DLA Piper advises Komerční banka on sale of iconic Wenceslas Square office building in Prague

DLA Piper’s Prague office has advised Komerční banka on the sale of its subsidiary, which owns the historic building at Václavské náměstí 42, to the City of Prague for over CZK 3.3 billion (EUR 131 million).

The City of Prague pursued the purchase due to the building’s historical significance and the recent sensitive reconstruction, which allows the city to move in without major investment. Its strategic location in the city center, served by three metro lines, and the building’s capacity were crucial factors in the decision. Prague plans to relocate several hundred officials from Škoda Palace, Adria Palace, and the building on Mariánské náměstí into this office building. The transaction also includes a lease agreement for the bank to remain in the building until the end of 2026.

The purchase price is divided into two parts. The first amount reflects the property’s value of CZK 3.32 billion. The second part will be determined by an expert evaluation of the subsidiary’s other assets and liabilities. Consequently, the total value of the transaction could exceed CZK 3.5 billion (EUR 140 million).

The sale agreement was signed on 21 June 2024 by Bohuslav Svoboda, Mayor of Prague; Jan Juchelka, Chairman of the Board of Directors and CEO of Komerční banka; and Jitka Haubová, Member of the Board of Directors of Komerční banka. The transaction was successfully completed and settled on 1 July 2024 after the subsidiary’s financial year-end.

DLA Piper’s Prague team was led by real estate practice head and partner Michal Hink, with assistance from counsel David Padyšák, associate Lenka Chmielová, junior associate Zuzana Princová, and other members of the Prague office.

Michal Hink, partner at DLA Piper, commented, “We’re very pleased to have been part of this unique transaction, which represents the largest single asset deal of the year so far. This builds on my many years of working with Komerční banka, and I would like to thank the whole team and the counterparty for their cooperation throughout the sale and their professional approach in closing this complex transaction.”