Prague will buy VN 42, which owns an office building at the corner of Wenceslas Square and Štěpánská Street, from Komerční banka (KB) for about CZK 3.5 billion. The city councillors finally approved the deal last night, and representatives of both parties will sign the contract at noon today. The municipality plans to move officials to the building from the Škodovo Palace in Jungmannova Street, where it is rented until the end of March 2028.
KB invited bids for the purchase of the building, or the company through which it owns it, on 12 March this year. 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.
According to the document approved today, the purchase price consists of two parts. The value of the building itself is CZK 3.32 billion and the rest of the amount consists of other assets of the company to be bought. The transaction is to be completed by 1 July this year and the bank will remain in the building on a lease until the end of 2026, according to the document. Councillor Zdeněk Kovářík (ODS) said today that the city will take the building out of the purchased company in the future and own it outright.
The municipality has to solve the problem of where it will place about 1,200 civil servants who now work in the leased Škoda Palace in the coming years. According to city officials, the KB building is well suited for these purposes and will require almost no renovations. 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.
Prague’s administration under former Mayor Pavel Bém (ODS) moved officials to Jungmannova Street. Prague has been dealing with the situation surrounding the lease for several years and unsuccessfully sued the original owner of the palace, Copa Retail, over the amount of the lease. 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
