Prague’s Kotva department store has been purchased by Generali Real Estate from the firm PSN. Neither side disclosed the price, but the Czech News Agency (ČTK) reports it was approximately 4 billion CZK, which would make it one of the biggest real estate deals of the year.
The seven-story building with a total area of 28,000 square meters will be renovated by Sekyra Group.
Generali said the aim of the cooperation with Sekyra Group is to carry out an extensive renovation of Kotva in order to restore the prestige and status of a top shopping destination in the historical center of Prague.
“We are proud to invest in this iconic property and look forward to fully refurbishing it, while preserving its historic value and adopting the latest recognized standards. This acquisition is fully in line with our strategy to invest in valuable assets in Europe’s most dynamic and fast-growing cities,” Ramon Spoladore, regional head of CEE & Nordics at Generali Real Estate, said.
Renovation is likely to start no sooner than next year, and the Prague 1 building department so far has only received requests for partial modifications.
The building, which dates to 1975, was once a key shopping center in Prague, but it has since been overshadowed by more modern ones, including Palladium, which is across the street from it.
Kotva has been listed as a Czech cultural monument since April 2019. Efforts to get it recognized as a significant work of post-war architecture began in 2007. Buildings from the communist era seldom get cultural protection. The Transgas Building and Hotel Praha both failed, despite petitions and protests, and have been torn down.
When Kotva opened in February 10, 1975, it was the fifth-largest department store in Europe and largest in Czechoslovakia, with a sales area of 22,160 square meters. It had 2,000 employees, serving up to 75,000 customers a day. It was intended to show the success of socialism, but it was often nearly empty of goods.
The building was radical for its time, built on a hexagonal pattern to suggest busy bees. It was designed by architects Věra Machoninová and Vladimir Machonin. The construction, between 1970 and ’75, was done by a Swedish firm, which was unusual during the communist era.
Since the 1990s, Kotva changed ownership several times. In 2005 Kotva was bought by the Irish group Markland. In 2016, the Irish state consolidation agency NAMA sold it to PSN, formerly Pražská správa nemovitostí, for a reported 80 million euros.
In 2019, PSN announced it would do a 1 billion CZK renovation, starting in 2020, but that did not materialize. PSN had also lodged the appeal against the landmark protection, claiming they were not properly represented.
Kotva and other department stores after 1989 had to face newly emerging modern shopping centers. The department store has been struggling for a long time with a lack of interest in renting retail space, with some entire floors remaining empty.