Prague approved the purchase of the building from Komerční banka for CZK 3.5 billion

Prague will buy VN 42, which owns an office building on the corner of Wenceslas Square and Stepanska Street, from Komerční banka (KB) for about CZK 3.5 billion. It was approved by the city councillors today. The municipality plans to move officials to the building from Škodovo Palace in Jungmannov Street, where it is leased until the end of March 2028.

According to the approved document, the purchase price consists of two parts. The value of the building itself is CZK 3.32 billion and the rest of the amount is made up of other assets of the company being bought. This is provisionally valued at approximately CZK 222.2 million, the exact amount will be determined by an expert's report. The transaction is expected to be completed by 1 July this year. According to the document, the bank will remain in the building under lease until the end of 2026.

On 12 March this year, KB invited bids for the purchase of the building or the company through which it owns it. Several bidders have come forward, including the capital, whose city council approved a bid of up to CZK 3.65bn in March. Subsequently, the bank's management decided to negotiate only with Prague. The municipality has to solve the problem of where it will place some 1,200 officials who now work in the leased Škoda Palace in the coming years.

The five-storey neoclassical building on the corner of Wenceslas Square and Štěpánská Street, built in the 1920s, suits the municipality in terms of capacity, which is about a third larger than in Škodovo Palace. According to the city administration, the location in the city centre at the intersection of all three metro lines is also suitable. The house has been listed since 1958.

Prague's administration under former Mayor Pavel Bém (ODS) moved officials to Jungmannova Street. Prague dealt with the situation surrounding the lease for several years and unsuccessfully sued the original owner of the palace, Copa Retail, over the rent. The former city administration headed by Mayor Adriana Krnáčová (ANO) agreed to modify the lease agreement. The 20-year lease was supposed to cost the city CZK 4.4 billion, but in the end it will pay CZK 860 million less. In 2017, the palace was bought by GLL Real Estate Partners, an investment company based in Munich.

In the past, the capital has considered other places to move officials. In the last year, Prague's leadership negotiated to buy the main post office building in Jindřišská Street, but did not reach an agreement with the Czech Post. Earlier, there was also a plan to build a new building at Na Knížecí, but this too was abandoned. The management of the municipality is housed in the New Town Hall building on Mariánské náměstí, which the city owns.

Source: CTK
Photo: Komerční banka