a premium over German 10-year government bonds. Investments in the quarter were slightly lower, at EUR 7.51 per square meter, but LEG expects higher capital spending through the rest of the year, particularly as it begins projects from the former BCP portfolio. Annual investment is projected to rise from EUR 34 to at least EUR 35 per square meter.

LEG’s financing remains stable, with an average interest rate of 1.55% and an average debt maturity of 5.6 years. The company maintains a Baa2 credit rating with a stable outlook and has already addressed all debt maturities through 2025. In January, LEG successfully placed a EUR 300 million, 10-year bond with a coupon of 3.875%. As of March, liquidity stood above EUR 800 million.

The company continues to engage with policy developments. It expressed concern over the federal government’s planned extension of the rent cap until 2029, arguing that it reduces incentives for new housing construction. Conversely, it welcomed regulatory changes favoring emissions efficiency over strict insulation standards. LEG supports cost-effective climate measures, particularly those that reduce CO₂ emissions with minimal impact on tenants.

Its subsidiary ventures, such as termios, dekarbo, and RENOWATE, reflect this focus. Termios reached a milestone in March with the commercial launch of “termios Pro,” an AI-supported thermostat that enables hydronic balancing and energy savings of up to 30%. Over 20,000 thermostats have already been ordered by external housing companies.

Digitalization continues to play a key role in LEG’s strategy. Approximately 28,000 tenants use the “LEG Hausportal” to receive updates and provide feedback on service quality. The platform, developed by LEG subsidiary youtilly, is now being offered to other housing providers. In parallel, LEG has restructured its IT services into a new unit, LEG Technology and Digitalization, to consolidate expertise and strengthen its use of AI and smart systems.

With stable core operations, improving property values, and strong liquidity, LEG confirms its full-year AFFO guidance and expects AFFO per share to rise more than 7% compared to 2024, based on the midpoint of the target range. The company’s performance in early 2025 supports confidence in its strategy despite ongoing market and regulatory challenges.

Silverton Sells Two Properties in North Rhine-Westphalia

Silverton Asset Solutions GmbH, part of the Silverton Group, has completed the sale of two properties in North Rhine-Westphalia from a larger portfolio under its management. The sale prices were not disclosed.

The first asset, located at Hindenburgstrasse 304–306 in Mönchengladbach, was acquired by a southern German family office. Built in 1992 and modernised in 2007, the mixed-use property comprises approximately 3,750 square metres of rental space, including offices, medical practices, residential units, a dance studio, and retail premises. Through active asset management, Silverton leased around 1,780 square metres to new tenants and extended contracts covering another 570 square metres. This resulted in a weighted average lease term (WALT) exceeding ten years and an occupancy rate above 65 percent at the time of sale. Additional value potential remains in the leasing of vacant units.

The second property is an office building at Formerstrasse 49–51 in Ratingen, which was sold to an international investor. The 4,600 square metre building, completed in 1990, is currently vacant. The site spans roughly 3,800 square metres. A preliminary building permit for conversion to hotel use has recently been secured.

“These transactions show that even in a difficult market environment, creative and proactive asset management, combined with targeted strategies, can lead to successful outcomes,” said Sebastian Steinert, Managing Director of Silverton and Head of the North Rhine-Westphalia office.

Legal advisory for the transactions was provided by Osborne Clarke. The two properties were part of a nearly 40-asset portfolio managed by Silverton following a restructuring. Most of the portfolio has now been successfully sold.

Art-Invest Real Estate acquires residential portfolio in Stockholm county

Art-Invest Real Estate has acquired three newly developed residential buildings in Barkarbystaden, Stockholm County, from Swedish developers Åke Sundvall and OBOS. The transaction was completed on behalf of one of Art-Invest’s institutional investment funds. The financial details of the transaction were not disclosed.

The acquired properties, completed in 2024, comprise approximately 10,000 square meters of residential space and include a total of 158 fully leased apartments. Among them is an LSS care home with six residential units. The assets carry the Nordic Swan Ecolabel (“Svanen”) and meet high technical standards.

