Ten thousand new flats are now on sale in Prague. They don’t only represent a problem for the developers who are not able to sell them; banks also have unwillingly deposited capital in the apartments. Some financiers, who would like to remain anonymous, say amounts as high as tens of billions of Czech crowns in danger of being written off.
Thousands of flats are currently available in Prague. Developers made their calculations during the construction boom, when construction and land prices were inflated. Finished flats from the boom time are more expensive than ones being built now, when costs are lower. The question is how long developers can afford to keep the flats unsold before having to make a deep price cut.
The Supreme Audit Office (NKÚ) is accountable to a parliamentary committee, but so far its director has been refusing to provide documents that would permit an audit of the institution. Furthermore, the lease for the NKÚ’s offices has also raised some questions. Top-level politicians like PM Petr Nečas — who promised to end corruption — are conspicuously absent among the people calling for an investigation.
Does Prime Minister Petr Nečas (Civic Democrats, ODS) really intend to intervene in the scandals relating to Supreme Audit Office (NKÚ) chairman František Dohnal, who has repeatedly refused to deliver to the members of the parliamentary audit committee the documents necessary for the audit of the financial management of the NKÚ? Or is he all (slick) talk and no (decisive) action?
A plan to move the Institute for the Study of Totalitarian Regimes (ÚSTR) from its currrent Prague 3 headquarters to the Micron building in Modřany — along with the Security Services Archive (ABS) — has collapsed. Belgian developer Serge Borenstein, who owns the Karlín Real Estate Group, had hoped to obtain three apartment buildings as part of the deal.
A day after announcing plans to acquire more receivables for the troubled lottery and betting firm Sazka, Czech real estate tycoon and financier Radovan Vítek’s property company Czech Property Investments (CPI) has announced that he has become the sole shareholder. Vítek was already the de facto owner, but had made his mother CPI majority shareholder due to divorce proceedings.
Real estate investors are expected to widen their scope in 2011 to include the CEE region, according to consultancy Jones Lang LaSalle. Overall, investors will spend up to €700 million on real estate in the Czech Republic in 2011, but that doesn’t match the growth rate expected in Europe as a whole. One drawback is the market lacks properties for opportunistic funds to buy.
Chinese entrepreneurs came up with the idea. If everything works out, the Czech Republic won’t pay a single crown for a new Shanghai-based Czech House (Český dům) — a state-sponsored center serving as a contact point between investors and Czech institutions. The question remains whether having representation in the most populous Chinese city would prompt Czech entrepreneurs to enage more with China.
The Czech politicians and authorities have systematically failed to address serious allegations of corruption, Supreme Audit Office (NKÚ) vice president Miloslav Kala said in an interview. The solution is not to further analyze the situation but rather to implement anti-corruption policies long under discussion — including extending the NKÚ’s powers, he says.
Chinese law firms have been somewhat slow to follow Chinese capital abroad. Now, however, the Chinese law firm Yingke has become the first to open a branch in CEE with a local partner. Chinese firms frequently have difficulty adapting to the in European business culture; the new firm will help fill the gap.