Marwick November/December 2017 by KPMG Česká republika

© 2017 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

November/December 2017 A magazine for clients and friends of KPMG Česká republika

Peaking real estate

What you need to know about taxes, accounting and law in 2018. Prague Wednesday 22nd November 2017, Forum Karlín Olomouc Wednesday 29th November 2017, Clarion Congress Hotel České Budějovice Thursday 7th December 2017, Clarion Congress Hotel

Programme and registrations on www.kpmg-eventy.cz. 2

Tax and Legal Forum

WHAT IS MISSING? Historical periods are defined by architectural styles or iconic buildings. While the Dancing House epitomises the relaxed 1990s, modern-era Prague is still waiting for its icon. It is not that we have a shortage of audacious architects. Prague and the Czech Republic are wrestling with a lack of courage to put development visions into practice. This lack of courage has a direct impact on both architecture and infrastructure. Two years ago, I wrote in this editorial about Prague’s vision for two million inhabitants. The current prognosis, laid out in the capital’s strategic plan, speaks of the advent of another 93 000 people to the city just by 2030. If the prognosis turns out to be correct, the growing number of inhabitants will create a demand for 82 400 flats, not built yet, and corresponding transport capacity by 2030. Whereas 150 000 cars commute to Prague every day, vast development areas directly connected to existing infrastructure have been waiting to be put to use for many years. On the other hand, the market has been rather perky. As we summarize in our article dedicated to the KPMG Property Lending Barometer, real-estate portfolios of Czech banks are in good shape. The same is true for transactions, which are propelled by continued growth. The current issue also brings you the most recent tax news and our opinion of the amended Building Act. I wholeheartedly recommend the inspirational interview with architect Petr Kolář. Last but not least, we invite you to read a report from the ongoing reconstruction of our Prague offices.

Photo: Michael Tomeš

editorial

Marwick – a magazine for clients and friends of KPMG Česká republika. Published six times a year by KPMG Česká republika, Pobrežní 1a, Praha 8. MK CR E 22213. On-line subscriptions available at www.marwick.cz. Editor in chief: Michaela Raková, Art director: Štěpán Prokop, Photoeditor: Barbora Mráčková, Copy-editor: Edita Bláhová, Cover illustration: Václav Havlíček, Content and production: Boomerang Communication. KPMG Česká republika’s offices are located in Prague, Brno, Ostrava and České Budějovice. www.kpmg.cz © 2017 KPMG Česká republika, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“), a Swiss entity. All rights reserved.

Pavel Kliment Partner, KPMG Česká republika pkliment@kpmg.cz

REAL ESTATE

real estate Pavel Kliment, Partner, KPMG Česká republika, pkliment@kpmg.cz Pavel Dolák, Director, KPMG Česká republika, pdolak@kpmg.cz

IT WON’T GET MUCH BETTER T

he Czech Republic has been through the most successful period in the history of real estate financing. The volume of transactions exceeded two billion euros during the first six months of this year. Thanks to this, the Czech Republic overtook Poland, which is now number two in Central and Eastern Europe. Investors focus on all market segments and don’t relax their efforts even in projects outside of Prague. Apart from Czech investors who account for one third of the business, the Germans have shown a permanent interest in the Czech market. Furthermore, the influence of Asian investors is growing significantly. European countries and the USA have been watching the Czech market closely, as well. Other countries in the region, such as Hungary and Romania, despite the recent jump in investment volume, haven’t been on track. With good economic growth, record low unemployment rates, a high volume of investment, price growth and the settlement of previous troublesome loans, banks have a positive outlook on financing in the real estate market as it has been confirmed by this year’s survey conducted by KMPG Property Lending. Czech and foreign bankers are expecting a growth of their loan portfolios of companies and of the entire sector. On the other hand, their concern is whether or not this trend is sustainable.

4,0% 3,5% 3,0% 2,5% 2,0% 1,5% SWE

AUT

GER

CZE B

GERMANY IS THE MARKET LEADER During the first six months of this year, the volume of European real estate transactions didn’t reach the period-on-period benchmark set during the previous two years. Nevertheless, compared to the last decade, it has been an above-average half-year. The trends vary by country. While there has been a 16% fall in transactions in the UK, in Germany they grew by one third. These two countries participate in more than half of the transactions in Europe. BREAKING THE MARGIN GROWTH TABOO Compared to previous years, more respondents see the indicators of the Czech National Bank as a constraint for future development. A similar situation is to be seen in Austria and in Slovakia. In the Czech Republic, fewer respondents stated that the lack of debtor equity is a constraint. In Poland, however, this factor is very important. Unlike in Germany, Great Britain, Ireland and the Netherlands, the lack of genuine project is not perceived as a problem. The economic development has a decisive impact on the market, which applies without distinction to all of the countries. The survey also shows that the average level of the interest margin in Europe has not changed significantly compared to last year 6

CZE

SVK

POL

HUN

ROM

or that it dropped slightly – especially in countries with high interest rate margins in previous years. The lowest rates were found in Austria and in Germany where the credit conditions are stricter. Croatia and Serbia are to be found at the other end of the ranking. In the Czech Republic, we are witnessing a margin decrease at banks which had high margins and a slight increase or a decline in decrease at banks that used to have low margins. Czech bankers are not afraid of talking about margin growth. The reason this taboo was broken is not just the low rates of overall interest costs, which makes debtors less sensible to the margins (they focus more on negotiating other loan conditions), but also the growth in costs connected with regulation on the side of the banks. In the Czech Republic, there are a lot of banks capable of offering an interest margin below 2%. While big banks are still more efficient with lower margins, several smaller banking institutions are competitive. The survey confirmed bankers tend to see development projects as riskier. As such, compared to finished or already rented projects, higher interest rate margins are required for their financing. This difference varies by country. In the Czech Republic it is 20 or 60 basis points. In the UK it is 150 to 220. Czech bankers require higher margins for hotels

(CZE B = data from 5 biggest Czech banks)

AVERAGE MARGINS OF FINISHED AND RENTED PROJECTS offices retail industrial plants hotels

compared to other properties. Most of the banks ask for a securing instrument (mainly an interest rate swap) as the interest rate risk increase over the long-term and banks try to mitigate the negative impact of the debtor’s cash flow. However, different banks have different approaches. Some of them demand the loan be secured as a whole, others just partially. The condition of a securing instrument being used can also apply if the interest rates grow dramatically. RESIDENTIAL PROJECTS TO RULE THEM ALL Residential projects are in the lead among Czech bankers. This trend has not changed during the past two years and a similar situation can also be seen in other countries. While abroad, the second place belongs to offices, industrial plants are still slightly ahead of the game in the Czech Republic. Even though bankers like hotels the least, every year there are more banks capable of financing them or specializing in such projects. Czech bankers, together with the Germans and the Swedish, prefer finished and rented projects. The number of loans Czech banks granted for financing finished projects over the past twelve or eighteen months tripled. This trend has been seen in the Czech Republic for the past three years. The situation in Austria, Hungary and Slovakia is different as the ratio of finished projects to new developments is relatively balanced. Another recent trend is financing redevelopment and reconstruction of existing premises (e.g., shopping centres). LOWER RISK LOANS IN EUROPE The ratio of high risk loans decreased again this year in most of the countries that participated in the survey. A significant leap has been seen in Spain, where there are less risky loans thanks to the facts that the market has recovered, the volume of transaction increased and structural changes were implemented. The Czech Republic has been with its 94% of safe loans among countries with the least high risk loans for several years together with Sweden, Germany, Great Britain and Poland. On the other side of the scale there are countries like Bulgaria, Croatia and

Cyprus. Potential troublesome loans in the Czech Republic are in most of the cases restructured (the payment calendar is adjusted). On the other hand, Spanish bankers solve these cases by selling, as they believe that only 38% of restructured loans can be saved. NO CHANGE OF CONDITIONS FOR NOW The main covenants required by Czech banks haven’t changed in years. Besides the calculation of debt servicing, which varies bank to bank even within the same country, it is important to note that covenants are one of many tools available. Furthermore, the risk management of the banks has gone a long way and is not subject to scrutiny of the Czech National Bank. Compared to last FINANCING… … IN A FOREIGN CURRENCY The total portion of loans granted in a foreign currency (almost exclusively in euros) are estimated to be 70%. This is comparable to Poland and Hungary. The end of the exchange rate commitment of the Czech National Bank earlier in the spring didn’t have a significant impact on loans at most of the responding banks. The main reason is the golden rule of financing rentals in euros from loans in euros. … WITH CLUB LOANS This year confirmed again that syndicated loans for financing real estate are, in comparison to the rest of Europe, very popular among Czech banks. However, the management of club loans is a matter for bigger banks. A new trend is loan syndication within one banking group, where both the Czech subsidiary and the foreign parent company participate in financing. … OF LAND PROPERTY Financing land property is almost impossible and it is highly unlikely to change in the medium-term and to return to where it was before the financial crisis. However, agricultural land is partially an exception. 7

2010

2011

2012

2013

2014

2015

2016

2017

1 2 3 4 5 year, the survey outcomes underlined a careful selection of projects and real estate for granting loans. Limits for particular loans haven’t been raised. As last year, German, Swedish and Irish banks offer the longest loan amortization schedule, that is to say, the time required by the bank for the loan to be paid off by regular instalments (approximately 50 years). Yet, loans with debtors are made for only 6 to 9 years in these countries and indicators for debt servicing are much stricter (e.g., DSCR in Sweden is 2.1 to 2.8). The maximum duration of amortization in the Czech Republic is 19 years, the maximum loan term is 9 years. Both figures are around the European average. MARKET CONCENTRATION It is estimated that the two largest Czech banks have approximately 30% of the total number of THE IMPACT OF BREXIT ON REALESTATE FINANCING Most respondents, including Czech bankers, believe the impact will be neutral. A positive development is expected in the Netherlands and in Ireland. On the other hand, a negative impact is expected in Great Britain. Despite the uncertainty in the UK, the catastrophic scenarios have not taken place. The country is indeed facing an economic slowdown, inflation growth due to the weak pound sterling, but the unemployment rate is decreasing, the profits are stable and, thanks to investor trust, also high enough. 8

loans granted for financing real estate (besides mortgage credit). The five largest banks hold more than 70% of the market. The rest are other banks, credit unions and foreign banks. The foreign entities are mainly from Germany followed, at some distance, by Austrian ones. German banks such as Helaba, Deutsche Pfandbriefbank, Berlin Hyp and Bayerische Landesbank focus mainly on the largest transactions and on attractive buildings. Nevertheless, they can offer one of the lowest interest rate margins and above-average loan terms. Given the results from the beginning of 2017 and the activities of German banks, a strengthening of the position of these and other foreign banks in terms of financing can be expected. Volume and kind of transactions on Czech real estate will be important factors.

