Čtvrtek 28. března 2024, svátek má Soňa
130 let

Lidovky.cz

‘No retreat’ of Irish developers in Prague

  11:35

The Irish banking crisis may get the headlines, but the fortunes of Irish developers here differ little from those of their EU counterparts

Avestus Explora in Prague 5 foto: © AVESTUSČeská pozice

International coverage of the Irish banking crisis and its connection to the burst property bubble has led to some local questions about the financial stability of Irish developers active in the Czech Republic. Recent reports in some Central European media have attempted to make breaking news out of the consequences of a crisis that has entered its third year.

“I don’t think it’s a problem unique to Irish developers. It’s a problem for any developers with large-scale developments that need financing,” said Richard Curran, managing director at CB Richard Ellis in Prague, citing developers such as Prague-listed Orco Property Group, Sekyra Group and ING as among a number of developers of large projects in the region that have hit a wall over the past few years.

“Obviously, the Irish banks are closed for lending, but that’s true of a lot of banks. The Irish case is just more public. There is a lack of bank financing and it’s a question of what alternate form of financing they are looking to get,” Curran said.

The financial conditions of working out alternate financing as well as giving up a certain measure of control over a project in which a lot of time and money has been invested has proven to be a sticking point for developers. For some though, as financing comes due, they have less and less of a choice in the matter.Red Group is among the Irish developers now shoring up its position by negotiating with an equity group

Situations vary among Irish developers active in the Czech Republic. Ballymore — being financed by the troubled Anglo Irish Bank and Bank of Ireland, as well as involved in its controversial development project on Wenceslas Square — has been pointed to as being in particular difficulties. “There are equity investors coming, but developers have to change their attitudes; it depends on the terms,” Curran said.

Red Group is among the Irish developers now shoring up its position by negotiating with an equity group; the company is in advanced talks with Heitman to secure development finance for its mixed-use Waltrovka project. Red Group declined to comment for this article.

Another Irish developer that by all indications is in good shape is the Avestus Group. Unwilling to comment on any other Irish developers, Avestus CEO Roger Dunlop acknowledged that the company’s plans, particularly in the Czech Republic, have been affected by the financial crisis. Nevertheless, he maintains that plans are moving forward and that Avestus will be a long-term presence on the market.

“We continue to be committed to the Czech market, we have the capital available to realize the schemes we have invested in and remain focused on the delivery of the schemes we have invested in,” Dunlop said adding that it is a certainty that these projects will take longer than originally anticipated, as a result of the economic environment.

“Our intentions, investment decisions and timing of developments are linked to the activity levels in the local market and the opportunities that this offers,” he said.

 

Autor: