The new requirement reshaping development in Prague

Until now, planning agreements in Prague have been voluntary: allowing the city and the investor to agree on how they would work together, but without any no requiring it. For projects in the designated areas, investors will now need to address this requirement at an early stage of the project planning. 

For developers and investors, this introduced an additional workstream that can have  direct impact on project timelines and delivery. In practice, the new requirement means an investor in a transformation area needs to factor in the planning agreement before they can even apply for a building permit, as the building authority will not process the application without the signed agreement. These agreements typically require the developer to deliver infrastructure works or make a financial contribution to the city. In return, there is greater certainty that the project's agreed parameters will not be challenged, even if the political leadership changes.

This is particularly relevant for foreign investors, funds and lenders, who are often active in Prague's transformation areas – whether as developers or as providers of capital for development projects. Anyone who overlooks this obligation during due diligence or acquisition risks running into weaker position in negotiating the planing agreement with municipality, significant dealays of permitting procedures or in the worst case, the inability to permit the project at all

We therefore recommend addressing the structure, likely scope, timing and commercial implications of the planning agreement as early as possible in the project preparation phase, rather than waiting until the building permit application is imminent. In our experience, negotiating with the city usually takes longer than investors expect.

If this topic is of interest to your business or investment strategy, we would be happy to discuss it in person, for instance at Expo Real, 5–7 October 2026 in Munich.