The limited offer of open space for business development and the growing demands on preparing greenfields are increasingly turning the attention of investors toward former industrial buildings and abandoned military and agricultural grounds. We talked about investments in brownfields with Jiří Bureš from the CzechInvest agency.
How long have projects involving brownfields and investments in them been pursued in the country?
If we take into consideration the broader historical context, we have been involved in the regeneration of industrial buildings for ages. For example, we could mention the great Prague renewal at the turn of the 20th century, when entire city quarters were rebuilt, including part of the Old Town. But we’ve been working with brownfields as we view them today since the 1990s, i.e. since the time the Czech Republic faced the task of a major industrial restructuring and the related reconstruction of unused grounds.
Investments in brownfields are therefore a post-revolution phenomenon?
Yes. Similar renewal projects occurred earlier elsewhere in the world, and were already being pursued on a large scale in the 1960s.
Are our brownfields somehow unique as a result?
I wouldn’t say they are different because of the time delay. It’s more that they reflect pre-revolution composition of industry. Many brownfields are created on former mining land, while some are former military grounds or large agricultural compounds.
What are the advantages and disadvantages of brownfields in connection with investors?
A great advantage of brownfields is their location. They are often located in the built-up parts of towns with good transport access and infrastructure and hence offer investors the possibility of a very good return on their money. Their large size is also often attractive, especially in the case of former military grounds. The most successful brownfield revitalisation projects have occurred at former airports such as Borská Field in Plzeň and Triangle in Žatec. And yet, each brownfield is an individual case. For example, there are complexes with heavy environmental burdens that are complicated to invest in without subsidies for clean-up.
Does the state have a comprehensive strategy for the revitalisation of brownfields and investment in them?
The Czech Republic has a National Brownfield Regeneration Strategy, to which CzechInvest has been a long-term contributor. The document covers all concepts of state support and grant programmes up until 2015, and an updated Strategy is currently being prepared.
Who is the grant programme targeted toward?
It is aimed at towns, regions and other public subjects. CzechInvest administers two programmes: The Programme for Support of Business Real Estate and Infrastructure and the Programme for the Regeneration and Business Utilisation of Brownfields. The second one is relatively new; launched in 2017, it focusses on three structurally challenged regions – the Moravia-Silesian, Karlovy Vary and Ústí nad Labem regions, as well as on other economically disadvantaged parts of the country. In the future, we would like to expand it to the entire Czech Republic.
Are there also state programmes targeted at investors?
State support cannot be provided to entrepreneurs and investors. They can, however, turn to EU programmes such as the Operational Programme for Enterprise and Innovation for Competitiveness, which includes a direct call for real estate reconstruction.
Do the aforementioned programmes include a database of the brownfields that CzechInvest administers?
The list is partially connected to them. The actual national strategy was created after Hyundai entered the Czech Republic. At that time, the state undertook in a memorandum to make large investments of this type at brownfield sites. At the same time, a search study was launched, with the result being the national brownfield database.
An information portal and national database of brownfields that lists selected sites and provides an overview of the number, character and development of brownfields in the Czech Republic. The public part of the database serves as an offer of sites for investors.
How big is the database and how can it be used?
The database has two components. The non-public part is primarily for statistical purposes; it is used by us or other public subjects which, for example, prepare grant programmes and need specific data about brownfields in the Czech Republic. The public part available at brownfieldy.eu includes roughly 450 sites with all available information. It can be viewed by anyone.
What type of brownfields attracts the greatest interest of investors?
In our experience, the location and difficulty of site regeneration play the biggest role. Hence, the greatest interest is logically in buildings in the built-up parts of towns connected to a motorway, with good utilities and without any ecologically demanding operation.
What does the future hold? Will interest in Brownfields increase?
We see a lack of free space in the Czech Republic for further business development, and the preparation of greenfields is much more difficult today than in the past. We therefore think interest in brownfields will continue to increase, especially at locations where the demand hasn’t been so high thus far. For example, in former industrial compounds in smaller district towns or in towns away from the motorway network.
Are there enough brownfields in the country to satisfy the demand?
That’s hard to say, of course, but I think so. As I’ve already said, there are currently about 450 sites in the database, and in the non-public part there are many more, roughly 3,500. These are brownfields with certain complications, e.g. ownership disputes, ecological burdens and the like. I think that the heightened interest will cause developers to look at them as well. From the investment perspective, brownfields are certainly very interesting. For anyone interested in a comprehensive view of this issue, I would recommend visiting our website at brownfieldy.eu, where they can find all information clearly presented, including a link to the national database.
A state-funded organisation operating under the Ministry of Industry and Trade. The aim of the organisation is to support small and medium-sized enterprises, business infrastructure and to obtain direct foreign investment in the field of production, strategic services and technological centres. CzechInvest also supports enterprise in the processing industry and performs activities connected with the preparation, declaration and administration of projects supported from EU funds and the state budget.