February

Ostrava-Mošnov Strategic Industrial Zone

Ostrava is the third largest city in the Czech Republic with 311 000 inhabitants. It is also the capital of the Moravian-Silesian Region, with over 1.2 million people. Ostrava occupies a strategic location at the meeting point of three countries – the Czech Republic, Poland and Slovakia. Around 5 million people live within a 100-kilometre radius of the city, making this catchment area one of the most densely populated parts of the European Union. As well as having a highly skilled workforce, this strategic geographical position – plus the lack of a significant language barrier between speakers of Czech, Slovak and Polish – means that the Moravian-Silesian Region has much higher employee mobility than most other EU regions. This is one of the reasons why investors have flocked to a region which offers all the necessary conditions for successful investment – a skilled and highly qualified population, a wide range of investment opportunities, and a excellent range of leisure activities.

In the past, Ostrava suffered high rates of unemployment, which reached almost 20 % in 2004. Since then, however, the city has achieved a dramatic reduction in joblessness – largely thanks to the newly established industrial zones at Hrabová and Mošnov. By 2008, Ostrava’s unemployment rate had fallen to just 8% (now it is 12%).

The Ostrava-Mošnov Strategic Industrial Zone (SIZ) covers an area of 200 hectares, making it one of the largest industrial zones in the Czech Republic. The SIZ offers unique opportunities to investors seeking to take advantage of its strategic position near to the city’s international airport and with good access to main roads and the railway network. The SIZ Ostrava-Mošnov is open to a wide range of commercial activities, all united by their modern, export-driven approach and their focus on advanced technologies. The SIZ particularly welcomes companies that work closely alongside local producers, service providers and suppliers.

The zone is currently home to Behr Ostrava, Plakor Czech, Cromodora Wheels, Free Zone Ostrava and HB Reavis Group. Since 2004 these companies have invested 6.412 million CZK (262 million EUR), creating 1.186 jobs. A further 1.240 jobs will be generated during this year. All key infrastructure for new investors is already in place at the zone.

Investors have recently been showing increased interest in the Ostrava-Mošnov Strategic Industrial Zone, attracted by the excellent infrastructure and competitive land prices. Currently the City of Ostrava can offer around 85 hectares of available space, of which 45 hectares have been set aside for a major strategic investor. Situated on level ground, the zone offers a complete range of key infrastructure: water supply, gas, electricity, surface drainage and sewers.

Immediately adjacent to the SIZ is a Business Zone (30 hectares) with premises for SMEs (small and medium enterprises) including office space. Another key project in the area is the Multimodal Logistics Centre, which is scheduled for completion in 2016. The investor, HB Reavis Group, has committed 2.5 billion CZK to the Multimodal Logistics Centre, which will provide a nationally unique logistics hub combining road, air and rail cargo facilities.

In 2007 the Ostrava-Mošnov SIZ won third prize at the Czech Business Property of the Year Awards in the category ‘Industrial Zone with the Greatest Economic Benefit’.

City of Ostrava achieves historic credit rating success

Despite the global economic crisis, the City of Ostrava achieved a historic success last year. The international rating agency Standard & Poor’s upped the City’s rating to an outstanding A/A-1 thanks to Ostrava’s long-term focus on the prudent management of its public finances.

Ostrava’s financial performance has been rated by the main agencies since 1996, but this is the first time that the City has achieved such an excellent result. Ostrava’s Mayor Petr Kajnar explains: “This rating represents a reward for the last four years of hard work, during which the City implemented a prudent budgetary policy. We have responded to the recession by keeping an even tighter rein on our public finances.”

Standard & Poor’s raised Ostrava’s rating for all the standard economic indicators applicable to large cities. In addition to the overall rating, which was increased from the previous A-, the City also achieved an improved score for liquidity – reflecting its ability to service its debts in CZK and foreign currencies. The Standard & Poor’s report states: “In our opinion Ostrava is in a very strong position. The decision of the rating committee reflects the flexibility of the City’s budgetary operations. The City management is focusing on economic development and improving quality of life.”

