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Czech Regions & Cities reflects positively on this year's Expo Real

The 20th Expo Rea closed in the New Munich Trade Fair Centre on Friday 6th October. Trends and predictions from real estate experts: the European property market will continue to thrive, regardless of Brexit and the current political and economic uncertainty. An increasingly important role will be played by digitization and innovation. The boom of the housing market will continue thanks to low mortgage interest and a large volume of investment capital, along with projects aimed at health/social care and logistics to be added as prospective real estate segments. Germany and the CEE countries are still popular among investors; the Czech Republic has held the position of the region's prime investment destination in commercial real estate. Aside from their investment visions and projects, the Czech cities and regions have focused on presenting their innovation potential, which increases their competitiveness.

Participants from the Czech Republic regard the event as an extremely attractive forum for presentation and networking thanks to its venue and the high numbers of important investors in attendance. Following the successful joint presentation of Czech municipalities at Mipim, staged in Cannes this spring, a similarly arranged exhibition Czech Regions & Cities also opened at this year's Expo Real. It was shared by the Moravian-Silesian and South Moravian regions, the cities of Ostrava and Brno, CzechInvest, the Association for Foreign Investment (AFI) and 10 co-exhibiting commercial companies. Tomáš Macura, Mayor of the City of Ostrava, which coordinated the joint exhibition, said: “It turns out that it pays to follow the example of other European cities and regions that have a joint exhibition. And not only in terms of lower financial costs associated with the presentation, but mainly because we are reaching out to investors in synergy. Incidentally, we differ from Brno also owing to the historical development of both cities, so we do not compete with each other. The same is true of the Moravian-Silesian and South Moravian regions. That is why we have managed to attract much more people by the joint exhibition than we did in the past years.” Data provided by Messe München indicate that the Czech Republic is eighth in the number of participants, behind Germany, the United Kingdom, the Netherlands, Austria, Switzerland, Poland and France; the last of the top ten countries are the USA and Luxemburg.

Ostrava: Areas inside the city as well as Hrusov Development Zone
During this year´s absence of Prague, it is solely Ostrava that has been presenting its potential at the event continually (for the sixteenth times in a row this year), which demonstrates the city´s well-thought approach to investors. Ostrava formerly attracted investors to arrive at industrial zones, which has been changing, according to Mayor Tomáš Macura, in recent two years since those zones were almost filled to capacity. This explains why the city decided to offer attractive areas in the historical core at Expo Real: Karolina, Černá louka and a gap site adjacent to the western side of Masaryk Square, where opportunities for residential and leisure projects exist. The city intends to facilitate close cooperation with the private sector on the development of larger-sized areas. An example given by Mayor Tomáš Macura is an area presented at Expo Real for the first time: Hrušov Development Area. This brownfield site is intended for light industry and logistics complexes. The city has recently invited calls for investment bids for the property. “We have already made basic preparations - we have bought the land and combined the lots. We have put them out to tender from private entities so that they can complete the preparation of the area and either lease or sell it to end users. At Expo Real, we had a number of meetings with prospective candidates. The fact that the city´s cooperation with private investors and developers can be very effective has already proved to us in other projects,” said Tomáš Macura.

Moravian-Silesian Region: Visionary Projects, in addition to industrial zones
In his comment on the Region´s motives for participation after a one-year pause, Deputy Governor Jan Krkoška said: “We have come to Munich to show our investors how our region is changing. We are also committed to building and offering industrial zones even in the future, especially in the areas with high unemployment rates, e.g. Karviná or Krnov, which can be exemplified by the second stage of Industrial Zone Krnov-Červený dvůr. However, in today's highly competitive labour market, it is also necessary to provide newcomers to the region with high-quality facilities and infrastructure for their employees. That is why we have also presented a residential project in the former Dukelské Barracks or a visionary project for the Slezská Harta resort near the dam of the same name, which compares with Lipno in the Šumava mountains. At the fair, we were looking for private investors to develop this area for tourism and leisure activities of current residents and new arrivals in the region. We are aware that investors are now heading for cheap labour to Eastern Europe, and the path to the Moravian-Silesian Region´s competitiveness lies in the further development of our potential for innovation.”

