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

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 more than CZK3.3 billion (€131 million).

The City of Prague was interested in the building due to its historical value and because the recent sensitive reconstruction of the building will allow the city to move in without major investment. Its strategic location in the city centre on three metro lines and the capacity of the office building also played an important role in the decision. Prague intends to move several hundred of its officials from Škoda Palace, Adria Palace and the building on Mariánské náměstí into the office building. The transaction also includes an agreement for the bank to remain in the building on a lease until the end of 2026.

The purchase price consists of two parts. The first amount corresponds to the value of the property of CZK3.32 billion. The second part will be determined by an expert opinion of the value of the subsidiary’s other assets and liabilities. As a result, the total value of the transaction could exceed CZK3.5 billion (€140 million).

The agreement on the sale 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 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, assisted by counsel David Padyšák, associate Lenka Chmielová, junior associate Zuzana Princová and other members of the Prague office.

DLA Piper partner, Michal Hink, 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 for their professional approach in closing this complex transaction.”