More than 90 significant banks and financial institution from 17 European countries participated in the KPMG Property Lending Barometer 2017 survey. The data were gathered during in depth interviews with banking representatives (heads of real-estate financing and risk management departments). The Property Lending Barometer 2017 is available at www.kpmg.cz.

DEVELOPMENT OF PREFERENCES OF CZECH BANKERS Office Retail Residential Industrial Hotel

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© 2017 KPMG Česká republika, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Anna Dvořáková

I SEE A GREAT CITY… M

ore green spaces, fewer cars, modern buildings and stadiums and more satisfied people easily finding employment thanks to investment and technological development. This is how current mayors see "their" regional cities in ten years. IT IS CRUCIAL TO TAKE THROUGH TRAFFIC OUT OF THE CITY I see Hradec Králové mainly as a city of satisfied citizens; a clean city with good conditions for living and raising children. There will be two buildings (administrative offices of the ČSOB Bank and Lesy ČR) which will be completely unique for Hradec Králové and the Czech Republic from city planning and architectural perspectives. Public green spaces and parks will have been revitalized; public transportation electromobility is being supported by major investments even now. What will be absolutely crucial for the city’s transportation though is the construction of roads taking through traffic out of the city. If the government manages to complete the southern connecting road between highway D11 and road I/35 and the planned northern bypass connecting I/35 and I/11 as soon as possible, the transport infrastructure in Hradec Králové will be able to meet the needs of 21st century city transportation without problems. Zdeněk Fink, Mayor of Hradec Králové

I WISH KARLOVY VARY WOULD GET A CENTRAL SQUARE Karlovy Vary will look more or less the same. Its centre, now a candidate site for the UNESCO World Heritage List, will have been inscribed on the List and will be developing very delicately and with respect to protected values. I believe the fragmented urban infrastructure of the 14 historical cadastral territories will have been connected in a functional and meaningful way, the existing brownfields will have been sorted out and small and medium production companies and services will have developed on the outskirts of the city. The reconstructed buildings of the historical Imperial Spa and Elisabeth Spa will become a showpiece and new highlights in the spa area. I wish very much that Karlovy Vary would get a square or 10

a location organically fulfilling the function of a central city square. Petr Kulhánek, Mayor of Karlovy Vary

BRNO WILL BE FAMOUS AGAIN I believe that in ten years, Brno will again enjoy the fame it used to have years ago. The city is working hard to ensure there will again be sports stadiums that are now considerably missing. In coming years, for instance a new athletics hall, a football stadium and a velodrome will be built here. We have progressed the most with building the athletics hall. It should be completed by 2020. The situation of athletics in Brno has been dismal for a long time. What the clubs miss most is a place where they could train primarily in winter. The hall meeting the criteria of the International Association of Athletics Federations will cover the winter training needs of Brno athletics clubs, including youth and senior clubs. The development of sports infrastructure goes hand in hand with the development of transportation. Thanks to the completion of another part of the great ring road, the city will be more accessible and the traffic smoother. For residents of Brno as well as visitors, it will bring greater comfort. It is our aim for Brno in ten years to be a modern, pleasant and open city comparable with Western cities. Petr Vokřál, Mayor of Brno

ZLÍN WILL BE MODERN AND WELCOMING I firmly believe that in ten years, Zlín will be a modern city and a pleasant place to live. It will be using modern technologies while still maintaining its unique green spaces. It will be a sought-after place for investors, families and top experts. And it will be welcoming for both its residents and visitors. Miroslav Adámek, Mayor of Zlín

NEW THEATRE AND STADIUM IN ČESKÉ BUDĚJOVICE I think that České Budějovice will be connected with Linz by highway D3, but the highway connection with Prague won’t have been completed. There will be a new theatre, a modern athletics hall and the hockey stadium will have been reconstructed and will be hosting the Extraliga ice hockey league. The traffic will be reduced, the city will be

real estate

attractive both for residents and tourists, the employment level will be high and there will no longer be a lack of technical labour. There will still be a lack of sources for the reconstruction of infrastructure (mainly roads, pavements and sewerage system). A part of the city will be using heat from the Temelín Nuclear Power Plant and waste collection and treatment will have been sorted out. The current representatives of the city will be enjoying a well-deserved rest and wishing general satisfaction to the city and its inhabitants.

potential of the many educated university graduates with good knowledge of languages. Antonín Staněk, Mayor of Olomouc

THE SMART CITY OF PARDUBICE Ten years is actually a short period within the life of a city when you realize how long it takes, for example, to change or create a master plan. In spite of that, I am convinced that in 2027, Pardubice will be a prosperous city developing in a sustainable way and implementing the smart city philosophy. I hope it will also be architecturally attractive – a delicate mixture of old and new architecture. I also believe that new houses will be built within the city rather than outside of it, using the city’s reserve capacities including brownfields. I am looking forward to smart technologies and applications becoming a part of our everyday lives, making the use of city services even more comfortable and better.

PILSEN WANTS TO BE A CITY OF INNOVATION Our aim is to constantly improve the lives of Pilsen residents. Even in ten years’ time, we want to be among the best in the Czech Republic. In increasing the quality of life, we are, for instance, very actively trying to implement electromobility and use smart technologies. In the 1990s, Pilsen had the first industrial park in the Czech Republic; now we would like to be the city pioneering the change of culture – from assembly lines to qualified labour. I would therefore be glad if in ten years, there would be companies cooperating with the University of West Bohemia and if we could take pride in being a city of research, development and innovation. I also have great ambitions for unmanned aviation; we want to be number one in the Czech Republic in developing and using drones. We have an authorization to perform aerial work, have new facilities for our Dronet Centre, we initiated the creation of the Technologies of Unmanned Aviation certificate programme at the University of West Bohemia and organize a unique festival of unmanned aviation DronFest which is among the greatest events of its kind anywhere in the world.

Martin Charvát, Mayor of Pardubice

Martin Zrzavecký, Mayor of Pilsen

OLOMOUC AS A CENTRE OF RESEARCH I see the future Olomouc as a traditional, historical, cultural and university city which is full of life which is at the same time; a city of congress and individual tourism. It will be a resident friendly city fully meeting the requirements of modern and healthy living and offering quality employment. In ten years, some current transportation issues in Olomouc will have been solved with an eastern bypass reducing traffic. Thanks to the support of public transportation and a significant extension of the existing cycle route network, there will be fewer cars in the city centre. The city leaders will keep forcing through freight transport out of Olomouc. Thanks to the cooperation with the Palacký University and the use of its research potential and top-tier departments, there will be more companies in Olomouc dealing with applied scientific research; as such, there will be significantly more positions offered in the clean and sophisticated industry. Other investors will be able to get involved in the new Neředín Industrial Park. There will also be centres of creative and shared services using the

OSTRAVA WILL BE LOADED WITH ENERGY The vision of Ostrava for the next seven, ten or fifteen years is not just mine; it’s a common vision of the city’s residents: last year, twenty thousand of them participated in creating the new strategic plan helping to shape the future of Ostrava. Over the past decade, we managed to stop and reverse the trend of people leaving, as for many of them Ostrava has become a city of new beginnings, actively attracting young, talented and hardworking citizens. Ostrava is now applying for the European Green Capital Award and as part of the preparations it is finishing major projects in revitalization of public spaces, city parks, and the.historical city centre and adaptation to climate change, cementing its reputation as a green city. By doing so, it makes good use of its industrial tradition developing and using environmentally friendly innovative technologies. That’s why in ten years, Ostrava will be a self-confident European city loaded with energy of active people… Closer to the world, people and nature.

Jiří Svoboda, Mayor of České Budějovice

Tomáš Macura, Mayor of Ostrava

Pavel Dolák, Director, KPMG Česká republika, pdolak@kpmg.cz

GOVERNMENT DISTRICT WANTED S

hall we build a new government district or stay in historical buildings in the centre of Prague? This is not the first time politicians are grappling with this question. Downtown historical buildings have retained their charm, which many don’t want to let go of. A retirement home, a monastery or a poorhouse – those are just a few examples of the previous uses of current ministerial buildings. What have they been through during the years and what makes them unique? Will they ever be replaced by new houses? Most European cities concentrate government buildings in the centre. Prague is no exception. Most of the offices are located in Prague 1, followed by Prague 2 and Prague 6, usually in historical buildings. Rules for heritage care narrow down the ways in which a historical building can be used, so the seat of a ministry, some other government office or an embassy provides a guarantee that the building will be preserved. Moreover, their appearance makes them very impressive, which fits the purpose of these institutions. Let us give you a tour.

