Compared to typical developers' headquarters in the city center, V Invest CZ's Prague 5 office in Jinonice is tantamount to being in the hinterland. But given its recent approach to development, the frontier is a fitting place for the company to be.

As prime real estate in Prague has become increasingly scarce, V Invest has looked away from the bright lights of the big city for business opportunities. It found one near the Polish border, tucked away in the western foothills of the Krkonoše Mountains, in the village-turned-resort Harrachov.

V Invest is building a 100-apartment complex in Harrachov called Apartments Čertovka. It already looks to be a financial success. With construction not due to be completed until the summer of 2006, V Invest has sold the entire first phase of 38 flats.

The company is capitalizing on a nascent trend in the real estate market, says Jiří Baloun, assistant in business with V Invest.

"We decided on building [Apartments Čertovka] because recently the tendency has been to buy holiday flats in the mountains," he says. V Invest chose Harrachov because of its year-round appeal. "Harrachov has many advantages. In the winter, there is skiing. In the summer, there is hiking and biking."

Demand for the flats was so high that V Invest sold more than half of the first-phase flats before they were finished. But the project hasn't been entirely trouble-free. "Of course, each project has its problems," Baloun says.

In Harrachov, the problem was that some residents tried to block construction of the apartment complex, signing a petition against the project and delivering it to the town council.

New apartment construction in Harrachov has boomed in the past decade — so much that it spurred the creation of a local nongovernmental organization (NGO) to combat such growth. The group is called "For Maintaining Sustainable Development of Harrachov."

"The construction is a problem and it is devastating Harrachov," says Václav Tondr, spokesman for the NGO. According to Tondr, more than 1,100 new flats have been built in the village since 1994. That's a significant number, considering that Harrachov has a population of fewer than 1,800 people. "The regional plan is old and never anticipated such wide construction," says Tondr.

But Apartments Čertovka received fewer objections from city leaders. There was supposed to a be a new hotel on the location, but when its investor backed down, Harrachov was left with a hole in its center, according to Ota Petrák, head of the construction department at Harrachov Town Hall.

"The city succeeded in getting an alternative project," he says. "I suppose the Krkonoše National Park [KRNAP] and myself were the only ones to have any doubts or objections."

Since Harrachov lies in a protected area, V Invest needed KRNAP 's approval. The company presented three separate plans to the agency, and KRNAP chose a structure that closely mirrored its environment.

Baloun says that many of the villagers are no longer against the project. "They are okay with it because now that it is built up, they can see the result," he says. "It is better for them than if someone built a hotel on the site."

In spite of developing away from Prague, V Invest is still able to tap the Prague market. Baloun says that more than 90 percent of the people who have bought flats are from the city, generally managers or owners of large companies. Many of them plan to use the apartments as investment properties, renting them out to German and Dutch tourists during ski season and the holidays, Baloun says.

As a result of the project, V Invest is looking for other property in Harrachov. But now, more prospective developers are gobbling up desirable property in the small village.

"The situation is quite different than before we started the project," Baloun says. "More attractive land has been sold."

V Invest is also working on a project in Šumava, a mountainous national park in south Bohemia along the German-Austrian border noted for hiking and cross-country skiing.

"It is different from Krkonoše," Baloun says. "People who buy apartments there have gone to Šumava for the past 20 or 30 years, and they have a relationship there."

The development is a block of 19 holiday flats, a relatively large project for the area.

"Šumava is very famous, but for some reason not for investors," Baloun says.

Maybe not. But if the market in Šumava proves to be as ripe as it was in Harrachov, it will soon be famous with investors, too.