Owner of the Dancing House: Prague Castle can not buy

Would you like to live in the former Koh-i-noor or Mikrotechna? While other developers are fighting for the last green fields with a potential Prague address, "Péesenka" focuses on notorious addresses. Giving old buildings a new face and residents, that's what it's all about. The company's portfolio is dominated by apartment buildings, but it also includes office buildings. The former Prague Real Estate Administration still focuses mainly on the metropolis, although it also has part of its portfolio in other cities. He builds or renovates some properties and then sells them. Part continues to be managed and rented out. For example, like the iconic Dancing House, which he has owned since 2013.

At the time of its creation, the Dancing House aroused considerable controversy. What was your first impression of Ginger and Fred back then?

I like architecture and exceptional architecture in particular, so the house struck me as something beautiful from the start. Just wow! It is true that Prague was divided into two camps 25 years ago. One of them was enthusiastic about the project and the other categorically rejected it. An absolute yes or an absolute no - nothing in between. I am convinced that today the overwhelming majority of Prague residents perceive Tančák positively.

And from a business point of view? Was this a good buy for PSN?

We bought the dancing house because it is an iconic building. And we want to have, in addition to the more common properties in our portfolio, the absolutely unique ones as well. Right after Prague Castle, it is the most Googled Prague monument. Prague Castle cannot be bought, so the choice fell on Tančák.

We have other iconic buildings in our portfolio, for example the Metronome from Leten. But it is already a purely prestigious, image matter, part of our logo. But economics also works in the case of the Dancing House. And that's not only thanks to renting offices. We set ourselves the goal of opening the house to people, and I dare say that we succeeded. Not only to foreign tourists, but also to Czechs, who for many years had a kind of shyness to step into it. It managed to break. The building has a hotel, gallery, restaurant, cafe, beautiful view from the terrace. Czechs have overtaken foreign tourists in visitor numbers, already in the period before the onset of covid, which is of course a separate chapter...

PSN has been operating on the Czech real estate market since 1991. Originally as the Prague Real Estate Administration, since 2019 only as the PSN company. He has been creating his own portfolio of properties in Prague, Pardubice and Hradec Králové for a long time. They own, for example, the Dancing House, the House of Fashion on Wenceslas Square, the Dlážděná Palace or the City Empiria office building.

A chapter without foreign tourists...

Covid has caused a paradoxical situation. Businesses that until now were at the most lucrative addresses were suddenly the worst off. Profitable apartments serving short-term rentals in city centers were empty from day to day. And Prague was, and still is, worse than the regions in which the tourism industry, on the contrary, increased in some places as Czechs spent their holidays in the Czech Republic. On the other hand, we observe that most of our tenants, including those in the Dancing House, have adapted flexibly. Restaurants, hotels and other businesses focused on the Czech clientele as much as possible. The flexible survived. Although of course they needed help, for example in the form of deferred or temporarily reduced rent.

Have you calculated the covid damage so far?

After the outbreak of the pandemic last spring, we had to immediately address the situation across the portfolio. We were looking for a compromise solution so that our tenants would have a chance to survive this difficult period. We had to convert part of our housing portfolio, which we had rented to big players in the field of short-term rentals, to long-term rentals. And so on. We have found ways to minimize the economic impact of the pandemic.

So you didn't have to step on the brakes with some investment plans?

Nothing like that. Over the next five years, we plan to build ten billion crowns. Build up to three thousand new apartments within less than thirty large and smaller projects. And not only in Prague. And we are looking for new acquisition opportunities, we are interested in both finished projects and projects intended for reconstruction. As well as interesting plots of land suitable for new construction.

Have more investment opportunities appeared on the Prague market in connection with covid? Is there a sale of bankrupt hotels or other properties?

A lot of companies were expecting it, but it doesn't seem like a sell-out is happening. Demand for investments continues to grow. Even in the highest price categories. So it does not only apply to apartments, which are in record demand, which is reflected in their prices. It applies to the entire real estate market and is, among other things, a reaction to the current devaluation of money. Investors who were waiting for some more favorable conditions are finding that nothing of the sort is happening. Prague's commercial real estate market is small. And more or less stable.

The revitalization of older houses prevails within your development activity. Why don't you go more the way of green meadows? Wouldn't it be easier?

We also have such projects, but it is not our gross. Others specialize in that and are good at it. We enjoy giving a new face to a run-down shack, ideally in the wider city centre. To turn it into something really beautiful, which will be beneficial and fit into the surrounding development. What will serve and please at the same time. This is our floor. We always try to add more added value to the project than is usual in development. After 30 years on the market, we already know that buyers can appreciate it. Of course, we also need to make money - things can't be made just because they're beautiful. The economic level is equally important for us. When it happens, we enjoy it. And then we are not at all opposed to a new building on an empty lot, which will give the place a completely new face. We are currently preparing such a project in Vinohrady, for example, on the land after the former Transgas.

František Jiránek

He devoted his entire professional career to work in real estate. He has been leading PSN's commercial real estate division for 25 years and has been involved with the company's largest commercial transactions with his team.

The previous owner, the investment group HB Reavis, planned to build offices on the parcel after Transgas. But you have a slightly different plan, don't you?

We bought the land in April this year and, in contrast to the original plan of the previous owner, we plan to build a multifunctional building here, where there will be both offices and shops, as well as approximately 150 apartments. We decided to dedicate at least half of the building to housing. This is the last complete plot of land in the absolute center of Prague. We bought it for 870 million crowns and we believe that by combining housing, offices and services we will create an absolutely groundbreaking project on it.

Are you planning any other similarly ambitious projects?

We will turn the Koh-i-noor factory in Vršovice into 550 apartments. The location does not need to be introduced to the people of Prague, the potential is huge there. We plan to complete the new building in Vinohrady and the conversion of the Koh-i-noor area within a five-year horizon. Each of these projects represents an investment of around 2.5 billion crowns.

And of course I have to mention the Vanguard Prague loft housing, which we are building from the former Mikrotechna in Modřany. Here we are talking about 250 apartments, spacious lofts with a beautiful view of Prague. I see the project as completely unrivaled. Residents will, for example, have the opportunity to take a special elevator in their own car right up to their own apartment door. That's something you don't see easily. And that's exactly what we're after.

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Renata Lichtenegerová

She studied VOŠP in Prague. For seven years she was the editor of the business weekly Profit. After that, her main workload moved to the changing table, from where she occasionally wrote, for example, for the monthly magazine Obchod a finance... More articles by the author.