A SHINING DOME AND PRESIDENT HUSÁK’S SILENCE We start on the former Petrské embankment, where at the beginning of the 1930s the Czechoslovak government built the Ministries of Agriculture, Transport and Industry & Trade. The building of the Ministry of Industry & Trade on Na Františku street is considered one of the most beautiful in Prague. The reason for that is its shining glass dome, which the eye cannot miss at night. The seat of the Ministry of Transport, designed by architect Antonín Engel, was originally built for the Czechoslovak Railway Ministry. Under communism, the building served as the seat of the communist party’s Central Committee. The then President Gustáv Husák actually lived in it. Because of that, the nearby Těšnovský tunnel was called "Husák’s silence" by the population, hinting at the possibility that

real estate

PATERNOSTER A characteristic trait of ministries built under the First Republic is a paternoster – an elevator with a chain of compartments that move slowly without stopping. It is a vertical means of transport based on the principle of a loop. The first loop elevator in the world was installed in 1884 in London. Prague has paternosters in 25 buildings, 8 of which are the seats of ministries. the President had the tunnel built so that the Committee’s meetings would not be disturbed by the noise of traffic. One of the most advanced bomb shelters in Prague was built here. Unfortunately, the shelter’s equipment was damaged by the 2002 flood. Apart from the Ministry of Transport, the building also houses the General Directorate of Czech Railways. Across the Vltava river, we can see the administrative centre of EU’s Galileo navigation system. The office has been in Prague for 5 years and it is so far the only seat of an EU agency in the Czech Republic. We’ll see whether the Czechs will manage to convince other member states, and more EU offices or agencies will see their seats set up in Prague. The competition is surely tough. MINISTRY OF JUSTICE AS A POORHOUSE Under the First Czechoslovak Republic (1918– 1938), a number of houses were built specifically for the purpose of housing ministries and administrative buildings. For example, at the end of the 1920s, the beautiful neoclassicist Ministries of Health and Labour & Social Affairs were built underneath the Emmaus Monastery. Some houses were transformed into government buildings, such as a local poorhouse, palace and monastery. A poorhouse turned ministry is the case of the Ministry of Justice. The current Ministry of Education used to be the palace of the Rohan aristocratic family. The Ministry of Finance in the Letenská street used to serve as a monastery and the Ministry of Regional Development on the Old Town Square used to be the seat of the Prague Municipal Insurance Company. The Ministry of the Interior was built at the end of the 1940s. Because of its appearance, it earned the nickname "kachlíkárna" (a familiar name for a house made of tiles). The capacity of the building has been insufficient for quite some time, so the ministry’s civil servants have their offices elsewhere in Prague as well. Near the ministry, opposite the Exhibition Grounds in Holešovice, the Police headquarters are located.

ACROSS THE RIVER Apart from the President’s seat, the Hradčany district houses two splendid government buildings: the Ministry of Foreign Affairs in the Czernin and Thun-Hohenstein Palaces and the Ministry of Culture in the Nostic Palace. The Czernin Palace boasts a 1.7-hectar garden. The presence of the Ministry of Foreign Affairs and the residential nature of the area gave rise to the vast diplomatic district in Prague 6, mainly in Dejvice and Bubeneč. More than 40 countries and international organisations have their Prague seats there. The Ministry of Defense is also located here, in the former cadet academy on Na Valech street and surrounding buildings. The Czech Army’s General Staff forms one side of the Vítězné (Victory) square, which to this day remains architecturally unfinished. WILL HISTORY BE REPLACED BY PRACTICAL, MODERN SOLUTIONS? Our short tour of government buildings has clearly shown how scattered they are. The Ministry of the Environment, for example, has its seat in Vršovice. Its employees have to cover the longest distance to get to a government meeting – almost 7 kilometres. Having the government located in new office buildings would bring many benefits, mainly when it comes to economic and user standards. That is why there is a recurrent idea of creating a new government district or building modern houses where some offices could move in together. It would simplify communication and joint meetings. Possible locations, already discussed in the past, include the districts of Bubny, Libeň, Pankrác, Letňany or Butovice. We have recently witnessed a similar trend with a number of financial institutions which have moved outside the centre in the last few years.

Petr Toman, Partner, KPMG Česká republika, ptoman@kpmg.cz

NEW BUILDINGS AND TAXES. WHERE WILL YOU PAY THE MOST? W

hat also plays a great role in buying new apartments is the tax burden. The value added and property acquisition taxes should be of interest to every buyer. Only when considering all aspects of the new apartment, including the taxes, can you get a full picture of the final price of the real estate. A KPMG study compared the tax burden on new apartments comprised of the value added and property acquisition taxes in some EU countries as well as in a few non-EU countries. How did the Czech Republic do in the comparison? POSSIBILITIES OF TAX BURDEN ON APARTMENTS For the EU Member States, the tax burden is governed by the EU VAT legal framework (i.e., directive). Where an apartment is sold by a VAT-registered corporate entity in the country of its location, the delivery of the apartment is exempt from VAT. However, this doesn’t apply to new buildings, i.e., buildings that are not yet inhabited or within a specific time after their inhabitation. Alternatively, the seller can choose to apply VAT voluntarily. In EU Member States, the sale of new homes is subject to output VAT with a standard rate which cannot be lower than 15%. An exception can be made for social housing, where the tax

rate can be lower. In the Czech Republic, the transfer of new buildings is generally subject to the standard VAT rate of 21%. Social housing then falls within the reduced rate category of 15%. Social housing is generally not strictly defined; in the Czech Republic, it involves apartments up to a maximum area of 120 m2 and detached houses up to a maximum area of 350 m2. SOCIAL HOUSING AND TAXES In some EU countries, reduced tax rates for social housing don’t apply. These include the Netherlands (21% VAT), Slovakia (20% VAT) and Croatia (25% VAT). On the other hand, in some countries the tax reduction for this housing category is much greater than in the Czech Republic. For example in Hungary and Romania, it’s 5% VAT, in Poland it’s 8% and in Slovenia it’s 9.5%. The reduced VAT rate of 15% makes the Czech Republic one of the countries with the highest tax burden on the transfer of social housing apartments. When buying a social housing apartment, a buyer in the Czech Republic will "save" 5% of its price compared to Slovakia (only considering the VAT burden), whereas in comparison to Poland or Hungary, new Czech apartments will be more expensive by 7–10% due to the higher VAT rate. Great Britain and Germany have no VAT burden on new buildings; however, there are more aspects to consider in buying

real estate

VAT RATES (IN %) IN SELECTED COUNTRIES (ABBREVIATED ACCORDING TO INTRASTAT)* VAT VAT - social housing 30% 27% 25% 23% 22% 21% 20% 21% 20% 19% 20% 15% 10%

0% BG

0% HR

a building. In Great Britain, it’s the zero rate of VAT in transactions with no output VAT, where the seller can claim a VAT deduction for related costs. In Germany, such claim is not possible. Therefore, the ultimate result of the sale will be completely different in both countries for the seller and, ultimately, for the buyer as the VAT deduction that cannot be claimed by the seller will be reflected in the selling price.

10 %

10%

5% 0%

* Bulgaria (BG), Czech Republic (CZ), Germany (DE), Great Britain (GB), Croatia (HR), Hungary (HU), Moldova (MD), Netherlands (NL), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Serbia (XS).

ONE-BEDROOM APARTMENT IN PRAGUE And how does VAT demonstrate itself in practice? For a smaller apartment, let’s say a one-bedroom apartment with a price of CZK 4 million (approximately EUR 150,000), the difference in the property tax burden can be as high as CZK 1 million. We would get the same result comparing an apartment in Croatia and Great Britain. PROPERTY ACQUISITION TAX Another tax burden applicable in apartment transfer is the property acquisition tax. The principle of its application is similar to the Czech Republic in most countries, i.e., at least the first transfer of a new building is exempt from the tax. In some countries, such exemption is conditioned by this transfer being subject to VAT. This means that where the transfer is VAT-taxed, the property acquisition tax doesn’t apply.

real estate Pavel Kalouš

THE ARCHITECT THAT BILLIONAIRES STAND IN LINE FOR H

e builds schools, breweries, hotel resorts, and houses for Czech billionaires. However, there is one thing that all constructions by Petr Kolář, who is among the most requested contemporary Czech architects, have in common: an elaborate interior. “When you enter, you need to find your bearings intuitively. That’s what makes high quality architecture.” Peter Kolář says. When was the last time that you stopped by a construction in Czechia and said to yourself “Wow, that is something”? There are many good architects here, so even in Czechia you can bump into constructions that are worth stopping for. The last time it happened to me was with the National Technical Library in Prague. It is a beautiful construction. How is the architecture in Czechia doing 28 years after the revolution? Many people criticise it, but I don’t see it so negatively. Timeless projects are created here, which last dozens of years, although the truth is that these are mostly private constructions, which their owners protect from the public, so you don’t get inside much. But in general, architects here have the same freedom as abroad, you just need to chance upon a client that will have the courage to experiment. That’s the thing. Don’t you think that Czech cities lack a bit of courage? Of course they do. We don’t complain, we have done some beautiful projects, but Prague is slightly more old-fashioned, it is not easy to push something through here. Not all conservationists here are enlightened, they strictly stick with the rules, everything must be inside the lines. I understand that it is important, but there are places where a sculpture-like house could be

constructed, that everybody would come to see. For instance, I still feel sorry that the Kaplický library has never been built. There should have never been a competition for that, it should have been given to Jan Kaplický directly. How do you recognize high quality architecture? For me, it means mainly functional architecture. You can always have a debate about the façade, some love the Dancing House, some hate it. Some are excited about Willa Tugendhat, for others it’s just a shop window. Every person is different, we will never agree on this, which is good. The outer shell is like a painting – each architect will go about it differently. We can speak about what’s nice and what’s not, but there is no polemics about the interior. It either works, or it doesn’t. And how do you find out? When you construct a house, you want to grab the handle and know that you are heading to the living room and that you won’t find yourself in the toilet. Inside, you need to find your bearings intuitively. This is something that many constructions of today don’t have. And this is, for instance, what the success of the Maldives is based on. You find what you need everywhere, because it simply is there. You come to the swimming pool and tell yourself, that there should be a bar there – and there it is. This is good architecture. However, everyone looks at a building from the outside. Yes, and this is the mistake. Look at Frank Gehry. He works as a sculptor and his constructions are great from the outside. I love the Dancing House, the finishing, the movement, pure beauty. But inside, the house just doesn’t work. In 1996, Eva Jiřičná and I made its interiors, but they are so complex, that it was almost 17

High quality architecture can be recognized by the interior. It either works, or it doesn’t.

