Further details on the transaction shall not be published. MSI is a 66% shareholder in Masaryk Station Development (MSD), the remaining 34% of shares is owned by České dráhy (Czech Railways).
A Project Agreement concluded by MSI, MSD and České dráhy in 2004 calls for a joint development of the area around Masaryk Station and a subsequent buy-out of Czech Railways-owned land by MSD after completion of all development activities.
"We plan to negotiate with České dráhy on a possible acceleration of the agreement, which would allow for faster land acquisition. The question now is whether České dráhy are prepared to withdraw from the consortium and sell the land or its parts sooner, or whether they wish to remain in the position of a developer and delay the sale until all the construction in the area is completed and approved, which will take years. Both scenarios are viable for us and we are prepared to discuss them," said Petr Palička, Penta's Project Director.
The Agreement from 2004 assumes up to 125,000 sq m of gross floor area will be built on the site, for which MSD should pay CZK 900 million.
"It is evident that we will not be able to build 125,000 sq m. That figure was based on the original concept of removing the railway station function. We now know that the railway station is to stay, so the maximum floor area of the proposed buildings will be much smaller – less than half of the original 125,000 sq m in fact," said Jan Hromádka, Chairman of the Board of Directors of Masaryk Station Development.
It is evident that the maximum realistic size of land for construction - even after a change in the local area planning, is approximately 1 hectare. The remaining land will be used for parks, roads and paths and/or other landscaping.
MSI therefore thinks that calculating the total value of the land by multiplying its area by the market price for construction land in the centre of Prague would not be correct.
"The value of land for developers depends on what and how much can be built on it, not by simple multiplication of the overall area and a price per square metre. At the moment, most land in the vicinity of the Masaryk station can not be built on under the current area development plan and construction prohibition," adds Jan Hromádka.