The City of Ostrava’s new rating is as follows:
- foreign currency, long-term rating: ‘A’, outlook stable (up from ‘A-’, outlook stable)
- foreign currency, short-term rating: ‘A-1’ (up from ‘A-2’)
- local currency, long-term rating: ‘A’, outlook stable (up from ‘A-’, outlook stable)
- local currency, short-term rating: ‘A-1’ (up from ‘A-2’)

Standard & Poor’s rated Ostrava’s outlook as stable, which means that the City is not under threat from excessive levels of debt, maintains its public finances in a healthy condition, and can continue to invest in planned development projects. Mayor Kajnar comments: “Thanks to this rating, the City is in a strong position when negotiating with banks. For Ostrava’s citizens, the score represents a guarantee that planned projects – such as the development of the ‘Black Meadow’ site in the city centre or the construction of a new football stadium – will be feasible in the future. The city will have no problems paying off any loans taken out to finance these projects.”

The rating gives an overall picture of the City’s credibility as a borrower, reflecting its ability to meet its obligations as a bond issuer and to pay off its loans – both capital and interest – in full and on time. The rating is based on a detailed audit of Ostrava’s budgetary finances, its financial strategies, current situation and future plans. It also takes into account a range of key factors, including the City’s main strengths and weaknesses. The rating awarded to Ostrava cannot be higher than the rating of the Czech Republic as a whole.

Standard & Poor’s was established in 1941. Besides its ratings business and other auditing activities, the agency also carries out economic research and surveys, draws up several S&P indexes, and is one of the world’s top providers of independent information on investing. Standard & Poor’s has branches in 23 countries and has a market share of around 40 percent.

New industrial zone springs up in Ostrava’s Hrušov district

The City of Ostrava is currently planning a new industrial zone in the Hrušov district. Formerly home to around 7 000 people, Hrušov fell into decline in the early 1990s as local heavy industries were closed down. The destructive floods of 1997 drove out the last remaining inhabitants, irreparably damaging what was left of the district’s housing stock. Hrušov had suffered from mining subsidence and the ground surface had sunk by 3–4 metres, making the area very prone to flooding from the nearby river.

The Hrušov development zone, located close to the D1 motorway, is now set to become a light industrial area providing much-needed facilities for investment. The zone will cover 40 hectares and will mainly be occupied by private companies. Ostrava’s Mayor Petr Kajnar expects the zone to generate around 2 000 new jobs. He explains: “The Hrušov plans also include an incubator for small start-up businesses and skilled tradesmen.” The project will be based on the same principles as the business incubator run by the VŠB-Technical University of Ostrava, which caters for small innovative companies.

However, the first priority is to prepare the site for future construction, and this includes carrying out extensive drainage work. This project is already underway, and when complete it will create a fully functional infrastructure for future investors. The core activity involves raising the ground level by 3.5 metres to compensate for the effects of mine subsidence. Engineers will use mining waste from the neighbouring slag heap, which belongs to the state-owned Diamo company; this will expand the usable surface area by around 5 hectares. The total cost of this project up to 2014 is 2.3 billion CZK.

In June 2010 the City of Ostrava applied for subsidy funding of 1.5 billion CZK. The subsidy application for the preparation of technical infrastructure and ground level raising was approved by an interdepartmental committee from the Ministry of Industry and Trade. The remaining costs – covering the purchase of land, project documentation, other costs and VAT – will be funded from the City’s budget. The City has now submitted an application for an Environmental Impact Assessment (EIA) and documentation has been drawn up for the re-zoning process; when re-zoning has been approved, an application for building permission will be submitted. The City is also in discussions with the national energy utility ČEZ, because the electricity supply to the zone is insufficient and a new transformer station will have to be built. Clearance work at the site is scheduled to begin in early 2012. The zone should be ready for investors by the end of 2014 – including all infrastructure, energy supply and road access.

One of the main advantages of the Hrušov zone is the majority ownership of the land (51%) by the City of Ostrava. A further 12% is owned by the state. The second largest owner of land at the site is the property developer RPG (21%). The remaining 16% of the land is divided among several private owners. The City of Ostrava and RPG are currently involved in discussions on buying up the remaining land.

When complete, the Hrušov Development Zone will offer 40 hectares of industrial real estate, providing an excellent opportunity for small and medium enterprises (SMEs) currently suffering from a shortage of space in Ostrava’s existing industrial zones. Hrušov occupies a strategic location with excellent transport links to the D1 motorway and the railway mainlines to other Czech regions, Poland and Slovakia.

