The buildings instead of Masaryk Station could cost up to 24 billion CZK

Prague - New higher-category apartments, offices, and smaller commercial spaces may emerge at the site of Prague's Masaryk Station, experts in the real estate market contacted by ČTK estimate. They also believe that the developer will not have financing issues for the project due to the attractive location. According to some experts, project costs could reach as much as 24 billion crowns. Prague councilors approved changes to the zoning plan on Tuesday, which envisions the construction of a new urban center over 20 hectares at the site of Masaryk Station.
Changes to the zoning plan still need to be approved by the representatives; according to Jakub Ptačinský from the Ministry of Transport's press department, only the ministry can decide on the station's closure. "The path from the zoning plan change to the construction permit is very long and thorny, possibly even several years," said ČTK real estate expert Arnošt Hejduk from Rooney & Bennett.
The attractiveness of the land at Masaryk Station lies predominantly in the fact that it is one of the last suitable locations in the center of Prague for development, according to real estate expert Martijn Kanters from the international consulting company DTZ. According to Dušan Šťastník from the international consulting company King Sturge, the costs of financing new construction in the area of today's Masaryk Station could reach up to one billion euros, or approximately 24 billion crowns.
Experts suggest a multifunctional project could arise on the land of today's Masaryk Station, including apartments, offices, shops, and hotels. "From the standpoint of commercial construction, it is an excellent location in the city center, where we can expect the construction of first-class offices, quality to luxury apartments, and retail," Šťastník told ČTK. The multifunctional nature of the new construction in the area of Masaryk Station is also likely according to analyst Ondřej Vlček from Jones Lang LaSalle, although he claims the city hall prefers apartment construction.
There are no fears regarding demand for new apartments, which has overall occurred on the market, according to Hejduk, in this area. However, it is said that only higher-category apartments can be accounted for here, which will likely not cost less than 80,000 crowns per square meter. "This segment lacks locations (in Prague)," noted Hejduk.
In terms of retail, according to Kanters, it will be necessary to carefully consider the composition of new retail spaces due to the nearby Palladium shopping center and the Tesco department store on Národní Street. "The development of a large fashion-focused shopping center, like Palladium, may not work in this location," Kanters remarked. Stores should be smaller, more specialized, and should not exceed 20,000 square meters, according to him.
On the contrary, modern class A offices would certainly not have demand issues in the area due to their shortage in Prague 1, according to an expert from DTZ. However, according to an expert from King Sturge, the space of the land at today's station is also sufficient to find space for sports or cultural activities, and there should also be park greenery.
The revitalization of the station will be taken over by the development company ING Real Estate Development, which is part of the international financial group ING. Experts therefore do not expect financing issues to arise in this case, which some other development projects currently face. "If it is true that the developer for this location will be ING Real Estate, this developer will certainly not have financial problems, as it usually uses its own funds from the ING group," Šťastník stated.
Other experts believe that the project will not have financing issues regardless of the developer. "I do not expect the developer to have financing problems due to the high quality of the project that is possible to develop in this location. Although development costs will be relatively high here, they will be easily compensated by the expected profits," Kanters noted.
If the transformation of Masaryk Station into a residential, office, and commercial area occurs, it will join other current large development projects planned in the metropolis on railroad lands. These include planned constructions around the Bubny station, at the Žižkov freight station, or around the Smíchov station. In terms of area, the new residential and administrative complex project on Rohanský Island will also match these projects in the wider center of Prague.

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> Prague no longer counts on Masaryk Station, wants apartments there [6.8.2008]