Prague is embarking on a major urban transformation backed by billionaire investors, with plans to convert former railway yards and industrial sites into residential districts, parks and commercial spaces as the Czech capital struggles to meet housing demand.
The projects, expected to reshape parts of the city over the next two decades, represent one of Prague’s most significant redevelopment efforts since the end of communist rule. The investment is estimated at more than $10 billion, with major schemes planned in areas including Bubny-Zátory in the north and Smíchov in the southwest.
The push comes as the Czech economy grows and demand for housing in Prague remains strong. The city currently adds around 5,000 homes a year, roughly half the number its Institute of Planning and Development estimates is needed.
A revised planning framework that took effect in September is intended to accelerate development on former industrial land, particularly in areas with good public transport links. The Metropolitan Plan also aims to limit urban sprawl and protect established neighbourhoods, while retaining restrictions on high-rise construction in much of the city.
Prague’s redevelopment has been slowed for decades by complicated planning rules, disputes over land ownership and lengthy permitting procedures. The legacy of communist rule and the transition to democracy made it difficult to return property to former owners, while the city’s historic architecture has encouraged a cautious approach to large-scale construction.
Billionaires back major redevelopment projects
One of the largest schemes is planned for Bubny, where a disused railway yard is set to become a district for more than 20,000 people. The estimated $4.2 billion project includes housing, a park and a proposed new home for the Czech Philharmonic.
The investment group AKIPIA, backed by Czech billionaire Michal Strnad, is among the investors involved. Penta Investments, led by Marek Dospiva, has also taken a leading role in the development.
The area has remained largely underused for decades, with plans for redevelopment repeatedly delayed by fragmented ownership and disagreements over its future. Nearby, a former railway station is being converted into a Holocaust memorial. The station was used to deport tens of thousands of Jews and others persecuted by the Nazis.
Penta is also preparing Florenc21, a project worth around 20 billion koruna ($920 million) that aims to transform an underused area around a major transport hub into a greener, more pedestrian-friendly neighbourhood.
In Smíchov, a former freight yard is being redeveloped into a mixed-use district featuring apartments, offices, shops, cafés and a landscaped boulevard. The project is expected to be completed by the mid-2030s.
Sekyra Group, owned by billionaire Luděk Sekyra, is behind the development. Company executives say the project took years to advance because of the Czech market’s complex legislation and permitting process.
The group is also involved in projects around the Vltava River and in Žižkov, an eastern Prague district known for its more alternative character.
Housing affordability remains a concern
Despite the scale of investment, the new planning framework does not require developers to reserve a fixed proportion of homes for affordable housing. Instead, it seeks to increase supply by making more land available for construction.
That approach leaves questions about whether the new developments will ease the affordability crisis. A Kantar survey cited by Czech public broadcaster ČT in October found that around 77% of Prague residents considered the shortage of affordable homes to buy or rent a major problem.
City officials say agreements with developers can help ensure that new neighbourhoods are accompanied by investment in public infrastructure, including schools, parks, roads and other services.
Deputy mayor Petr Hlaváček, who oversees spatial and strategic development, has called for closer coordination between investors and public authorities. He has also argued that Prague needs more small and medium-sized developers rather than relying heavily on large corporate groups.
Urban experts, meanwhile, warn that rapid redevelopment could put additional pressure on transport networks, public services and existing communities. Some have also questioned whether private developers have too much influence over the city’s future.
For now, the Metropolitan Plan marks a shift towards more flexible development rules. Supporters say it gives Prague a clearer framework for addressing its housing shortage, while critics caution that increasing construction alone may not guarantee homes that ordinary residents can afford.
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