Months after completing renovations on the building Amadeus Real Estate is preparing to sell the historic building to the affiliated Realita fund, managed by Atris investment company. This would likely be termed a related party transaction, since the two companies share the same ultimate owners – the brothers Václav and Martin Klán. The onus will be on the two sets of valuers to come up with a price that represents fair value, not least since Realita has investments from around 16,000 people.
The sale (reported by Seznam zpravy) comes after a comprehensive reconstruction that cost approximately 4.5 billion Czech crowns. The renovated building, located on Prague’s Národní třída, recently reopened amid discussions about its new interior design and controversial art installations by David Černý on its facade.
Tomáš Jícha, Vice-Chairman of Atris’s Board of Directors, expressed confidence in the acquisition, stating that Máj represents an ideal property for their fund portfolio due to its prime location and long-term sustainability potential. The sale price is expected to reach “higher single-digit billions of Czech crowns,” making it the largest acquisition for the Atris-managed fund to date.
Martin Klán emphasized that the transaction will undergo rigorous independent scrutiny, according to SZ. The building captured public attention back in June when huge butterfly-Spitfire sculptures were installed on the building’s facade. Like most controversial things connected with both art and public space, the purple monsters were the brainchild of artist David Černý. The installation sparked a debate over power conservationists in Prague have to kill new ideas and innovation that fizzled out.
This latest news looks likely to bring into another age-old question: how valuations are conducted by local investment funds. Commercial real estate prices have fallen around Europe, but they remain at restrictively high levels thanks to the willingness of local investors to accept low yields for them.
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