České dráhy, the Czech railway company, has sold the remaining land at Smíchov Station in Prague for just under two billion Czech koruna. According to information in the contract registry, the buyer, Sekyra Group, will acquire over 126,000 square meters of land. České dráhy announced in a press release that they have received a total of 2.4 billion koruna for the Smíchov land. This transaction is part of the development plan for the new district called Smíchov City.
Negotiating the Land Deal
České dráhy stated that the land price was the result of an agreement. Sekyra Group had the right to purchase the land at a lower price determined by past expert appraisals. However, České dráhy commissioned a new appraisal and negotiated with the buyer to establish a new price, resulting in an additional 300 million koruna. Leoš Anderle, the CEO of Sekyra Group, mentioned that both parties aimed to avoid a legal dispute through this agreement.
The Smíchov City project on České dráhy’s land at Smíchov Station began in 2004. The first phase of the project, based on a framework agreement, started with the purchase of a portion of the land by Sekyra Group in 2019 for 300 million koruna lower than the final price for all the land.
Historic Real Estate Sale Revenue
“The previous agreement granted Sekyra Group the right to purchase the land at a price determined by the expert appraisals at that time. I am pleased that the developer agreed to modify the original pricing arrangements, and together, we reached a mutually acceptable agreement,” said Michal Krapinec, the CEO of České dráhy.
According to Anderle, the sale of land at Smíchov represents the highest revenue from the sale of real estate to a private entity in České dráhy’s history. Even though new appraisals conducted by renowned international consulting companies Deloitte Advisory and PwC Czech Republic confirmed that the purchase price determined in the 2019 agreement was market value, they agreed to a higher price. The reason for such a business agreement was the parties’ desire to avoid a legal dispute, which undoubtedly would have led to significant delays complicating the project,” Anderle added, stating that the final purchase price is a compromise reached between the parties.
The first phase of Smíchov City, initiated by Sekyra Group in September 2020 with an investment of 3.5 billion koruna, is expected to be completed by 2032. The district, covering 400,000 square meters, will consist of residential, administrative, commercial, and public areas. It is estimated that over 12,000 people will live and work in the new Smíchov City. The renovation of Smíchov Station is also planned.