Located next to the planned Barkarbystaden metro station, which is scheduled for completion in 2027, the properties are situated in one of Sweden’s most ambitious urban development zones. Barkarbystaden, located in the Municipality of Järfälla, is expected to expand to 14,000 residential units by 2032 and will be supported by metro and regional rail connections, aiming to become a key transit and residential hub for northwest Stockholm.

Art-Invest Real Estate opened its Stockholm office last year and previously acquired the Stockholm Quality Outlet in Barkarbystaden as its first investment in the area. This latest transaction marks the company’s first residential acquisition in Sweden.

Commenting on the acquisition, Johan Öhlund Lagerdahl, Head of Stockholm at Art-Invest Real Estate, noted that the company sees ongoing growth potential in the Swedish market. “I have seen Barkarbystaden evolve over the past two decades and am pleased that we have now completed our first residential deal here. We will continue to seek further opportunities across Sweden, with a focus on locations that offer strong prospects for long-term growth,” he said.

Martin Sundvall, CEO of Åke Sundvall AB, welcomed the transaction and noted that Art-Invest’s long-term investment strategy and established presence in the area made it a suitable buyer. “This residential sale is part of our Atlas project. We are confident that Art-Invest is well positioned to manage this strategically located asset,” he said.

Legal and tax advisory for Art-Invest Real Estate was provided by Setterwalls and K&L Gates. The sellers were represented by FHH Law and advised by HM Partners.

Europe Distribution Group leases 7,500 sqm at MLP Wrocław logistics park

Europe Distribution Group (EDG), a company involved in the production and distribution of cosmetics, bath products, detergents, and cleaning supplies, has signed a lease agreement for 7,500 sqm at the MLP Wrocław logistics park. The lease includes 7,300 sqm of warehouse space and 200 sqm dedicated to office and staff facilities. The transaction was facilitated by real estate advisory firm Sawitar Estate Broker.

Under the agreement with MLP Group, the facility is scheduled for completion at the beginning of next year, though EDG will be granted early access to the premises starting in June 2025. The decision to lease space at MLP Wrocław was based on operational requirements and location, with EDG citing the need for flexibility and a responsive logistics partner.

EDG was supported throughout the lease negotiation process by Sawitar Estate Broker. According to the advisor, the transaction was completed efficiently, and the selected facility met the client’s technical and logistical needs.

MLP Wrocław is a logistics complex located on a 13-hectare site in the Psie Pole district of Wrocław, approximately 14 km from the city center. The park comprises five warehouse buildings with a total area of 66,228 sqm, some of which hold BREEAM certification. The site is positioned near national road E67 and the S8 expressway, offering convenient access to major transport corridors.

MLP Group continues to manage the logistics park after construction under its build-and-hold strategy, providing long-term support to its tenants and offering tailored leasing solutions.

Syrena Real Estate acquires Zaułek Piękna office building in central Warsaw

Syrena Real Estate has acquired the Zaułek Piękna office building in Warsaw’s central Śródmieście district from Manova Partners, the company announced. The acquisition was partially financed by mBank and includes plans for a significant modernization of the property.

The building offers more than 8,100 square meters of office space and approximately 700 square meters of retail and service units. The largest tenant is international consulting firm Mazars, which occupies over 20 percent of the building. Other tenants include OC&C Strategy Consultants, institutional rental operator LivUp, and advisory firm Fidea.

According to Syrena Real Estate founder Witold Zatoński Kotomski, the company aims to reposition the building to meet contemporary standards for office space while contributing to the revitalization of the surrounding area. “Zaułek Piękna is a property with high repositioning potential. Our goal is to make it a flagship building in Śródmieście and redefine its commercial offering,” he said.

The transaction reflects ongoing trends in Warsaw’s office market, where a limited pipeline of new developments, rising construction and fit-out costs, and tenant preferences for central locations have increased demand for high-quality existing properties.

Manova Partners was advised in the transaction by Cushman & Wakefield, Greenberg Traurig, Sentient, and KPMG. Syrena Real Estate was supported by Wolf Theiss and REESCO, while Addleshaw Goddard advised mBank.

Commenting on the acquisition, Marcin Kocerba, Partner in the Capital Markets Department at Cushman & Wakefield, said the deal highlights the growing investment activity of local players. “With limited new development in Warsaw and a declining supply of well-located, high-quality buildings, properties like Zaułek Piękna are becoming increasingly attractive,” he noted.