Tavaru Restaurant & Bar, Maldives impossible. That is why today, my view of architecture depends mainly on whether I would like to live or work there, and we design spaces where we would really like to move. Don’t you feel tempted to build another Dancing House, which would make you immortal? The fact that Frank Gehry built the Dancing House here was a miracle, which will never happen again, because today, nobody would allow you to build it anymore. Firstly. Secondly, I am much more satisfied with having constructed an island in the Maldives, which was declared the best resort of the world in 2014. It is still among the best five today, and whenever I come there and speak with the guests I find out that they are extremely happy. They invite me for a coffee and want to chat about it. And this is the best reward for my work. How do you choose jobs? I am not a young boy anymore, so I chose the job where I feel that the client will appreciate the energy I will invest in it and that the result will be worth it. When we accept a job, for me it means work for three or more years, and I need to know that I will enjoy it. What are you currently working on? At the moment we are working on a really nice project in Nova Scotia, Canada. It is called Red Head and consists of 14 houses sitting on a cliff with the view of the ocean. The first one is already built and we are preparing the second one right now, which will be even more daring. Same as Czechs build their houses in Croatia, this is ideal for people from New York, which is an hour flight from there. Silence and nature, then? Yes. It is a hugely relaxing place; in four days there you get as relaxed as you would somewhere else in a month. You sit, watch the ocean, moose walk there in the morning, you 18

Architects here have the same freedom as abroad, you just need to chance upon a client that will have the courage to experiment.

Red Head, Nova Scotia, Canada

see whales on the sea surface, golden eagles nest there and there are three golf courses nearby, which are among the best ten in the North America. It is the complete opposite to the hot Maldives. It is a charming place, and although now I don’t like travelling anymore, I do like to go there for a day or two. Even when I work, I perfectly clear my head there. Your projects have one thing in common – the investors are often Czech billionaires. Why do they hire you? I think we provide services that other architects don’t. We are able to do anything turnkey anywhere in the world. And we are able to keep the agreed deadline and budget. Logically, they are very intelligent people, so we have very long inspiring conversations. This is what I like about it. Would you be able to turn down a billionaire? Yes, we have already turned down a few such jobs. The wealth of a client does not make a difference. When you don’t feel that it will lead to a good end, it is better to decline the order right from the start. Because otherwise you will both suffer. Clients now don’t come to us because we are architects. We are like the one work of art that you see in a gallery, you pass by, pick up the phone and call us saying you would like to have it, too. That is the moment you know that you have similar aesthetic perception, that you are on the same wavelength. Which of your constructions are you mostproud of? In 1993, I built for myself a small house, on the edge of Prague, in Dolní Chabry, which attracted a lot of attention. It took an extremely long time to get the permission, we argued with the conservationists whether a flat roof could be there or not. There is a church in the back, which is visible thanks to that, and moreover we

maintained the small scale of the surrounding houses, because it still has a village-like nature. I think it is great, it even won lots of prizes abroad. I sold the house after 25 years and I have to say that I was so sorry about it. When I entered after all those years, it still spoke to me. For me, this is enough. I thought you would speak about the luxurious resort Velaa, which you built in the Maldives. Sure, of course I am pride of Maldives, after all, I spent four years of my life there. The first time we arrived in 2011, there was absolutely nothing, just bushes and small fields of the natives, so we had to bring in everything – each and every little screw. However, every well done work that makes people happy, is great for me. When we finish, my client and I shake hands and tell each other that it’s good, that’s what makes me happy. I am not the kind of person who longs for a monumental construction that will remain here after my death. What is Velaa like after five years in salty water, tropical climate and monsoons? Did it last? It still looks great. And I am proud of it, because we had to think of every detail so that the difficult weather conditions near equator had minimum impact on the maintenance. I said to myself that if we put a little bit more money into it, it will pay off. And now it’s confirmed. When you finished the island you had many similar offers. Are you building anything similar? We are in the middle of negotiations just now on a similar project in the Caribbean. And as for the Maldives, we had about three offers, but I didn’t feel that we could make such a unique thing out of any of the offers. It always turned out that investors want to build a low-cost project and use our name. And I didn’t really feel like building a three- or a four- star hotel in this 19

region. That’s what I was talking about when I spoke about waste of energy. But they say you can’t say no. I have quite learnt it by now. Or, I haven’t learnt it yet completely, but I am getting there. I want at least one day in a week off, not on telephone, just to have some fun and be with my family. This comes with age. When you are young, there are challenges ahead of you and you want to do everything and show yourself that you can. Who influenced you the most after the revolution? I had the fortune of getting to London at the beginning of the 90s, to Eva Jiřičná, where I had all my gods at hand – Foster, Rogers, Calatrava, Grimshaw, Kaplický and Jiřičná. And I met them all. I remember Nicholas Grimshaw coming to me at an exposition of Santiago Calatrava and saying: “Hey, and is this already built, or is it just a project?” And what did you say? I wasn’t able to reply, because my Mr. Big spoke to me. I was looking up to him. There was no internet then, so we bought books and tried to imitate details. And is your style close to any of them? At the beginning we were massively influenced by Eva Jiřičná, who I appreciate a lot. But you get older, develop, and start to walk your own way. You end up by creating your own style anyway. What is the one of yours like? Few people know exactly what they are at the beginning. Many clients are not able to identify it correctly at first – and this is our task. To identify it. Now we mostly sell experience, because we can say: “We did this similarly to another client and he was redoing it after two years, because it didn’t work.” Everyone always wants to see visualisations of the roof and little windows, but we start from the layout and interior. And only when we agree that it is working inside, we show them the shell. Do you often struggle with clients to make them more courageous and not to limit your creativity? I always tell my clients: “If you want us, you need to take time to sit with us and talk about it. We are here to make your dreams come true and I need to find out what they are like.” We need to find out how far we can take the limits of courage. Sometimes courage is even when you have just a few millions on your account and come to us because you want to build a family house. And we say: “we’ll give it a try”.

PETR KOLÁŘ Architect and co-owner of the ADR architectural studio, which he founded in 1992 with Aleš Lapka, his schoolmate at the Academy of Arts, Architecture & Design Prague. His constructions can be found in approximately 30 countries, the most famous ones being a part of the Waltrovka residential complex in Prague, Open Gate School, Czech Olympic House in London 2012 and the luxury resort Velaa in the Maldives. Among his clients are most Czech billionaires and Kolář admits that he built something for at least eight out of ten richest Czechs. He loves riding his Harely and became obsessed with heliskiing in Canada. His brother (Petr is five years younger) is Pavel Kolář, a renowned physiotherapist. Do you have a dream in your head? A dream of someone coming, knocking on your door and giving you the job of your life? No, I don’t. I make my dreams come true. I collect art, meet artists, from time to time I buy something. I have just bought a sculpture by Tony Gragg, which I had been longing after for eight years. So I don’t just sit here waiting for someone to come and tell me they want me to build a football stadium. No, everything we do is interesting. Actually I don’t really know if I would like to build a skyscraper for instance. And if I had to choose whether I want to build a skyscraper at the outskirts of Prague or a small house in Canada, I’d stick with the house. How come? Because it’s more fun for me. And that’s what it’s all about. It just has to make you happy. I choose the projects I want to do. If I build a skyscraper in Prague, the developer will be wanting to save money and we will both feel miserable because the result will be inconsistent. That’s why I tell my children: “Do what will make you happy. And when you go to work, try to make it as much fun as when you go for a walk in the forest or for a swim in the river.”

Radim Kotlaba, Counsel and Lucián Staněk, Layer, KPMG Legal rkotlaba@kpmg.cz, lstanek@kpmg.cz

WHO WILL BENEFIT FROM THE NEW BUILDING ACT? L

awyers from KPMG Legal evaluate a significant Amendment to the Building Act, which will be in force from next year. Its authors expect that the Amendment will make the construction process easier. But will it really be easier? A significant Amendment to the Building Act and related regulations will be effective from January next year. We will find it in the Collection of Laws of the Czech Republic under number 225/2017 Sb. and its authors expect it to simplify and speed up the zoning and building permit procedures. The Amendment will definitely improve the situation for small builders. For instance, from January, it will be possible to build family houses without limitation to the building footprint with only a notification. Till now, it has been possible to build family houses in this simplified way only up to a building perimeter of one hundred and fifty square meters. For the realization of larger family houses, it is necessary to obtain a zoning and building permit, which often demands excessive administration and time. The Amendment will also introduce administrative simplifications for some small constructions, like swimming pools or greenhouses up to forty square meters. It will be possible to build them with absolutely no formalities, if they are located at least two meters from the land property boundary. In the built-up areas of municipalities, it will also be possible to build fences of up to two meters high without paperwork, provided it doesn’t border a public road or open space.