Nová Karolina Park will offer 25 000 m2 of high-quality office space

As part of the extensive New Karolina redevelopment project, a modern office centre – Nová Karolina Park – will be built in the very heart of Ostrava by the PASSERINVEST GROUP in conjunction with MULTI Development.

Nová Karolina Park brings together two worlds in perfect symbiosis, creating a bridge between Ostrava’s historical heritage and a fresh contemporary perspective on the modern architecture of the future. This core ideal is reflected in the concept of the entire building, with six upper floors offering 25 000 m² of top-quality office space plus a ground floor with 4 000 m² for retail, services, cafés and restaurants. In addition to attractive office space offering flexible partitioning solutions, the building will also have an underground car park with 280 spaces. Nová Karolina Park consists of two blocks facing onto a courtyard area with gardens, trees, benches and water features.

The Nová Karolina Park project is unique thanks to its location in the very heart of the city, where it forms a gateway between Ostrava’s historical centre and the new developments at the Karolina site. Nearby will be a commercial and entertainment complex with over 250 stores, a multiplex cinema, a fitness club, and a cultural and educational centre situated in a heritage-listed historical factory building.

The design for Nová Karolina Park came from the CMC architects studio headed by Vít Máslo and David R. Chisholm. It is located at the north-eastern corner of the newly developed Karolina site closest to Ostrava’s historical city centre, making it a symbolic gateway from the old city to the newly developed Karolina quarter.

For more information on the project, go to www.novakarolinapark.cz

CTP set to complete Tieto Tower

On Wednesday 2 February, the Dutch property developer CTP held a press conference at Ostrava City Hall presenting its plans to complete the project originally known as IQ Ostrava. The developer has succeeded in involving a key strategic partner – Tieto Czech, s.r.o.

Tieto Czech, a major provider of IT, R&D and consultancy services, has recently begun seeking a site for its new offices in Ostrava. Property developers in the city competed fiercely for this lucrative business. Marek Kurc from Tieto Czech explains the company’s eventual decision: “In the end, based on a thorough process of evaluation, we decided in favour of the CTP project at Náměstí Republiky in central Ostrava, because this project was the best in all respects.”

With the future lease agreement concluded, in the spring of this year CTP will begin work on two interconnected high-rise office buildings scheduled for completion in mid-2012. The complex will offer a total of 22 000 m² of office space, with Tieto Czech occupying 15 000 m². The taller building (50 metres high) will have 14 floors, and the lower building 9 floors. The complex will include restaurants, cafés, a fitness centre, underground parking, a viewing gallery and 5 000 m² of gardens. It will function in accordance with modern environmentally friendly principles, with BREEAM certification enabling the building to achieve excellent energy efficiency by making maximum use of natural light.

Tieto Czech has been based in Ostrava since 2004. The company chose Ostrava as its base for several reasons. The Moravian-Silesian Region has the second highest population of any Czech region (after Prague), and so it offers a large potential workforce. Another factor in the company’s decision was the presence of the VŠB-Technical University of Ostrava, an excellent source of high-quality graduates. Ostrava also offered a good commercial opportunity because the IT technologies market in the region was less saturated than in Prague. Tieto seized this opportunity, and the company has grown to become the largest IT sector employer in the Moravian-Silesian Region, with over 1 900 employees. Now Tieto is planning to concentrate all its activities at a single site, which also offers ample potential for further growth.

CTP has now obtained all necessary permits and can complete the building project, which will now be known as Tieto Tower. The building will cost 50 million EUR (around 1.2 billion CZK).

For more information go to www.ctp.eu and www.tieto.cz

Brembo chooses to invest in Ostrava

The Italian company Brembo has announced a major new investment in Ostrava. Brembo will commit over 35 million EUR to a factory producing brake discs and other aluminium components. The company will be based at CTPark Ostrava, run by CTP Invest at the Ostrava-Hrabová Industrial Zone.

Ostrava ’s Mayor Petr Kajnar gives more details: “Brembo first approached us about two years ago, but the decision-making process was delayed by the recession. The company was considering two industrial zones, at Hrabová and Mošnov. Eventually they decided on Hrabová. I’m delighted that investors are showing renewed interest in Ostrava after a difficult period. Brembo’s investment sends out a clear signal that the city is an excellent location for cutting-edge technologies. Another very positive aspect is that the investment will generate 446 new jobs within the next five years.”

