At a time when more and more people are complaining about the “un-Christian” prices of apartments due to insufficient supply, a powerful buyer – the Roman Catholic Church – is starting to buy up entire apartment buildings in large quantities in Prague. The Archdiocese of Prague, through its company XPlace, will purchase over 400 apartments for four billion crowns by 2025 alone. According to information, e15 is currently concluding cooperation with the largest developers on the market. It has currently negotiated a partnership with billionaire Marko Dospiva, specifically Penta Real Estate. It will build two rental apartment buildings with 54 apartments for XPlace in the new city district of Waltrovka in Prague 5. However, it does not end there.
“For us, the partnership represents an excellent opportunity to expand our portfolio of rental housing and provide tenants with a wide range of housing that reflects modern needs and ideas,” explains Linda Dolečková, economist of the Prague Archbishopric.
In addition, the words of Penta managers indicate that the cooperation between the developer and the church will not end with the construction of two apartment buildings. “I believe that we have just started a long-term partnership and we will also embark on other residential or socially oriented projects together. We have already sold almost 800 apartments in the popular Waltrovka location. I am sure that the new tenants will also have a good time here,” says Penta Real Estate Deputy General Manager David Musil.
The company XPlace, which is supported by the capital of the Archdiocese of Prague, will buy two apartment buildings in the new district of Waltrovka from Penta Real Estate. | Penta Real Estate
The Penta Group is one of the largest developers in Prague, but it is also the largest operator of so-called “residential social services” in the Czech Republic, in practice this means that it manages 31 homes for people with Alzheimer’s disease. The head of the real estate division, Petr Palička, said in an interview for e15 some time ago that Penta is considering building more centers directly.
A welcome boost, but also a risk
Penta is not the only company with which the church establishes cooperation. XPlace also entered into a partnership with developers Finep, Trigema and VPP Group. Some apartments were given to the archdiocese in exchange for land that it could not use on its own. In this way, it acquired a hundred apartments in Zličín and Střížkov from the largest developer, Central Group.
For developers, the sudden interest of the church at the moment is literally a godsend. Due to high mortgage rates, the demand for apartments has cooled significantly in the last year and a half, and sales almost froze. However, in the future, when the rates will fall again, the mass purchases of the church can be a new strong impulse for heating up the Prague real estate market again. There is a long-term shortage of new apartments being built in the metropolis, which caused a sharp rise in prices in the last decade. In an environment of lower rates, these could begin to rise again with the contribution of the church.
With investments, the church is preparing for the year 2030, when it will stop receiving money from the state, which it uses for its operation. In the next decade, rental housing is therefore to form one of its key income-generating activities, alongside forestry. Until 2042, the church will then receive financial compensation for the properties that it could not obtain in restitution. “The funds we receive as compensation must be invested wisely in order to be able to finance the operation,” Prague Archbishop Jan Graubner said in mid-January when he blessed the 38 apartments the church had acquired there in Milovice, Nymburk.
XPlace, which is supported by the capital of the Archbishopric of Prague, currently owns 150 apartments that it rents out in Prague and the surrounding area. Another 114 apartments will be added in the first half of 2024 alone, and up to 566 apartments will be offered by the end of 2025.
Last year, revenues from rental housing under the XPlace brand amounted to more than 21 million crowns.
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