Praha 6 will sell land with a residential project to Penta for 436.5 million

Prague - Prague 6 will sell land with a residential project in Ořechovka to the Penta group for 436.5 million CZK. The company succeeded in a competition where the municipality wanted at least 250 million CZK for the area Na Dračkách. The spokesperson for Prague 6, Ondřej Šrámek, informed about the outcome of the competition today. The municipal district originally intended to build on the parcels itself, but has since backed down from that plan. With the funds obtained, the municipality aims to build, for example, a swimming pool.

Penta will acquire the land with an existing project and building permit for the offered amount. Seven companies registered for the two-round competition, and the three best bids advanced to the second round.

The municipal council will decide how the municipality will use the obtained funds. However, the leadership of Prague 6 has already indicated that part of the money will go towards constructing a new swimming pool at the Petynka swimming area.

The area where Penta’s residential project is to be built is a former brownfield between Ořechovka and Veleslavín. The sale competition was in two rounds; in the first round, price accounted for 70 percent of the decision. The remaining 30 percent of the evaluation of bids consisted of the speed of construction, the offer of public investment in the territory of Prague 6, and adherence to the architectural design according to which the municipal district originally intended to build on the land. In the second round, the three advancing bidders could bid against each other until one of them offered the highest price.

The municipal district planned to build the apartments on its own. However, considering an analysis by the consulting firm Deloitte, it ultimately decided to sell the area along with the project in a so-called share deal. The land and project will transfer to a subsidiary of the SNEO company, which the municipality will then sell to a private developer. The sale of the land was approved by the district council members at the December council meeting.

The Greens from Prague 6 criticized the process, stating that it is unnecessary to sell the parcels when the municipal district already has a prepared project along with a building permit. The Greens would prefer that the SNEO company build the apartments, and thereafter the municipal district would offer them to residents as starter apartments for young families or for preferred professions, such as teachers or police officers.

According to the Greens, the municipality should use a competitive bidding method for all property sales, as it evidently pays off given the auctioned price. In the case of the land at Vítězné náměstí, which the municipality also sold to the Penta group, the price per square meter was less than half.

Critics also disapprove of the municipality's intention to spend part of the money on a swimming pool. "We would see it as more suitable for these funds to finance necessary extensions of schools and kindergartens or public housing. Rents in Prague 6 are at the ceiling, and young people have nowhere to live,” said Green council member from Prague 6, Petr Píša.

Before the 2014 elections, the municipality announced a contract for 1.1 billion CZK for building apartments in the area. It subsequently canceled it, stating that the next political representation would decide on the further course of action.