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Will the amendment really speed up construction? PROCEDURES MAY BE COMBINED INTO ONE The Amendment also introduces a number of interesting improvements for developers and other large builders. From January, not only will it be possible to combine zoning and building procedures but also the environmental impact assessment, if required for the given intent, into one joint procedure. According to lawmakers, the procedure should simplify and speed up the construction of mainly industrial, residential and infrastructure projects. The result of this joint procedure will be one joint permit, applying even to an en block complex of buildings. The new joint process will be an option for builders, not an obligation – they will still be able to carry out individual procedures separately. Having said that, it is still a question whether builders will use the option of the joint procedure in practice. This is mainly owing to the volume of paperwork. For separate procedures, most remarks by the authorities concerned will already be settled within the environmental impact assessment or within the zoning procedure. At this stage, the paperwork for the intended project is not as detailed as in the building procedure, and so it is easier and cheaper to adjust. On the other hand, the content of documents submitted for the joint procedure must correspond to the building procedure project, and so they are much more detailed from the very beginning. Then, if the documentation needs to be adjusted during the joint procedure (which is almost certain for larger projects), it can be more complex and more expensive than if the individual procedures were carried out separately. Lawmakers presume that builders themselves will be able to evaluate the risk associated with the preparations and adjustments of paperwork in the joint procedure against the benefits of faster start and completion dates. It will be interesting to track the options preferred by developers in the future.

WILL THE AMENDMENT IMPACT THE ENVIRONMENT? However, some aspects of the Amendment have attracted criticism. The Amendment terminates the rights of associations to be involved in the fulfilment of legal conditions in zoning and building procedures. Associations will still be able to take part in the EIA but this is carried out only for specific constructions. The above indicated change reflects the hope on the part of lawmakers to speed up the construction of transport infrastructure. On the other hand, some serious criticisms are being expressed concerning the risk of permits being issued for environmentally hazardous projects if there is no oversight by the wider public through the participation of associations. This risk is reported as particularly high especially for mid-sized constructions including halls, garages, parking lots and malls, which, as opposed to large infrastructure and industrial projects, are not subject to environmental impact assessments. Apart from this, concerns have also be raised that the termination of the rights of associations to take part in the zoning and planning procedures is a violation of the Constitution of the Czech Republic and the Charter of Fundamental Rights and Freedoms. The relevant part of the Amendment has been referred to the Constitutional Court, and the question of termination or retention of associations involved in the procedures is now in its hands. Will the upcoming Amendment to the Building Act really simplify construction? It definitely will for small constructions from garden swimming pools to family houses. However, only practice will show whether this will be the case with development projects and industrial or transport infrastructure. And it will be shown to considerable extent independently by the position of the Constitutional Court on the criticized part of the Amendment. 23

Lukáš Rozmajzl, Sharry Europe

THE SMARTEST OFFICE The chief C aim of smart offices is productivity

reating mobile apps for budding Silicon Valley startups, the people of Prague’s STRV offices get to see the birth of top-notch technology first hand. But, to be precise, it is their feet that come into contact with some hi-tech inventions as well when they are zooming along the 5 500-square-meter office using electric skateboards called Boosted boards. Powered by a rechargeable battery, these handy skateboards allow you to go as fast as 35 kilometers per hour, easily scale a hill or stop right where you are using a hand-held controller. The STRV’s main office is packed with gadgets and technology. “We have Facebook’s new VR device, the Oculus Rift, in our offices. But the biggest investment so far was a computer upgrade – we gave all our developers the latest Macbook Pros because we believe that you need the best tools to achieve the best results,” says the company’s co-founder Lubo Smid when asked about their latest tech additions. The Prague-based development studio thus stays true to a long-standing trend of a symbiotic coexistence when it comes to cutting-edge technology in offices. After all, it was this approach that helped them receive the “Smart Office” title in the CBRE’s prestigious competition “Meeting Room of the Year” with the world-renowned architect, Eva Jiřičná, acting as the president of the jury. When asked about what a “smart office” mean to him, STRV’s Lubo Smid describes it as “a space that makes use of current technology to help the team work more

efficiently and make their time spent in the office more pleasant.” TECHNOLOGY ALL AROUND Of course, the idea of a smart office isn’t just about fun gadgets like the electric skateboards or VR goggles. You can also see its elements when you, say, go to the office restroom. Imagine a paper towel holder equipped with a smart sensor capable of automatically ordering a new pack of towels when necessary, while also helping the cleaning staff keep track of which toilets are used most often and thus letting them adjust their cleaning schedule accordingly (See the next double spread for more smart office components). “A smart office uses technology to automate the routine, daily tasks in order to truly optimise the way we work. This results in an increase in productivity, since employees can devote more time to their real jobs – to tasks that cannot be automated,” says Luka Birsa, the co-founder and technical director of the Visionect company specializing in digital signage, in an interview with the Business News Daily. Michal Gróf, the commercial manager of the U1 architectural studio, who has already created new offices for more than 30 000 people in total, agrees with this sentiment – he, too, considers increased productivity one of the key benefits brought by smart offices. “A smart office has a lot of benefits for a company – it’s a time-saver, it makes communication easier, employees are happier and more loyal, the company is more attractive from an HR

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perspective and together, all these factors result in increased productivity,” says Michal. And of course, time is money – money that a company can save by having an indoor navigation technology preventing employees from getting lost in the building, or by letting an automated system switch off the lights above an empty desk. “Plus, the benefits of a smart office are pretty much the same for employees, even when perceived from their point of view,” he adds. A COZY OFFICE The concept of a smart office mostly arises from the rapidly developing Internet of various sensors, chips, beacons, and all of the other devices that can be connected to the Internet. According to predictions made by analysts from Gartner, up to 26 billion devices will be globally interconnected by 2020 (and Cisco even goes as far as to estimating double this amount). But according to Josef Šachta, a co-founder of Sharry Europe, a company developing software for smart buildings, the main issue of modern offices lies in the integration of various digital systems. There are many different software solutions for each area, be it parking, reception or navigation, but it is the interconnection of these systems that is missing. Nevertheless, another very important novelty, the so-called activity-based workplace, or ABW for short, is already making its presence felt. When applied to an office interior, this layout offers different types of environment for different types of activities. That means quiet, secluded spaces

where one can focus or take care of a phone call in peace on one hand, and creativity boosting areas on the other, where you can sit in a nice, comfortable bean bag, draw on walls or pluck at the guitar while brainstorming. Working eight hours a day, every day, in the same spot, is a thing of the past. Petr Ludwig, author of the bestselling book “The End of Procrastination”, recommends choosing a different desk every day instead. “I know that some people feel the need to “nest” somewhere. So, they pick a desk, put up a picture, then another, and all of a sudden there are ten of them and their workspace is covered in their favorite plush toys. But that is not going to make you productive,” he said in an interview for Hospodářské noviny. But modern tech already has an answer to the “nesting” problem as well. Using a mobile app connected to beacons or a VLC (visible light communications) system made by Phillips, you can easily tell when a person arrived at their chosen workspace and adjust the lighting colour or intensity, the temperature, or even the smell according to their preferences. And as far as family portraits go, that is something that can be easily solved with a digital photo frame.

12 tips for a smarter office

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HI-TECH PLANTS Parrot, a company from Australia, has declared war on withered office plants and created special Flower Power sensors. All you need to do is stick one into the flower pot and you’ll receive a handy notification whenever it is time to water your leafy companion. The sensors also keep track of temperature, sunlight, and the amount of nutrients in the soil.

LAUNDRY ROOM This service is rather rare, but can be found in some office buildings in the Czech Republic too (the Five building in Prague has one, for instance). Gone are the days of managers asking their moms to do their laundry! All they need do is leave their dirty washing in a special locker, order the laundry service via their phone, and come to pick up their clean shirt or tie the very next day. One of the providers of this service in the Czech Republic is called LaundryBox.

MEETING ROOMS Imagine a two-hour meeting that has ended 30 minutes early, but the system still thinks the room is booked and therefore unavailable for other users – I am sure we can all relate to that. Luckily, there are special sensors that can be placed on the lightbulbs or along the walls to help you with that, allowing you to check if the meeting room is currently free or who is in there in real time. The software can also automatically adjust the temperature and the supply of oxygen according to the amount of people in the meeting and let you choose the lighting that will best suit the meeting’s atmosphere.

SMART FURNITURE The market is full of furniture or accessories allowing you to adjust the workspace according to each employee’s preferences. There are pull-out divider screens to provide more privacy in an open space office, or adjustable desks for those who want to have an option of switching between working sitting down or standing. And you can forget about those hand-written meeting notes – the digital flip-chart will automatically share them online for you. And if you want to go even further, “smart walls” will allow you to draw and write on them over and over again thanks to a special paint.

POWER FROM THE PEOPLE In many an office, you’ll see a turnstile being used as an entry monitoring device. Now, let us forget about various ways to identify a person for a moment (chips, codes, biometric data, their phone, an arm implant…) and try to think of these stiles as of potential generators using every passing person as a source of energy. That is exactly what the designers form the China’s Guangdong University of Technology thought too before designing the Green Pass turnstiles that can store the energy from each turn and then use it to power other systems in the building. Stationary bikes in your company’s gym could also be used like that.