Brno: Revitalization of large city areas
Brno has returned to Brno after several years. Mayor Petr Vokřál said in his comment on the city´s presentation: “We also hear from investors more and more frequently that, rather than just looking for land for construction and investment incentives, they are interested in environment for a pleasant life. That is why we have primarily offered them a revitalized Ponava site, where we focused on three major sports venues: a football stadium, a multipurpose hockey hall and an aquapark. At the same time, we consider housing and shops. Another big planned project is the future revival of the BVV Trade Fairs Brno. Given the fact that it has been acquired by the city and an international architectural competition is underway, we also discussed with interested parties about how to integrate the entire area more closely into the life of the city and ensure that it is not only used for holding exhibitions. We would like to cooperate with the private sector on the implementation of major projects of this type and create conditions for commercial investors to meet not only their economic expectations, but also to fit their projects into the city concept and to benefit all the inhabitants. The fair and the presentation of a number of European cities have also been an inspiration for us this year, how to work best with the public space which is often created by details.”

South-Moravian Region: The development of new projects creating vacancies in smaller regional towns
Like Brno, the South-Moravian Region has also returned to Expo Real after several years. “Investors have been offered opportunities in less populated locations in the region - the industrial zone of Kollárova-Blatnická in Veselí nad Moravou or the Blučina industrial zone. Our goal is to bring new medium-sized companies with 50-150 employees to create new job opportunities for locals. The new vacancies offered by companies coming to the brownfield sites in smaller regional towns are also intended to help Brno as the number of commuters to this metropolis will be significantly reduced; today it's about 100,000 people a day. In view of this, we cooperate very closely with Brno in the development of such investment opportunities. For new employees and current inhabitants in the region, we are also preparing projects for housing and civic amenities, including leisure activities. Two of them – the site of the old hospital in Znojmo and the development area of Znojmo-Malá Louka – have been also presented at Expo Real,” said Bohumil Šimek, Governor of the South-Moravian Region.

This year´s investment volume to break a record again
The rapid growth in domestic economy, which, according to expert predictions, will continue next year, high return on investment, economic and political stability of the country and its security – all of these are reasons why the Czech Republic is considered as the prime investment destination of the CEE region, considering the volume of investment in commercial properties. It even overtook Poland, which was previously Number One, in the first six months of 2017, and this year´s total investment volumes in commercial properties are estimated to exceed €3 billion, says Cushman & Wakefield.

Innovation as a path to competitiveness
An important role in drawing investors´ attention to the Czech cities and regions in the highly competitive market of European capitals is innovation. Every year, the World Economic Forum (WEF) publishes the (Global Competitiveness Report), which serves as a guideline for investors. According to its latest volume, the Czech Republic ranks among 36 countries whose economy is driven by innovation, leaving behind other Central European countries, and in total it ranks 31st out of 138 world economies in the assessment of 12 competitiveness criteria. Nevertheless, it is below European average in the assessment of the „innovation“ criterion, where it received four points out of seven. That is why Brno, Ostrava, South Moravia and the Moravian-Silesian region came to Expo Real to demonstrate a high level of support for innovative processes that increase the competitiveness and living standards of locals, aside from presenting their investment visions and projects. Pavel Csank, CEO of the Moravian-Silesian Innovation Centre for the entire Moravia, in his presentation to prospective investors said: “The key is to send investors a signal that, in addition to offering areas suitable for construction, we also rank among the fastest growing ecosystems in Europe. There are not many regions that compare to Morava in the number of global companies running their research and development centres there. In total, there are over 40 of them now, including Siemens, Honeywell, Thermo Fisher Scientific, SAP, Avast / AVG and Tieto. Moravia can offer them a skilled workforce: more than 100,000 students are trained at over ten universities, with one third in technical fields”. What demonstrates that Moravian cities and regions follow the latest trends in presenting their innovation potential is that „innovation“ was one of the key topics of the 20th Expo Real. This year has seen the very first Forum for Real Estate Innovation Network (REIN), where experts discussed the progress of digitization in the real estate market. The talk was about linking innovative start-ups with renowned real estate firms, or how innovation is reflected in the most dynamically developing segments of the real estate market, such as industrial and logistics real estate. The practical need for innovations in the form of automation or robotization during the construction of logistics and industrial facilities was confirmed by Tomáš Míček, Director of P3 Logistic Parks Czech Republic. “Given the current availability of a workforce, this is one of the most crucial things for our tenants. It is widely known that the unemployment rate is at a record low level in the Czech Republic, and in some localities, it is not really easy to find necessary employees even for qualified professions. The maximum degree of automation in logistics and production halls is a path leading to a long-term, economically viable solution.”