DROPPING - Demand for new flats in the Czech Republic has been falling recently, with approximately 25 percent remaining unsold, Hospodářské noviny reports. Only one-tenth of new units sat vacant three years ago, and just three percent in 2000. Currently, there are some 4,000 new flats waiting to be sold. However, the number of new projects continues to increase because of the low value-added tax (VAT) rate on housing-related projects. Under the current exception negotiated with the European Union, the Czech Republic will raise VAT on housing-related construction work from 5 percent to 19 percent after 2007.

PLANT - Cadence Innovation Group's Cleverglass will build a 1 billion Kč plant near Liberec next year to produce polycarbonate glass sheets, reports Mladá fronta Dnes. The north Bohemian town of Hrádek nad Nisou has been named the most suitable site for the plant. "We will be the first company in the world to produce polycarbonate glass sheets protected against scratching by a resistant layer," the company's Pavel Neumann told the daily. The material is designed to replace the glass used to make side and rear car windows. Cleverglass will employ some 200 staff in the plant.

VACANCIES - The aggregate vacancy rate in the Central and East European (CEE) office market has reached an all-time low, CB Richard Ellis says in a recent report. An increase in the amount of office take-up and a sharp decrease in new development completions during the third quarter caused the slump, according to the report. Of the primary office markets in CEE — Bratislava, Bucharest, Budapest, Moscow, Prague, Sofia and Warsaw — the aggregate vacancy rate at the end of the third quarter was 8.3 percent.

VALUE - Prague has maintained the 13th position in the ranking of Europe's top business locations, according to European Cities Monitor, an annual survey issued by C&W/H&B. "Gratifying for Prague is the fact that, after Barcelona, it was evaluated as the city doing the most to improve its business environment," says Andrew Thompson, head of the office leasing team at C&W/H&B in Prague. "Prague's reputation among foreign companies is strong, with 34 firms planning to expand here over the next five years."

HOTEL - Rocco Forte Hotels is planning to open a five-star hotel in the immediate neighborhood of Prague Castle. The property will be created from a complex of five buildings. The largest and most important structure is the St. Thomas Monastery, which dates to the 1400s. The hotel is a joint venture between Rocco Forte Hotels and the Bank of Scotland. Work is due to start in early 2006 and should be completed in 2007.

AVALON - The Acred Group announced plans to construct the Avalon Business Center, a group of six linked contiguous buildings in downtown Plzeň, west Bohemia, totaling 22,000 square meters. The buildings will hold office space, commercial space, a restaurant and a fitness center. The complex is scheduled to open in late 2006.

RISING - Housing costs will grow in the next two years and so will their share in family spending, the Finance Ministry says on its Web site. Currently, housing costs make up 18.5 percent of the net spending of an average Czech family. Next year, that will rise to 19.4 percent and in 2007 it will rise to 19.7 percent. The net monthly income of Czech households is predicted to grow from this year's 21,540 Kč to 22,332 Kč in 2006 and 23,204 Kč in 2007. Net spending, however, will be higher as well.

EXODUS - German retail chain Edeka has decided to leave the Czech market and is preparing to sell the 38 outlets it operates in the country, according to the weekly Euro. Edeka is the third foreign retail chain to quit the country recently, after Austria's Julius Meinl, which sold its 56 outlets to Ahold Czech Republic, and Carrefour, whose network of 15 outlets in the Czech Republic and Slovakia was sold to Tesco Stores CR. CS Edeka, a unit of German company Edeka, entered the Czech market in 1992. Last year, the retail chain generated sales of 1.63 billion Kč, roughly the same as the year before, making it the 32nd-largest retail chain (ranked by sales) in the Czech market.