The government could not have chosen a worse time to sell its assets. Despite falling property prices, the cabinet is going to sell a villa at Prague’s Ladronka, a chalet in the Krkonoše mountains and a building in the centre of Karlovy Vary. Real estate brokers say the state will lose millions of crowns through these sales.
The villa situated at the Petra Velikého avenue in Karlovy Vary is probably the most interesting house. It has two floors, attic rooms, and underwent reconstruction a few years ago. Locals call it “Štrougalka”, after former communist PM Lubomír Štrougal. “It is mainly Russian clients who buy this type of houses in Karlovy Vary. And we have recorded a 70% fall in demand with them,” said Vladimír Hoch, executive at the Karlovy Vary-based real estate company MGH Consult.
Moreover, the financial crisis has slashed the prices of buildings in the city by roughly 30%, he said. “I have not had an opportunity to take a detailed look at the house, but just based on what I know about it, my rough estimate of its market price would be around 50-60 million,” Hoch said.
A simple calculation suggests that the state would lose roughly 20 million in sales proceeds. And that’s just one building.
The government is also getting rid of the recreational centre Slunečná near the ski resort Špindlerův Mlýn. The chalet now serves as a training centre for the government, but is also a popular holiday destination for cabinet members.
But the crisis has hit even the lucrative Krkonoše region. Jiří Reeh, head of the real estate agency Bonus Group in Hradec Králové, said that sales of holiday homes have decreased by as many as 60% in year-on-year terms.
One of the top properties is the villa for the lower house chairmen at Prague’s Ladronka. In the past Lubomír Zaorálek and Miloš Zeman lived there.
The government is not going to stop the sale and says it could not have sold the buildings earlier. “The sale cannot be launched until all formalities are arranged,” cabinet spokeswoman Jana Bartošová said. Nobody has therefore set until now how the state assets would be sold and to whom.
Property sell-offs are also being prepared at individual ministries. For example the Health Ministry is getting rid of buildings like warehouses, granaries, and buildings near hospitals. The sale of a block of buildings was to bring in CZK 113 million. “We will try to get as close to the sum as possible,” Deputy Health Minister Marek Šnajdr said.
Regardless of the crisis, Interior Minister Ivan Langer wants to offer former border police buildings, such as warehouses, garages and land, for sale. Unlike some lucrative buildings, however, the state would have to invest money in these properties, so the loss from their sale will not be that big.
Even Foreign Minister Karel Schwarzenberg admitted some time ago that he was considering selling the Štiřín chateau that turned out to be too small for the meetings held within the Czech EU presidency.