INNOVATIVE ELEVATORS Do you think there is not much space left for improvement when it comes to elevators, maybe apart from their design? Think again – the German company ThyssenKrupp is already testing a new, innovative system of “multielevators” capable of both vertical and horizontal movement, with a potential to drastically change the way high-rise buildings are designed. The first horizontal elevators could be out as early as 2019.

SMART MIRRORS Your employees will probably not be able to help it but to think of the Snowhite’s tale once you have some smart mirrors installed in your office. These work just like normal mirrors, but they also have a display unit hidden inside, so you can display any content you like throughout the whole day, be it whatever is on TV or a stream from social media.

PARKING MADE EASY Smart parking systems can deal with a variety of tasks – reserving a parking spot, monitoring who enters the building, providing directions or automatically logging an employee into the company’s time and attendance system is not a problem. Some companies are even thinking about renting their free parking spots to the public, especially during weekends.

DIGITAL SIGNAGE You could say that modern office buildings are a special type of medium – they can communicate with their users via big-screen TVs at the reception, smart mirrors in the bathrooms or even the screens of their own smartphones. The content of the messages they deliver can be tailored to each user and changed according to the time and place it is being shown.

SMART LIGHTING Daylight is irreplaceable, which is a fact confirmed by a survey conducted last year by the Erste Group Immorent. According to their data, 48 percent of respondents would not agree to work in a windowless office, even if it meant a significant increase in salary. In a smart office, however, you can easily change the colour or intensity of the artificial lighting using your smartphone, just like with the Phillips smart bulbs, while yet other types come with an inbuilt system for locating people (VLC). Apart from all that, use of light waves for wireless communication (Li-Fi) is also currently being tested.

SENSORS A Czech-based startup called Spaceti has come up with sensors that, apart from locating people in the building, are also capable of measuring the temperature, humidity, noise level or the amount of carbon dioxide in the air using so-called beacons. These data can then help companies save money and adjust the working environment according to their employees’ preferences. “We are also close to launching mass production of passive sensors that can tell which seats (in a co-working space, for example) are free,” says the company’s spokesperson Do Thu Trang.

MOBILE APPS Mobile apps are a key tool that gives the user access to a wide variety of services. Take Sharry Europe’s mobile apps designed for office buildings, for instance. You can use them to book one of your company’s shared cars, bikes or scooters, check what’s for lunch in the nearby restaurants or discover interesting events around you, book the dry-cleaning service and see the schedule of the tram that takes you home – all with just a few taps on your smartphone’s screen.

real estate Pavel Kliment, Partner, KPMG Czech Republic, pkliment@kpmg.cz

KPMG IS BUILDING A MODERN OFFICE IN PRAGUE R

econstruction under full operation conditions and a vision of a modern building – that’s what lies ahead for KPMG Czech Republic Prague office. Why have we chosen this way and what do we expect from the change? We moved into the building in Florenc, Prague at the beginning of the Millennium. The form it was built in more than fifteen years ago has been preserved until now. Now the time has come for a change. Current employees already have different requirements for their working environment. KPMG hires more than one hundred graduates every year, and it has been mainly this young generation who has not been really excited by the current premises. With the lease agreement in Florenc expiring soon, we have been thinking about what to do. One of the options was to move the whole company to a new building, but in the end we decided to remain in the existing one. It is in a great location close to two metro lines, trams, the arterial and many excellent restaurants and cafés. We also wanted to choose a sustainable solution. Figuratively, we won’t "wear down" one house and when it stops being convenient, we won’t move to another one. We chose an unconventional solution – reconstruction while maintaining the full operation of the company. We moved a part of the audit department to

alternative premises; the others have remained in the building and are moving depending on the floor currently under reconstruction. Noisy work is done mostly during the weekends and outside working hours, so our people can work in peace. Besides a new design, the arrangement of the offices will be new as well. A utilization analysis of workplaces has shown that most of them remain unoccupied for several hours or even days. Our employees spend quite a lot of time directly with clients. That’s why we have chosen a partial flexi-seating arrangement – especially for colleagues who often spend time outside the office. On every floor, there will be activity based seating areas – employees will choose the desk depending on the activity performed. For team work activities, there will be meeting rooms of different sizes. Where it is necessary to concentrate and work alone, employees will be able to use focus rooms or calling rooms Visitors will be able to enjoy themselves as well. We are building a representative VIP client zone on the top floor with a beautiful view of the hundred-spired Prague and the Castle. The foyer with a brand-new reception desk will be enhanced by sculptures by one of the most famous Czech sculptors Čestmír Suška. We will welcome our clients and visitors in the new environment during 2018.

REVUE

n award-winning hip-hop musical from Broadway in London, a new museum of the fashion designer Yves Saint-Laurent in Paris or the first large Italian exhibition of Art Nouveau prepared by Czech curators. Come with us on a journey through the most interesting cultural events, which will take place in the European metropoles from November this year until January next year.

SAINT-LAURENT Paris, France, from autumn 2017 Fashion designer Yves Saint-Laurent has influenced the style of millions of women. With his life being so tightly linked to Paris, it is here where a new museum dedicated to his career will be opened. You will find it at Avenue Marceau, where Saint-Laurent created a number of his iconic collections.

ART NOUVEAU Trieste, Italy, until January 2018 The very first exhibition of Art Nouveau in Italy was prepared by Czech curators in the Italian city of Trieste. Art Nouveau is shown to the Italian audience by two hundred works from the collection of the Czech Museum of Decorative Arts in Prague. Apart from Alphonse Mucha, it presents works by Jan Preisler, Gustav Klimt and Jan Kotěra.

HAMILTON London, Great Britain, from November 2017 A hip-hop musical which won 11 prestigious theatre prizes Tony in Broadway, New York, tells the story of Alexander Hamilton, one of the American Founding Fathers. The author and the main star of the musical is the rapper Lin-Manuel Miranda. It will be performed in Victoria Palace Theatre, London.

DALÍ / DUCHAMP London, Great Britain, until January 3, 2018 You can compare the styles of two leading figures of Surrealism (Salvador Dalí) and Dadaism (Marcel Duchamp) at the Royal Academy of Arts in London. As the artists were close friends, you have the possibility to find their correspondence at the exhibition, where they touch on their common interests – erotica, language, optics and games.

CAMILLE HENROT Paris, France, from January 7, 2018 The autumn of 2017 in the Paris gallery Palais de Tokyo belongs to Camille Henrot, a French artist living for her whole life in New York. The entire exhibition space of the Art Deco building will be filled with another series of the so-called Carte Blanche exhibition. Henrot invited artists David Horvitz, Maria Loboda and Samara Scott and the poet Jacob Bromberg.

LULU Vienna, Austria, December 2017 In December 2017, The Vienna Opera House, which belongs to the world’s best opera houses, will be performing the premiere of Lulu by Alban Berg. This dodecaphonic opera is considered one of the key works of the 20th century. Agneta Eichenholz will play the main role, and the conductor will be Ingo Metzmacher. 31

EUROPEAN STAGE

Anna Batistová

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I GET MY BOOK THEMES FROM MY DREAMS U

ntil 2007, he had been disguised as his alter ego, Odillo Stradický of Strdice. However, it was only the books written under his real name that brought him true success with readers and critics. After the historical fictions Pérák, Mummy Mill (Mlýn na mumie) and An Angel’s Egg (Andělí vejce), Petr Stančík is now working on a detective story set in the present day. “It will be called Zerocorn (Nulorožec) and it is to be published within a year and a day," reveals the Magnesia Litera Prize winner whose works are characterised by special dream logic. You are currently writing a novel with a remarkable name: Zerocorn. What is it about? In Zerocorn, I am elaborating on an old idea of mine – breeding rhinos for horns. These are skin derivatives growing back quickly with a suitable diet, so these adorable animals don’t need to be shot. Zerocorn is a detective novel set in the present day about a twelvefold murder of rhinos. However, this is just a pretext; the book is mainly about getting to know oneself. I won’t reveal more though. As a typical Gemini, I am working many books at once, usually about ten. For example, today, I was thinking about writing a sequel to Pérák. I am also planning another story of Commissioner Durman [the main character of Mummy Mill]. Taking place in a Jewish town, it will involve Durman investigating a serial kabbalistic murder. Indeed, I am also preparing books for children – just now, I am writing another story of Chrujda the Badger (Jezevec Chrujda). Working on ten books at the same time, is what you are writing reflected in your everyday life in any way? The theme usually manifests itself in me in one way or another. When I was writing Mummy Mill, I was very much absorbed in 1866 and I was always surprised by things that didn’t fit in it, such as mobile phones or the Internet. By the way, I can’t really implement these things in my books. Even in a present day detective story, nobody has a mobile phone. I do use one myself, but I am somewhat disturbed by the technology. I still remember the times when there were no

mobile phones, and it was much more pleasant in a way. For example, people stuck to their word and when they promised they would come somewhere, they did. Or they didn’t and it was bad. These days, people usually rely on postponing or cancelling meetings at any time. Of course, modern life has its benefits as well, but I think I would prefer living in the 19th century. Do themes come to you or do you need to search for them? I have so many themes I don’t even think I am looking for more. They grow in my head by themselves. Dreams are a great source of inspiration for me. I record them, collect them and sort them into categories – mainly erotic and normal dreams. It’s because dreams need to be captured. After many years of experience, I have learnt that if you don’t record the dream immediately in the morning, you will forget it. The dream’s structure is so incompatible with common everyday logic that it doesn’t stay in your memory. That’s why I capture it and my stories then resemble this dream logic. Can you tell us what your writing routine is like? When and how do you write? I have been freelance for a year and a half and it has been a great relief. I don’t write regularly. Sometimes I write twenty pages a day, at other times I procrastinate. I worked as a copywriter before and I thought you could do two things at the same time, but now I know it was a mistake. A writer needs to focus on writing, even though my income has dropped a bit and there is more financial insecurity. And my method? Before I started writing, I bought a beautiful Remington typewriter at an antique shop. It was kind of a muscle strengthener. There was a major drawback to it though. I keep rewriting texts. I need to see them written, and then I rewrite them over and over. When I was using the typewriter, I was making some kind of collages. I cut out words and stuck them down, added whole pages in writing and the manuscript looked like a puzzle. My first publisher, Ivan Wernisch, liked them very much and told me he had sold them to the Czech Literature Museum. Since I got a computer, there 33

