Serge Borenstein - Belgian developer who "reinvented" the district of Karlin

07-05-2007

In today's One on One Jan's guest is Belgian developer Serge Borenstein who has lived in the Czech Republic since the 1990s and heads the Karlin Real Estate Group. Over the years Mr Borenstein has successfully invested billions of crowns into redeveloping Karlin, a formerly-industrial area that is growing more hip by the day. Serge Borenstein first visited the Czech capital in the early 1980s, describing his relationship with Prague as "love at first sight".

"I had a very, very short trip here in '83 and already at that time I fell in love! That was my first contact. Of course it was a very different city then: very quiet, no traffic jams, few stores. But there was a spirit, a really strong spirit. I mean, I came back here and I'm still here: after 18 years!

"When I moved here to work and live I was at first more involved in the media business because then in early 1989 or beginning of the 1990s it was very difficult to do real estate because no one had real property, the state was not selling yet and things like that. So we started to rent property from the city and we put up some of the first billboards that you could see at that time. Real estate came two or three years later."

Was it difficult to jump in, in terms of the language, different approaches here that were still changing then?

"No. I wouldn't say it was difficult. It was kind of challenge, it was exciting, it was discovering everything. And it's still like that for me even now. No, it wasn't difficult."

Tell me a little bit about the district of Karlin, this part of the city.

"My feelings towards Karlin were influenced by time I spent in New York just a few months before coming to the Czech Republic and indeed discovering the district of Karlin. I spent some weeks and months in New York, mainly visiting friends and galleries on West Broadway. I immediately saw a kind of analogy: like Karlin West Broadway was also a formerly industrial place that had attracted artists to rent cheap surfaces and after that people with money came who wanted to be close to the artistic community and also wanted property. I saw Karlin and thought it was similar and it was dream at that time but I thought 'why not try at least or dream of doing the same things?' The dream more or less came true but it isn't finished yet. I'm still dreaming."

Have you any favourite spots and how are they changing?

"The interesting thing, the challenge, was to keep that industrial zone and not just to destroy buildings and build new ones. The challenge for me was to try to keep aspects of those buildings but to make them more efficient for new lifestyles, for offices, residences, for retail and that was the first request when we engaged foreign or Czech architects was let's try to keep as much as possible the structure of those buildings."

In 2002 Prague was hit by devastating floods and Karlin was the worst hit area. Where were you at the time?

"I wasn't in Karlin because I couldn't get there. I myself was surrounded by water at my house in Zbraslav, where there was the same amount of water as here. I was completely flooded near the river at home and I was flooded at the place where I was working! It was a complete shock for me. During a few days I was really down and I told myself Prague was finished for me: my house was under water, my offices and properties were flooded and there were rumours that Prague would abandon the district of Karlin in order to make a big water retention area.

"So I was really in bad shape and morally disappointed and completely destroyed. But that was for one or two weeks and then life cam back. I said 'No' and the water went down and I began to think something good could come from it, since the more something is destroyed the more you have to reconstruct it. So indeed that's what's happened: today no district in Prague has an infrastructure like Karlin: everything is new. Water pipes, gas, electricity, everything is brand-new. The catastrophe in a way turned into a success, of course not only by me! A lot of people worked on Karlin and I think that the authorities also did a very good job. So, I am more than happy here."

Of course today the water barricades are in place so I expect you sleep better now!

"{laughs} I definitely sleep better! I mean to sleep really better I should sleep in my office because in the area of my home there is no water protection yet! But should the floods ever come back I will leave my home to sleep in the office!"

What is the prognosis now for Karlin: will it grow increasingly up-market? Will rising prices eventually drive-out the artists, etc?

"You're right that Karlin is changing a lot and we do our best to not make it a commercial place, I mean 'we'... the authorities are the ones mainly deciding but we do our best as a developer to keep a balance between offices, residences and retail. For us that is a very important thing. But concerning the prices, they will of course follow the market. It is right next to the city centre, and while prices don't need to be as high as Prague 1 there's no reason why they should be much cheaper. So the only advice I can give to people is to come as soon as possible! I mean it is really promising. It's more than promising; it's a real good investment, even if you don't necessarily want to buy to move there straight away, you may want to buy to ensure your future.

"We've given a lot of possibilities to artists to have ateliers here, there are quite a lot of different halls, there are concert areas, though sometimes there are problems with residential areas but that's life and people get used to that also. Despite all the problems, we've managed to make Karlin more and more cultural and it's only the beginning."

07-05-2007