The Italian company will invest in the Czech Republic via its Czech subsidiary Brembo Czech, s.r.o., which will launch its activities in 2011. The new production facility in Ostrava will cast, machine and assemble brake discs and other aluminium components, eventually growing into an integrated industrial complex capable of supplying quality hi-tech braking systems to the entire European market. The forecast turnover for Brembo Czech in 2014 is 55 million EUR (1.357 billion CZK).

Brembo is a global leader and innovator in braking systems and discs. The company is a major supplier to car, motorcycle and goods vehicle manufacturers, producing not only braking systems but also clutches, seats, safety belts and other components for motor racing. With customers including Audi, BMW, General Motors and Land Rover, Brembo has a clear focus on quality, and the company also supplies parts for Formula 1 cars. Brembo has 35 plants and sales operations in 14 countries across three continents. As of 31 December 2009 the company employed 5 417 people, of whom around 10 percent are engineers and specialists involved in research & development. The company’s turnover in 2009 was 825.9 million EUR (20.38 billion CZK).

For more information visit the company’s website at www.brembo.com.

Ostrava wins awards for best commercial property and manager of the year 2009

On 26 October 2010, Prague hosted the prize-giving ceremony for the prestigious Investor of the Year 2009 and Business Property of the Year 2009 awards. The awards were organized for the tenth time running by the CzechInvest business development agency and the Ministry of Industry and Trade in conjunction with the Association for Foreign Investment.

Ostrava achieved two outstanding successes: the award for Business Property of the Year 2009 went to CTPark Ostrava, while the award for Business Property Manager of the Year 2009 was received by the City of Ostrava’s Daniel Adamčík for his work at the Ostrava-Mošnov Industrial Zone.

CTPark Ostrava won the award for Business Property of the Year 2009 in the category ‘Zone of the Year’, having leased over 33 000 m² of commercial real estate to investors during 2009. CTPark Ostrava is part of the Ostrava-Hrabová Industrial Zone. Last year it attracted a range of new investors, including car parts manufacturers, cargo companies, IT service providers and financial consultants – all of which will generate over 800 new jobs. Remon Vos, General Manager of CTP, gives more details: “The biggest investment was for the American/Italian company ITT, for whom we built a new production facility covering around 23 000 m².” Runners-up behind CTPark in the same category were the Jaktáře Industrial Zone and the Liberec Business and Industrial Zone.

The title Business Property Manager of the Year 2009 went to Daniel Adamčík from the Economic Development Division of Ostrava City Authority for his work on the Ostrava-Mošnov Strategic Industrial Zone. Adamčík has managed the zone for six years, during which companies have invested over 6 billion CZK at the site. He explains how the zone has developed during that period: “Originally it covered 30 hectares. We then expanded it to 200 hectares in order to meet demand from Hyundai. When Hyundai eventually decided to set up its operations at Nošovice instead, we divided the zone into smaller sections.” Adamčík gives more details on recent priorities at the zone: “During 2009, the main focus at the Ostrava-Mošnov Strategic Industrial Zone was on completing the key infrastructure. However, we have also signed a contract to lease a 50-hectare site to a new investor, and we are working intensively on a project to create a rail link between the zone and the nearby Leoš Janáček Airport Ostrava. In the future we aim to attract at least one more major strategic investor, and we have set aside a 45-hectare site for them.”

Other awards for Ostrava went to Tieto Czech s. r. o. (3rd place in the IT and Strategic Services category), DinoPark Ostrava (3rd place, Brownfield of the Year), and the Business Incubator at the VŠB-Technical University of Ostrava (3rd place, High-Tech Property of the Year). The Incubator helps to nurture and support start-up companies with high innovation potential, offering excellent conditions for new businesses including direct links to the University’s staff and facilities.

The Investor of the Year 2009 awards went to the following companies: Honeywell for expanding its research and development centre in Brno; JOB AIR Painting for building an aircraft painting centre in the Moravian-Silesian Region; Atento Czech Republic for opening its contact centre in Brno; Agrostroj Pelhřimov for winning the contract to produce large professional brushcutters in conjunction with the Japanese Chikusui Canycom corporation.

Although the recession has forced investors to take a more cautious approach, last year the Czech Republic managed to attract almost 17 billion CZK of foreign investment, generating jobs for around 6 000 people.