The purchase aligns with Syrena Real Estate’s strategy of modernizing existing office properties. The firm previously completed the HOP office project on Chmielna Street (14,000 m²) and the Diuna complex in Mokotów (46,000 m²).

Syrena Real Estate, established in 2016, is a privately held Polish company specializing in direct real estate investment and asset management on behalf of international investors.

UniCredit Bank sees 5% rise in net profit in Czech Republic and Slovakia

UniCredit Bank, operating in both the Czech Republic and Slovakia, recorded a net profit of EUR 108 million (CZK 2.7 billion) in the first quarter of 2025. This marks a year-on-year increase of 4.9 percent, according to results published by the bank’s parent company. The positive performance aligns with broader profit growth trends among other banks in the region.

Customer deposits at UniCredit Bank rose by 11.9 percent over the past year, reaching CZK 633 billion, while the volume of loans granted grew by 4.7 percent to CZK 604 billion. The bank also reported a strong increase in net income from fees and commissions, which climbed by 25.9 percent to CZK 2 billion. However, net interest income declined by 4.5 percent to CZK 3.9 billion. Overall, the bank’s net operating profit stood at CZK 3.7 billion.

UniCredit Bank’s results were part of a broader trend of profit growth in the Czech banking sector. Česká spořitelna reported a first-quarter net profit of CZK 5.7 billion, a slight increase of 0.3 percent year-on-year. Komerční banka’s profit surged by 49.3 percent to CZK 4.2 billion, Moneta Money Bank saw a 14 percent rise to CZK 1.5 billion, and Raiffeisenbank posted a 21 percent increase to CZK 1.7 billion.

UniCredit Bank entered the Czech market in November 2007 following the merger of HVB Bank and Živnostenská banka. Today, the bank serves nearly 900,000 clients across the Czech Republic and Slovakia.

Czech unemployment held steady at 4.3% in April despite seasonal hiring

Unemployment in the Czech Republic remained at 4.3% in April, unchanged from March and marking the highest April unemployment rate since 2017. According to data released by the Labour Office of the Czech Republic, the figure represents a year-on-year increase of 0.6 percentage points. While analysts had expected a decline in unemployment due to the onset of seasonal work, weak performance in the industrial sector offset gains in agriculture and construction.

At the end of April, 318,540 people were registered as unemployed—3,600 fewer than in the previous month. During the same period, the number of registered job vacancies rose by 4,046 to reach 95,798. On average, there are currently 3.3 job seekers per vacancy.

Labour Office CEO Daniel Krištof commented that the labor market is becoming increasingly divided. He noted that while seasonal jobs are available, the mismatch between available positions and the qualifications of job seekers is growing. He emphasized the importance of continuous education and timely retraining to bridge this gap, stressing that upskilling should not be delayed until after job loss.

Vít Hradil, chief economist at Investika, explained that seasonal work typically lowers unemployment in spring, especially in agriculture and construction. However, this effect was largely absent this year due to weak demand in industry, which has been cutting back on employment.

Many of the newly unemployed individuals come from sectors such as retail, wholesale, metal manufacturing, vehicle production, education, public administration, and postal services. Meanwhile, employers are currently seeking building construction workers, warehouse staff, cooks, assembly line workers, truck and tractor drivers, and cleaners.

Jiří Pour, an economist at UniCredit Bank, noted that the average length of unemployment is increasing. The proportion of short-term unemployed individuals—those out of work for a short duration—fell by three percentage points to 26% in April.

Regionally, the highest unemployment was recorded in the Ústí nad Labem Region at 6.6%, followed by the Moravian-Silesian Region at 6%. Prague reported the lowest unemployment rate at 3.1%, though it, along with the Karlovy Vary Region, was one of only two regions where unemployment ticked up slightly—by 0.1 percentage points.

Looking ahead, analysts expect the average annual unemployment rate to rise in 2025 compared to the 3.8% recorded last year. Miroslav Novák, chief analyst at Citfin, forecasted that unemployment will likely remain in the 4.3% to 4.5% range this year. He warned that large-scale layoffs in the manufacturing sector, particularly in response to U.S. tariffs and weakening demand, pose a continued risk.

