Prague to buy Czech Post building for €17.3 million

27
Oct
2023
News - Prague to buy Czech Post building for €17.3 million #Czech Republic #investment #Post Office #Prague

by Property Forum | Investment

The capital city will buy the Czech Post building in Na Strži Street in Prague 4 for CZK 425 million (€17.3 million). The city wants to sign the contract with the post office as soon as possible, said councillor Adam Zábranský (Piráti). All 57 councillors present supported the purchase. The building is a seven-storey building from 1984 with adjacent land, writes ČTK.


The Czech Post announced an auction for the sale of the building but subsequently cancelled it. Due to its poor economic results, the Czech Post has closed three hundred branches in the Czech Republic since July this year and announced that it would be disposing of its assets. In the capital, 35 out of 106 post offices were affected by the closures. "The surrounding real estate belongs to Prague. We saw this as a huge and unique opportunity for Prague to take an active part in its development. We don't have many such opportunities. For Prague, the properties are worth more than we pay," Zábranský said. An expert appraisal valued the property at CZK 417 million (€17 million), but the city eventually agreed with the post office on a higher amount. Post spokesman Matyáš Vitík said the agreed price was more favourable than all other offers received in the past. "By concluding this successful transaction, the Czech Post is thus gaining more for its budget than it would have in the cancelled e-auctions. The further operation of the Czech Post branch in the Na Strži area is of course envisaged," the spokesman said. According to him, the sale has been planned for a long time and the company is counting on it in this year's management.

The purchase was approved by Prague city councillors at an extraordinary meeting. The price was not specified in the document approved by them; according to Zábranský, it was the post office's wish that the city would disclose it when the councillors voted. "The last modifications (of the agreement documents) were discussed last night. Our goal is to have the contract signed today," he said. Jan Hušbauer (ANO), an opposition deputy mayor of Prague 4, suggested that it should be written into the material that the city will cooperate with the council of the fourth district on the future development of the site. The deputies approved his proposal. In the discussion, Prague 4 Mayor Ondřej Kubín (ODS) also supported the purchase and said the town hall supports it regardless of whether the building will be managed by the municipality or entrusted to the district in the future.

Prague owns several plots of land around the post office building. According to the approved material, the purchase of the property will increase the value of the land belonging to the city. The purchase will also enable the city to maximise the potential benefits of urban planning and strategic development from a social, economic and environmental perspective. The building is in poor condition. Asbestos has been found, the building has a non-functioning central air conditioning system, leaks through the terrace to the first floor and heat is escaping from the building. The substation, owned by PREdistribution, also needs to be repaired. The energy performance of the building is at level E, which is the second worst on a six-point scale. It includes an underground garage with 39 spaces and a driveway.

The Postal Service announced an auction this September to sell the building. The winner offered a price of almost 400 million (€16.2 million). The Post Office subsequently cancelled the auction without giving any reason. The Prague City Council expressed interest in the property before the auction was announced. Even before the cancellation, city representatives said they would continue to negotiate with the post office.




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