Central Group has withdrawn from the construction of apartments in Nusle

Prague - According to today's E15 newspaper, Central Group has withdrawn from the construction of apartments in the area of the former dairy in Nusle, Prague, due to unfavorable conditions. The developer initially wanted to build 200 luxury apartments on the brownfield site. Central Group was supposed to pay the owners, the company Nuselská cz, 177 million crowns for the land, which spans over 7500 square meters, E15 reports.
   "After evaluating the project, we decided to withdraw from the contract," quotes E15 Chairman Dušan Kunovský.
    For Central Group, the Nuselská dairy was to be the first redevelopment of a former industrial site. The company announced the purchase of the complex in Nusle last autumn. At that time, they estimated the total investment costs at 800 million crowns. "We want to focus on developing other parcels and brownfields with a higher number of apartments. The Nuselská dairy was too small a project for us," Kunovský commented on the current decision.
    The developer does not wish to discuss other reasons. The costs of cleaning and revitalizing the entire complex would likely make the intended project disproportionately more expensive. "The decision to purchase a brownfield mainly depends on location, acquisition costs, ecological burden, and the usability of the area associated with the future returns of the property. There are not many buildings that meet all these characteristics, which would be advantageous for developers," said Jiří Volf from the investment team of the consulting firm King Sturge to E15.
    Since last autumn, property prices have also changed in some locations. "In the last two quarters, we can observe a slight decrease in some cases. Sellers had to reassess often unrealistic price expectations that persisted from the investment boom in 2007," Volf added.
    However, the experience with the Nuselská dairy has not deterred Central Group from possible construction in former industrial areas. "We want to engage with brownfields; we see great potential in them. Their revitalization does not have as many opponents as building on greenfield sites," Kunovský told the newspaper. His company is currently negotiating the purchase of land in Prague's Vysočany, E15 adds.