18th December 2019

Good subpages and market stagnation will not fundamentally hurt, and real estate in it retains its value in the long run

Good subpages and market stagnation will not fundamentally hurt, and real estate in it retains its value in the long run

Michal Vičan, the company's project manager, told us about Bratislava, the “Pod Vinicou” project, the beginnings of the development activities of the Arca Capital financial group, but also about the development of real estate prices.

When did Arca Capital become an active developer?

The beginnings of our activity in this segment date back to the period 2004-2006, when we built a technical infrastructure on land for future family houses in Liptovský Mikuláš and entering the realization of the Lightpark furniture department store on Račianská Street in Bratislava.

Do you operate in several European markets, will it be the same in the real estate market?

We look for development opportunities mainly in Slovakia and the Czech Republic and primarily in their capitals. In 2017, for example, we completed 119 residential and non-residential units in Brno. We are currently implementing the reconstruction of the original buildings and the construction of new apartment houses in Prague, as well as a hotel in Františkovy Lázně. We also have real estate opportunities in Budapest. In the industry and logistics segment, we currently operate in Poland in addition to Slovakia.

Your first Bratislava project was the "Pod Vinicou" project, how long did you prepare it?

The "Pod Vinicou" project was created by combining two construction projects: the "White Cross" and the "New Vineyards". We have been dedicated to it since 2016. Together with the architects, we have partially adjusted the layout of the apartments to meet the current standard and light technical requirements.

The project has been on sale for almost a year now, half of the apartments have been sold successfully, and prices have risen several times. What were your assumptions?

Changes in offer prices result from the choice of a quality standard of equipment for apartments, houses themselves, adjacent land, gardens and its procurement. We will see the evaluation of whether we have correctly hit the target group and the market requirements before the sale of the last apartment.

In your opinion, what is the success factor that distinguishes the “Pod Vinicou” project from similar projects?

It is probably too early to talk about success. In my opinion, the demand and the concluded contracts with clients reflect the acceptable location, urbanism and partial chamberiness of the project in the form of separate buildings with a lower number of apartments in individual villas.

How do you perceive the residential market in Bratislava?

Many investors, interesting mortgages, job opportunities, not only in Bratislava but also in affordable Vienna, the preference of ownership over rent, given that the amount of rent is often at the level of mortgage repayment and perhaps not quite clear goals and procedures of the city.

Where do you expect prices to rise?

Hard to say. Certainly location and security of income are what allow prices to rise. To this I would add the individual preferences of buyers and the currently low offer of competitors in the given location. The difficulty of acquiring real estate and the relevant permits are also key factors in rising prices. We must not forget the scarcity and cost of human labor in construction. However, even a stagnation of the market will not fundamentally hurt a good location, and at the same time real estate will retain its value in a good location.

Which segment do you plan to focus on within the development?

Currently, Arca Capital is preparing plans in the total volume of approximately 1,200 apartments and 30,000 m2 of office space, mainly in Bratislava. We also plan to solve the premises for our own activities due to the growth of the company. We want to provide the necessary comfort to our employees and subsidiaries. In our portfolio we have the recreational and sports complex GOTHAL in Liptovská Osada. We are currently preparing industrial parks in Slovakia and Poland. It will be 8 hectares in Katowice and 22 hectares in Topoľčany.

What perspective do you think Bratislava as a city has?

Bratislava will still be developing. What pace and direction is still questionable. The rules and conditions of the currently valid zoning plan are not clear. Given the size of the landscape and the emphasis on the protection of soil and forests, I am certainly a supporter of urban high-rise development, ie thickening. If Bratislava wants to be a modern and functional city and at the same time be a place for a good life and work, it must take over. I would also perceive the attractiveness of the capital in terms of its uniqueness and uniqueness.

What risks do you perceive that have affected the positive development of the real estate market so far?

Probably what was here in the period 2007-2010. Sudden economic crisis, uncertainty of long-term income. On the other hand, although I also perceive the acceleration of permitting processes less real than risk, clear and comprehensible regulations of the zoning plan, which is related to a higher offer of competing products.

If you were buying an apartment today, where would you buy it?

I personally am the type for family living - a yard with a garden and a dog. I prefer more privacy and good neighbors. If it were an apartment, at present I would prefer the left bank of the Danube, with access to the Bratislava bypass towards Trnava. However, this may change the completion of the Bratislava Bypass D4R7.