The State Security tempted me to publish a book. I said I’d wait till the regime falls and was slapped.

profoundly shaped my writing. I consider Michal Ajvaz one of the few Czech writers who are able to write prose. What was amazing was Ivan Blatný by Martin Reiner. I also like Bogdan Trojak; he is my friend, but I also think his works are among the best quality books recently published. As for international authors, my greatest inspiration has been Jorge Borges. I quite like Umberto Eco’s older works. And I have also got back to Tim Powers, a very good fantasy author. Fantasy is considered a frivolous genre in the Czech Republic, but I like it. I believe Frank Herbert’s Dune is one of the best books not only in this genre, but in general. There is everything in it. If someone was to read only one book, I would recommend this one. Until 2007, you were using a pseudonym. Why? I experienced many things with Odillo Stradický of Strdice. I came up with this alter ego of mine as early as in 1983 when I was fifteen, so I spent about twenty-three years with him. Back then, I was very interested in astrology and occultism. As Odillo, I cast my horoscope and calculated my death date. It is not ethical

My library is a maze. I’d rather borrow a book than look for it.

is not much special about my writing. At one point, I used to write lying on my stomach, but then my elbows got sore. Besides that, my dog kept crawling onto my computer, so I am afraid that a part of my last book was written by him. How did you get from copywriting to writing novels? I don’t remember wanting to become a writer. When I was a little boy, I wanted to become an astronaut or scientist. Then when I was 15, I started reading poetry, mainly decadent poems by Jiří Karásek of Lvovice and others. However, I didn’t have the ambition to do literature systematically. Moreover, when I was at the age when people start writing, it was quite unrealistic to get something published. The State Security was luring me into cooperating with them; promising I would be allowed to publish a book. I told them I’d rather publish the book when the regime falls, and they slapped me. This is exactly what happened then though, even though I was at quite an advanced age to start writing. Even after that, writing was more of a hobby for me. I only became a true writer a year and a half ago, when I decided to make writing my full-time job. You grew up as the child of two teachers. To what extent did the books read at home influence your taste in literature? Very much so. My parents were well-read in spite of being athletes – PE teachers. Besides that, my father specialized in Mathematics and Physics and my mum in Russian because she was the daughter of a Russian soldier, a Red Army man who was shot dead on 10 May during the liberation of Prague. It’s the one Václav Hrabě wrote about in Blues for a Crazy Girl (Blues pro bláznivou holku). My Mum was great – when I was at a summer camp, she was writing an episodic sci-fi story for me about Fairy Amálka flying in space in a tree spacecraft. It was her who bought me my first books. For instance, she got me Tolkien’s The Hobbit with beautiful illustrations by Jiří Šalamoun. I like the book even today. She also used to bring me to used bookstores; I even became a used bookstore addict at one point. I spent a lot of time there inhaling the smell of mouldy paper and old leather bindings. Do you still go there? Not so much. My library has become so enormous, I mustn’t buy any more books. I promised. My library has become such a maze that when I need a book that isn’t exactly on the top, I’d rather borrow it from a public library. It’s faster than searching through the Borges' labyrinth, the library of Babel. What books do you read? Do any authors inspire you? I haven’t been reading much recently because I write a lot. I have a stratum of books in my library that I would like to read. Even though I am sceptical of contemporary literature and art in general, I have a few favourite authors. All my life, I have admired Ivan Wernisch who has

to calculate it for other people, but you can do it for yourself. The result was 26 December 2006. I even wrote it on bookmarks and instead of birthdays I celebrated deathdays. Fun, fun… And then in 2006, I actually nearly died. Something happened to me, they haven’t found out what it was. Blood poured out in my chest and I woke up in the ICU. It was in November 2006, not in December – so I didn’t expect it. My prediction was not too bad though. I was clinically dead for two and a half minutes, so Odillo really made it. And when I nearly met my destiny in this way, I realized I no longer needed this decadent and pseudo-aristocratic pose which mainly used to be an effective defence against the small-mindedness of the Communist regime. I had moved on, so I buried Stradický. Unfortunately, it also meant I stopped writing poetry. It was not calculation. It was Odillo Stradický who wrote poetry, I am not great at it and don’t want to push it. In An Angel’s Egg there are three poems though, and I think they are not bad. But it was rather Stradický’s voice from the other world in me. What is related to your alter ego is your fancy for history. You are mainly interested in the Late Middle Ages. What’s so attractive about it? The period of the reign of Charles IV, Wenceslaus IV until the reign of George of Poděbrady was a fascinating time; full of reversals and mysteries. Back then, our country was a great power. Charles IV built Prague’s New Town like the New Jerusalem. In its centre, where in Jerusalem there is Solomon’s Temple, he exhibited relics from the coronation treasure and he realized it would be good to have a holiday to mark them. He sent a delegation to the Pope who immediately complied and declared a Day of Jesus Christ’s Holy Nails and Lance. Back then, you just snapped your fingers to make the Avignon Pope dance. When you compare it to modern times, there is really a huge difference. I also like the Late Middle Ages because it was a beautiful period with Gothic architecture exposed in the best light. They had already mastered building technologies to the extent that they could afford to play around – for instance, they didn’t make vault ribs seamless; they pretended they had been broken and fixed. It was kind of a decadent period. Mummy Mill, your most successful book so far, takes place in the period of the Industrial Revolution. You wrote it as a historical thriller with elements of gastronomy and pornography. Was this form based on a historical research of this period? It is partly due to the period since in the 19th century both food and drinks and sex were much more important parts of life than they are these days. The pleasures and pastimes we are surrounded by now didn’t exist. There was no TV, Internet or lightbulbs, so when it was getting dark, there was nothing else to do but have sex. And as unbelievable as it sounds, back then everyone slept in one bed, including the children.

Sex was not such an intimate thing as it is nowadays. The main character, Commissioner Durman, also keeps going to brothels. In his social class, let’s say the middle class, there was no premarital sex. The nobility or lower classes could afford it, but good girls kept their knees together and when they didn’t, there was always their Mother to see to it. And when someone is twenty-five like Durman, he simply needs to let off some steam, so he had no other choice but to go to brothels. Brothels were very cheap, sex was a consumable activity. They were visited by soldiers and students, so it cost like a lunch at a restaurant. I would like to say that in Mummy Mill, I wanted to compensate for this layer of pleasure by adding mystical and spiritual moments, so it wouldn’t be so one-sided. Unfortunately, I sometimes feel that some readers and critics didn’t dig through the layer of food and sex, which is of course their right. I nevertheless believe that had they dug through it, they would have got to much more interesting pleasures than those primary corporeal ones. We will conclude with your last book for adults – An Angel’s Egg. It is inspired by the story of your great-great-grandfather. Is it closer to you than the other books because of that? The main character of An Angel’s Egg, Augustin Hnát, is a synthesis of several members of my family; it’s mostly my ancestors. Augustin Stančík was my great-great-grandfather. My great-grandfather was Leopold; Leopold Durman from Mummy Mill was named after him. However, Augustin Hnát also includes some features of my great-grandfather Leopold and grandfather Bohumír. One could say it’s kind of a family chronicle. It’s always the book that I am writing that is most important to me. PETR STANČÍK Petr Stančík (* 1968) was born in Rychnov nad Kněžnou. As a writer, he covers several genres writing books both for adults and children. For his novel Mummy Mill, he was awarded the Magnesia Litera Prize for prose in 2015. His texts have been translated into several languages. Aside from literature, he also deals with the history of the Late Middle Ages.

