Flat developers snap up big bakery site
The developer plans to pull down the existing buildings that have been the scene of bakery production for more than 40 years. The demolition will create a brownfield of about four hectares. It will be transformed into a new residential quarter with hundreds of flats.
“From our development point of view, the brownfield will represent an attractive location within the wider city centre. We are confident that our revitalisation of the location will produce a residential quarter that seamlessly supplements the existing development,” Naďa Ptáčková, the CEO of Skanska Reality, told E15 daily.
The planned change of use certainly does not spell the end of operations for baker Jiří Abraham. “For example, the production of our ever so popular Metro Dezert and extruded crisps will be relocated by our subsidiary Michelské pekárny Premium from the Michle facility to one in northern Bohemia where production can continue,” said Jiřina Alexandrová, the Deputy CEO of Michelské pekárny.
The second Prague development acquisition
The acquisition of the Michle district property is the second Prague development acquisition on such a scale for the residential branch of the Swedish construction giant Skanska. The developer has recently also acquired a plot in the Karlín quarter that is big enough for more than 500 residential units. While there is as yet no artist’s impression of the future Michle residential project or a date specified for breaking ground, the Karlín project is already as good as set in stone. “The development plan is
to market the first stage of the River Gardens East project at the end of 2015 and early 2016,” said Ptáčková.
Big developers are currently upping their acquisition activity in line with the market revival seen in recent months. Ekospol, for example, has acquired a project in Hostivař to build more than 800 flats. The Czech branch of the Finnish YIT Group, meanwhile, has acquired a brownfield site on the boundary between the city quarters of Vysočany and Hloubětín.
On the cards for quite some time
The sale of the Michle facility had been on the cards for quite some time. Michelské pekárny has been through a considerable restructuring in recent years and it has decided to focus on its specialised products given strong market competition. Low prices have long kept the company in the red.
As stated in the company’s annual report, it has been forced to discontinue its programme of “regular everyday bakery production”. According to the latest available company financial information, Michelské pekárny’s annual revenues exceed CZK 200m.
The bakery group consists of several subsidiaries, which Michelské pekárny has lately split off to reduce risks and
simplify the sale of redundant assets. The latest known consolidated assets for the holding have a combined value of approximately CZK 316m.