Source: CTK and Labour Office of the Czech Republic

Hungary posts record budget deficit, government freezes some spending

Hungary recorded a historic budget deficit of over 2.9 trillion forints (approximately CZK 178 billion) between January and April 2025, marking the highest shortfall for this period on record. The growing cost of interest payments and pensions outpaced the rise in tax revenues, prompting the government to implement a freeze on parts of its budget spending, according to a report by Bloomberg.

In April alone, the deficit reached 376 billion forints. Cumulatively, the shortfall over the first four months of the year amounts to 71 percent of the annual deficit target set by the government, Reuters noted.

State Secretary at the Ministry of Economy, Kornél Kisgergely, stated that the freeze in spending demonstrates the flexibility of Hungary’s fiscal policy, though he did not specify which expenditures would be affected.

Prime Minister Viktor Orbán’s administration is aiming to reduce the budget deficit to 4 percent of GDP in 2025, down from 4.9 percent in the previous year. The government is relying on a projected economic recovery to meet this goal and bolster its position ahead of parliamentary elections scheduled for next year.

However, there are concerns from financial institutions about potential pre-election fiscal loosening. Credit rating agency S&P Global Ratings has warned of the risk that government spending could rise in the lead-up to elections. Kisgergely has dismissed such concerns, stating the Cabinet does not plan to increase spending for political purposes.

The government has forecast economic growth of 2.5 percent this year, but the independent Budget Council has questioned the optimism of this projection, especially after the economy contracted in the first quarter of 2025.

Source: CTK

Heavy drinking in Czech Republic concentrated among one-fifth of consumers

A disproportionate share of alcohol consumption in the Czech Republic is attributed to a small segment of the population, with experts stating that over two-thirds of all alcohol is consumed by just one-fifth of drinkers. This pattern of heavy drinking places a significant burden on public health and the economy, according to speakers at the “Together for a Healthier Czech Republic” seminar held in the Chamber of Deputies.

The health and social consequences of excessive alcohol use are estimated to cost the country tens of billions of Czech crowns each year. As many as 8,000 deaths annually are linked to alcohol-related causes. Despite collecting approximately CZK 15 billion per year from alcohol excise duties, experts warned that this revenue comes at a high human and financial cost.

Jindřich Vobořil, chair of the board at Randum Cirlistic Policy of Addiction Policy and former national anti-drug coordinator, emphasized the importance of prevention. He advocated for supporting moderate consumption and improving access to help for those with alcohol dependency. Instead of broad restrictions, he suggested targeted policies that promote less harmful alternatives, such as offering tax incentives or preferential marketing opportunities for low-alcohol beverages.

Other experts at the seminar supported regulatory changes, including limits on alcohol sales hours and locations, as well as taxation based on alcohol content. The initiative received backing from dozens of organizations, including the Czech office of the World Health Organization and the Czech Medical Chamber.

Michael Fanta of the Center of Economic and Market Analysis (CETA) stressed the need to reduce the availability of ultra-cheap alcoholic drinks by introducing a minimum price per unit of pure alcohol.

Dagmar Dzúrová from Charles University noted that alcohol-related premature deaths—especially among men—account for about six percent of all annual deaths. If these were avoided, the average life expectancy in the Czech Republic could rise by 1.5 years. In addition to liver disease, alcohol contributes to several cancers, cardiovascular conditions, and mental illnesses.

Despite these figures, alcohol consumption remains deeply normalized in Czech society, Dzúrová added. Children grow up in environments where drinking is seen as routine, and health concerns are often overlooked. Symbolic toasts for well-being stand in stark contrast to the actual long-term damage alcohol inflicts, even in small doses.

To address these issues, the initiative has put forward five main recommendations. These include revising alcohol taxation, banning alcohol advertising online and at sporting events, restricting advertising on TV and radio, and reducing alcohol sales at petrol stations, near schools, and in public buildings—particularly during late-night hours. The group also called for stricter enforcement of existing laws, such as prohibiting sales to minors, and the launch of new educational campaigns to raise awareness about alcohol’s health risks.