For more information go to the CzechInvest agency’s website at www.czechinvest.org

Ostrava to be showcased at this year’s MIPIM

Ostrava will be present for the thirteenth time at the 22nd annual MIPIM, the world’s premier real estate event for professionals. The city’s display will cover over 80 m2 , and will be located at no. 08.30 – 10.29 on Level 01 of the Palais des Festivals in the French city of Cannes.

Ostrava’s delegation will be headed by Mayor Petr Kajnar and his deputies. The city’s partners at the presentation are CTP spol. s. r. o., Dalkia Česká republika, a. s., Multi Development Czech Republic a. s., OHL ŽS, a. s., RPG Real Estate Management, s. r. o., PRK Partners s. r. o, Globalnetworks and the CzechInvest agency.

This year, Ostrava will present itself as a city offering huge potential for a wide variety of investments. By harnessing this potential, the city will be able to strengthen its position as the dynamically growing hub of a major transnational region. Among the most important projects to be presented at Cannes is Ostrava’s Science and Technology Park, which is set for expansion in the coming years. Other key investment opportunities are available at the Ostrava-Mošnov Strategic Industrial Zone, offering over 200 hectares of prime commercial real estate. The city also has a range of brownfields in central Ostrava, including the New Karolina site and the Lower Vítkovicearea. Another major brownfield site currently being readied for future use is the Ostrava-Hrušov Development Zone, which will be financed via a PPP (public/private partnership) scheme. This year’s MIPIM presentation will emphasize Ostrava’s role as a rapidly developing city, including its bid for the title European Capital of Culture 2015. An integral part of this bid was the revitalization of the Black Meadow zone in the city centre, which will be coordinated by the Netherlands-based Maxwan studio. Ostrava’s display will also present a number of sites suitable for light industrial investment, residential developments, office premises, retail developments and a range of other commercial activities.

Ostrava’s presentation at MIPIM will also be accompanied by a programme of events for potential investors on Thursday 10 March. As in previous years, visitors to Ostrava’s display will be able to sample local beer from the Ostravar brewery, plus a range of cocktails and a display of professional cocktail-mixing.

The 22nd annual MIPIM will be held in Cannes from 8 – 11 March 2011.

Expansion of the Ostrava Science and Technology Park

Ostrava’s Science and Technology Park is located on the same site as the VŠB-Technical University of Ostrava campus – enabling close coordination between commercial development and the university’s outstanding scientific research facilities. This brings many advantages to businesses based at the Park: close contacts with other R&D-focused companies and their staff, the opportunity to cooperate on technology transfer and share contacts with university-based experts, intellectual property protection, the availability of training services, and an attractive location with high-quality office premises. The Science and Technology Park provides customized services to meet the needs of each individual client, offering tailor-made solutions at very reasonable costs.

The Ostrava Science and Technology Park currently has two multifunctional buildings (known as PIANO and TANDEM), containing high-quality office premises, laboratories, and shared areas including conference/meeting facilities. The Park also includes buildings owned by two private investors – Elcom and Ingeteam – which were the first companies to base themselves on the site. In total, 26 companies in the four buildings of the Science and Technology Park employ over 680 people, mostly with university degrees.

The Science and Technology Park currently covers 10 hectares, of which half has already been built on. The buildings at the Science and Technology Park are now full to capacity, and so the City of Ostrava is planning two new multifunctional buildings (MFBs), to be co-funded via the Operational Programme Enterprise and Innovation – Prosperity. A subsidy application has already been submitted. If successful, the project will be completed by 2013 (MFB 3) and 2014 (MFB 4). The new buildings will contain company premises, a business incubator and a technology transfer centre. MFB 3 will provide 4 121 m² of floor space to let, and MFB 4 will add a further 3 784 m² when completed.

As well as expanding the current Science and Technology Park, the City of Ostrava is also preparing new development zones which will increase the Park’s area by a further 26 hectares. Mayor Petr Kajnar explains: “In the next ten to fifteen years we expect the Park to provide jobs for 10 000 to 15 000 people working in IT, engineering and other high-tech sectors. There is a close link here with the VŠB-Technical University of Ostrava. Graduates of the university will be able to find work with foreign investors who will set up operations in Ostrava in the future. For many such investors, it is an essential requirement to be located close to an excellent university and high-quality business facilities.”

More information about VTPO on http://en.vtpo.cz/