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October 7th, 2008
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'Forward-thinking' developments

Real estate company transforming Czech Republic with its sleek building projects

By Curtis M. Wong
Staff Writer, The Prague Post
May 21st, 2008 issue

VLADIMÍR WEISS/THE PRAGUE POST
Michal Štěpánek, co-founder of Michael Development, says his company's motto and goal for its clients has always been "security."
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COURTESY PHOTO
Michael Development's Rezidence Belárie Modřany is an example of the of work the company strives hard to maintain.
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Michael Development


Rašínovo nábř. 58
Prague 2
Tel.: 222 510 922
E-mail: info@michaeldevelopment.cz
Web: www.michaeldevelopment.cz

Michal Štěpánek never intended to be a real estate mogul. In fact, he originally set out to establish himself as a photographer, eventually shifting gears into the advertising world.
However, Štěpánek was never one to rest on his laurels. His good friend Petr Linhart, who’d been working in the real estate business for more than 30 years, approached him with the idea of co-founding Michael Development nearly seven years ago. Štěpánek describes the transition as smooth and “forward-thinking.”
Interestingly, Michael Development approached the world of Czech residential real estate in a roundabout way. Bypassing the capital initially, the company’s flagship project was a luxury housing complex in the Šumava Mountains. But, fortunately, Prague-based projects soon followed.
Perhaps the most ambitious development on the company’s current roster is Palác Ehrlich, which officials describe as the future “jewel of Plzeň.” Designed by renowned architect Bořek Šípek, the roughly 300 million Kč ($18.5 million) project will introduce American comfort standards to the city of Plzeň. The development carries personal value for Štěpánek as well, with its name being a nod to his Jewish heritage. Construction is set to start in August. Also currently in development are high-end housing projects in Vysočany and Modřany.
Recently, Štěpánek took time out from his busy schedule to speak to The Prague Post, offering his thoughts on the future of the Czech real estate industry and talking about why creativity still matters as much as finances in the world of luxury housing.
The Prague Post: What interests you most about the Czech real estate industry?
Michal Štěpánek: It’s a bit like modeling work for me. It’s a way for me to develop my thoughts, and I love to work in the design industry with architects. I’m an artist, so to watch something develop and be built is my way of achieving something and giving something back to people that they may like.
TPP: You’re also a professional photographer. How has that influenced your work in real estate?
MS: Being a photographer was my first job. I take a lot of photographs that are used in advertisements. In a way, it was advertising that eventually led me to real estate.
TPP: What’s the main goal of Michael Development?
MS: The main goal is the satisfaction of our clients. If they’re happy about our work and their style of living, we’re also happy. That’s the nature of our business, really. Also, our projects must offer us something on the architectural side. Each building must serve some other purpose. Each project is important for us. Our motto in Czech is: “Security.” It doesn’t mean much when translated, but in Czech it’s pretty straightforward. I think the idea of security describes our goal very clearly.  
TPP: What’s the most enjoyable part of your job?
MS: First, I’d say it’s the creativity of the projects ... if the project looks good. Of course, the financial success of each project is also important. The financial success of each project is the best measurement of a project’s quality. It ensures that clients will continue to come to us with some level of confidence.
TPP: What’s the least enjoyable part of your job?
MS: (laughs) Working with people! Many different people work on each project, from architects to builders, and every minute of every day you’re required to be solving problems. Every minute brings a new, different problem with a project’s details.
TPP: How do you think that the Czech real estate market will change in five years’ time?
MS: It depends on the strength of the crown. It depends on what types of mortgages banks will be offering at that time. They say the residential boom of the current market will last for about five years, but I don’t believe that. I predict it will last about two to three years, and then the boom will finish. Of course, we will find a way to work with it. It’s hard to forecast how it will look, but I’m sure that the boom will finish earlier than most people think. But I don’t think that the change will be as dramatic as people think. In some ways, the Czech Republic is still 40 years behind parts of Western Europe, so we’ve got a lot of work to do.
TPP: How will the work of Michael Development change as a result of this?
MS: We’ll have to find a way to survive as a company, and if we don’t succeed, we’ll just have to go out of business (laughs). We’ll just work as hard as possible and sustain this type of business as long as possible. It’s definitely going to get harder as there will be fewer interesting places and fewer interesting projects in Prague at that time. In a couple years, there will be a lot of new development projects that are really large. But we prefer smaller, more luxurious projects, even though they’re a little bit more financially risky sometimes.
TPP: What sets Michael Development apart from its competitors in Czech real estate?
MS: We always try to be the best at what we do, and to provide the most luxurious projects. But that’s something the market’s eventually going to decide. The future will show what our projects mean for the city and for the people.
TPP: Is Michael Development hoping to expand to new areas and new countries?
MS: We’re currently thinking about some large family-style projects on the Istrian Peninsula in Croatia. Our colleagues are learning about that market right now. We may go for it, we may not ... but we don’t know yet.
TPP: What advice would you give to someone who was interested in Czech real estate development?  
MS: I would tell them not to do it because I don’t want any more competitors! Everybody still has a chance. There are still plenty of opportunities for people who have new and interesting ideas. Everyone has a chance, but you have to have a specialty and be good at what you do. This business depends on knowledge of conditions in the Czech market. People here are often very conservative, and they are often afraid to accept something new and innovative. If you want to offer something that’s progressive and brand new, people here are often very afraid of it. We’d probably build different types of buildings than we do now, we’d like to be more progressive. In Prague, you won’t find many progressive residential projects. But I think things will get better soon. Success brings progress.

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


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