Pavel Kalouš

A CONCRETE PROPOSAL C

ommunist housing estates didn’t make a good name for concrete. Today, however, we are witnessing its renaissance and sharply growing popularity. Let us show you why and how you should include concrete in your interiors. Whenever designer Ivanka Kowalski feels that the interior she is designing looks too luxurious or too pretentious, she uses a proven twist – adding a few concrete elements. "It is wonderful for dressing down an interior which is too ornate. The contrast sort of breaks up the space," smiles Kowalski. She is not the only one to fancy concrete. In recent years, people have become increasingly keen on the chilly material and no modern interior can do without it. There are several ways to introduce concrete into your apartment: from un-plastered walls and ceilings, perceived as unfinished in the past, through concrete effect paint to furniture and accessories. "I think that people who would reject raw concrete on their ceiling five or ten years ago do not see such a problem with it anymore. Before, they would have it done in their cellar but not in their bedroom. Concrete offers advantages similar to wood, the only thing is that it is grey. And people no longer mind grey, either," says architect Tereza Froňková. Apart from serving as a good contrasting element, there is another great advantage. Concrete can break up boring single-coloured surfaces because concrete itself is not single-coloured at all. "Concrete is a living material, it is textured and colourful, so it never looks like a single-coloured slab. There are dozens of shades of grey and sometimes a defect, which makes it livelier. You can see that it is a textured natural material, which makes it more creative than four white walls," adds Froňková. Today, you can have anything made of concrete, including things like bathroom sinks. Special waterproof mixes make sure it resists both water and more aggressive

liquids like coffee, so you can go ahead and use it for your kitchen counter, for example. Moreover, as it ages, it develops a patina, which makes it more attractive; the same cannot be said for metal or wood. You only need to watch out for two things. First, do not plaster concrete all over your house, combine it with other materials. "Less is more" is very true in this case. "Use it carefully, don’t have too much of it. The interior would look too raw, industrial and cold," advises Kowalski. Second, you have to think of the weight and structural stability of your building. Tereza Froňková prefers ordinary concrete plants, where they can cast anything out of concrete for you. A table from there will look fabulous, because standard heavyweight concrete is the handsomest, but it may weigh up to several tonnes. Nevertheless, there is a solution. Jiří Peters and Ladislav Eberl are two friends who in 2012 established the brand Gravelli and started making designer concrete furniture that could not be made before then. Peters is a civil engineer who was absolutely fascinated by concrete at university. He spent long months mixing various blends, until he came up with a type of concrete which is extremely thin and light but resistant to cracking. The trick is to add fibreglass to the mix, apart from the usual cement, sand and water. "Architects have been accustomed to the fact that anything made of concrete is at least 8 centimetres thick and weighs a ton, so forget putting it in an apartment on the sixth floor. And there we were with light concrete products, which were resistant," explains Eberl. INTERIOR CONCRETE Rounded silhouette, firmness and resistance. Let’s take a look at how people at Gravelli work with this unconventional raw material in interiors. Jiří Peters and Ladislav Eberl describe the design of several products.

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TABLE The slab is only 15 millimetres thick, which makes it curl when drying, so it must be straightened during maturation. Apart from Gravelli, several other companies in the world can make similarly thin and resistant concrete. One of them is the most famous French brand, Lyon Béton. The main difference lies in the concrete’s treatment and quality, which positions Peters and Eberl among top producers worldwide. Their special waterproofing should resist the likes of Maggi stains.

DECKCHAIR Do you have the feeling that this deckchair must break under your weight? You are not alone. That’s why the Zephyr deckchair was made – to provoke people and tempt them into giving it a try. The deckchair is 3 centimetres thick and its maximum load is at least 160 kilogrammes. The spot where your hips are (i.e., where most of the weight is concentrated), floats above the ground and thanks to fibreglass, it is even a bit springy. This is a flagship piece for Messrs. Peters and Eberl, who used it to show people that their concrete can work.

SINK Sinks are one of Gravelli’s bestsellers. Peters made the first concrete sink mixes in the bathroom of his apartment and together with Eberl, they delivered them to their first customers by tram. Since then, a lot has changed – waterproofing has improved, to make sure the concrete does not soak up water, and the design has also significantly advanced. The Map sink was made for a Chinese investor. Its shape copies the landscape of the valley where the congress centre receiving the sinks is located. The incline of each level of the sink is meticulously calculated so that water can flow down even from the most distant spot.

BOWL The very first bowls were almost 2 centimetres thick; today, they are on average 2 millimetres thin. The biggest one, which is 35 centimetres in diameter, weighs only 2.5 kilogrammes. On the outside, the concrete is completely smooth. The inside of the bowl, however, boasts a natural texture including bubbles. For most clients, this is the first product they buy from Gravelli. Around 40% of them later have a table made.

COFFEE TABLES The set of three coffee tables shows best how the company works. The concrete is not cast. Using special guns, it is sprayed in thin layers into wooden moulds. Peters and Eberl have the moulds made by a cabinetmaker living just outside Prague, but the rest of the magic happens in the heart of Vysočany – Prague’s industrial district. The concrete is mixed in a side room. The main room is used for spraying it into moulds and the back room is dedicated to drying and maturing, which takes 5 weeks. Maturing is the key part of the whole process, so no rush!

LIGHTS Concrete lampshades are 40 centimetres tall and their diameter is 14 centimetres. Their thin concrete shell will remind you of the bowls. The production process is also the same. The lampshades are relatively easy to make and other producers started copying them, which is why Messrs. Peters and Eberl do not talk about them that much anymore.

LICRETE, A SEE-THROUGH CONCRETE Imagine a concrete wall that is as firm as a standard wall but lets light through. When someone walks on the other side of the wall, you can see a human silhouette. Peters and Eberl were not the first to come up with the idea of see-through concrete, but they were the first to simplify production and make it cheaper so that using it in practice is feasible. The basis of each block is a Plexiglass grid sunk into concrete. As opposed to more common solutions, it does not let through only 3% of visible light, but a whooping 20%. Prague’s Forum Karlín has an impressive bar made of this type of concrete.

Ondřej Krynek, Editor-in-Chief: DesignMagazin.cz

DESIGN NEWS

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THE GULLIVER AIRSHIP The Gulliver Airship landed on the roof of DOX, the Centre for Contemporary Art. It was designed by architect Martin Rajniš with his studio Architecture Guild (Huť architektury) as an element not corresponding to the minimalistic shapes of the gallery building. The construction, which is more than 42 meters long and 10 meters wide and made from wood and steel, hides the possibility to sit inside. You can visit it only until the end of 2017.

STANISLAV LIBENSKÝ AWARD 2017 Only until November 20, at the same place - in the Dox Gallery, is it possible to visit an exhibition of the 30 finalists of the prestigious Stanislav Libenský Award 2017, which every year selects the most interesting projects of recent art school graduates, who used glass in their work. The exhibition showcases attractive designers from all over the world, including the Czech Republic. You should not miss the Visible and Invisible installation, designed by this year’s winner, Martin Opl.

DIOR FASHION HOUSE CELEBRATES ITS 70TH ANNIVERSARY WITH A BREATH-TAKING EXHIBITION French fashion house Dior celebrates 70th anniversary in great style. In The Muséé des Arts Décoratifs in Paris, they opened a large retrospective, where you can familiarize yourself with the brand’s history, its most significant activities in the field of fashion, including New Look, and up-to-date collections. The exhibition also includes a number of shoes, hats, handbags, jewellery and perfumes, which you can try.

SELECTED BY MARWICK

Anna Batistová

BIRTHDAY GIRL (HARUKI MURAKAMI) Odeon publishing house has published another novel by Haruki Murakami – one of the most significant contemporary Japanese authors. The author of Norwegian Wood and After Dark has been a hot candidate for the Nobel Prize several times. His new book, Birthday Girl, is the mysterious story of a young girl. On her twentieth birthday, she has to switch shifts with her friend in a restaurant. And on that particular night she is supposed to bring the dinner to the owner of the place, to the sixth floor. The elderly gallant gentleman, who she sees for the first and the last time in her life, makes the impression of a good but mysterious man. He offers to fulfil any wish of hers…

REPUTATION (TAYLOR SWIFT) Famous American singer Taylor Swift will release her sixth album on 10 November, entitled Reputation. Swift has already released the first single from the album, Look What You Made Me Do, which to date has more than 400 million views on YouTube. Her three-year-old album 1989, named after her date of birth, was the best-selling album in America in ten years, although this record was eclipsed one year later by Adele’s album 25. According to the Forbes chart, last year Taylor Swift became the highest-paid singer and celebrity of the year. She owes her success mainly to the 1989 World Tour.

MURDER ON THE ORIENT EXPRESS (KENNETH BRANAGH) Britain’s leading Shakespearean actor sir Kenneth Branagh decided to shoot a remake of the famous episode of detective Hercule Poirot, Murder on the Orient Express, based on the Agatha Christie novel. Kenneth Branagh has cast himself as Hercule Poirot, solving the murder of Samuel Ratchett, an American, in a luxurious train while passing through Yugoslavia on the Istanbul–Calais route. The film also features stars like Judi Dench, Johnny Depp, Penélope Cruz, Michelle Pfeiffer and Daisy Ridley. The film produced by 20th Century Fox will be in Czech cinemas from 23 November. 40

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revue Anna Batistová

FOCUS: RUDOLF FIRKUŠNÝ PIANO FESTIVAL F

ive piano evenings. Excellent and very varied performances by top interpreters. In November, the Prague Rudolfinum will host the music festival bearing the name of the famous Czech pianist Rudolf Firkušný for the fifth time. It is organized by the Prague Spring festival. "It is meant as a counterbalance to the large May festival – it is a small festival with a narrow focus on piano concerts. However, both festivals aim to bring the experience of world-class interpretation to the Czech audience," says Pavel Trojan from Prague Spring. The interpreters for the fifth year of the festival will be the pianists Andrei Gavrilov, Pierre-Lauren Aimard, David Fray or Tomáš Víšek. Can you please briefly introduce them? Andrei Gavrilov is a living legend: when he was awarded the first prize at the prestigious Tchaikovsky Competition in Moscow in 1974, becoming the youngest winner in the history of this competition. In his CV, we can find episodes resembling espionage novels: he was subjected to severe persecution by the Soviet KGB. Pierre-Laurent Aimard is a master of the most minute musical detail, which is a great disposition for interpreting The Goldberg Variations by J. S. Bach. David Fray is a brilliantly talented representative of the youngest generation of pianists. And Tomáš Víšek is one of the most distinctive phenomena of the Czech school who will be presenting, among other things, a sample of the almost unknown compositional legacy of the pianist Rudolf Firkušný. New this year is a concert dedicated to piano four-hands played by the sister duo Khatia and Gvantsa Buniatishvili. What will be specific about it? Since they were young, the vivacious sisters have shared a passion for the piano. It became an instrument of dreams helping them

escape from the dismal situation in their native Georgia of their youth. