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J&T Real Estate heads to the suburbs

Company's much-touted Prosek Point office project is scheduled to wrap up by June 2009

By Curtis M. Wong
Staff Writer, The Prague Post
September 19th, 2007 issue

Jan Přerovský/THE PRAGUE POST
Martin Kodeš, who oversees real estate projects for J&T, calls Prosek Point a "pioneering" office venture for the Prague 9 neighborhood.
COURTESY PHOTO
J&T hopes Prague 9 will become a "new center of development." The company's first project in the area, Prosek Point, is currently under construction.
COURTESY PHOTO
J&T Real Estate CZ

Pobřežní 14
Prague 8
Tel.: 221 710 224
Web:
www.jtbank.cz

With rents soaring to exorbitant levels in central Prague, it isn’t just city residents who are heading for the suburbs these days, it’s major businesses as well.
Capitalizing on this corporate trend — and breaking fresh ground at the same time — is the new Prosek Point project, a complex of three administrative buildings with more than 25,000 square meters (269,000 square feet) of rentable space, to be located at the intersection of Prosecká and Vysočanská streets in Prague 9. Helmed by J&T Real Estate CZ, the project’s construction began in May and will be developed in three individual phases. The first phase, which J&T hopes to complete in July 2008, includes the interior and exterior designs of an eight-story building and the outer shell of another. The end of this phase will coincide with the completion of metro line C’s extension, with the new Prosek neighborhood underground station in close vicinity. The company hopes to complete the remaining two buildings by June 2009.
Originally founded in Bratislava in 1997, J&T quickly established itself in the Slovakian real estate market as a leader in the field of residential, office and hotel projects as well as logistics parks. The company’s Prague office opened in 2004 and hopes to similarly expand within the country.
On hand for the founding of the company’s Prague branch was Martin Kodeš, J&T’s head of real estate projects. Though he comes from a long line of civil engineers, Kodeš has certainly left his mark. Since 2004, he’s seen the company’s regional investment grow steadily. Early figures project the company’s total investment reaching 700 million euros ($968.3 million/19.3 billion Kč) over the next five years.
He recently sat down with The Prague Post to speak about J&T’s corporate philosophy and how he hopes the Prosek Point project will help to re-define the Czech real estate development world.
The Prague Post: How will the Prosek Point project be different from other administrative buildings in the city of Prague?
Martin Kodeš: Of course it will be the best administrative building in Prague! Just joking. Seriously, though, in terms of the location, Prosek Point is a pioneering project because there are no existing office developments in this area of Prague. So Prosek Point is the first development project in the area, and, in building it, we’d like to start a new center of development that would possibly rival projects in Prague 4 in the future. It’s a variable building that will hopefully satisfy nonstandard requirements of many clients. The completion of the project has been timed perfectly to meet the completion of the extension of metro line C. Another advantage for tenants is our asking price. Right now our asking price is much lower than in Prague 4 or 5. The real estate there will definitely appreciate once this metro extension is completed. We’re planning two other future projects in this area, and by then the asking price will have increased.
TPP: The expectations for Czech administrative buildings have changed considerably in the past 10 years. How will the new Prosek project fulfill those expectations?
MK: I’ll agree that the market has changed a lot in the past 10 years. We really feel that the Prague real estate market has become a lot more like the market in the rest of Europe. As for continuing trends, many companies are leaving the center of Prague because of problems there, which include difficult transport, high rent and the increasing prestige of areas outside of the center. With the arrival of international businesses, many companies are more conscious of what the cost of rent will cover than ever. A lot of those companies are making more pragmatic decisions. They may still want their headquarters in a central locale, but, for a Prague-based branch office, they mostly want good accessibility to the city center by public transit and good-quality office space. The same would apply to Czech companies that are more realistic. This project should fulfill those expectations.
TPP: There seems to be a big emphasis on green space in the Prosek project. Why do you think that green space will be important for building tenants?
MK: A certain amount of green space is required in the development plan. From the research we’ve done, we know that people who work in these types of offices are much happier if there’s a lot of surrounding green space. The entire project is located at the edge of a park and the rooftops, which would ordinarily not be used, also have green space.
TPP: How is this project unusual when compared to your company’s previous development projects?
MK: It’s really only our second major development project in the country. I feel that we try to be sensitive to the needs and requirements of our surroundings, and we feel this particular area is very suitable for development. If we look at our company’s other projects, you’ll notice that all of them are different. We feel this location is ideal for office space.
TPP: How would you like your company to expand, both within and outside the Czech Republic?
MK: In terms of real estate, the company is active in two countries right now: Slovakia and the Czech Republic. It’s been active on the Slovak market for a long time, and we’re one of the strongest companies there. We started in the Czech Republic later, and we’ve already got 20 billion Kč in ongoing project investment. It’s pure speculation on my part at the moment, but of course, I think we are planning to expand to other countries as well.
TPP: How would you describe your company’s agenda for 2008?
MK: I think we have some great tasks ahead. In a nutshell, 2008 will be very important for us. We have great projects that we’re developing. We’re hoping to become a bigger presence in the Prague real estate market.  
TPP: What sets your firm apart from other rivals in the Czech real estate development world?
MK: That’s a difficult question. I feel we have a very good team of skilled people, and we have strong financial support of our group. Development is, of course, a lot about money. In real estate development, the site and location of a project are two of the most important factors. So, we also own high-quality real estate in terms of land, which is suitable for our projects.  
TPP: What inspired you early on to pursue real estate development as a career?
MK: Well, I first started out as a civil engineer. It’s a long tradition in my family to work in civil engineering. My grandfather owned a construction company before World War II, and I have two important structural engineers in my family as well. So basically it’s in my family. I think I inherited the talent and didn’t have to think too hard about it.
TPP: What personal skills are necessary to succeed in the Czech real estate development industry?
MK: You really have to have a nose for good projects and, of course, just a bit of luck. And that’s all.

Curtis M. Wong can be reached at specialsection@praguepost.com


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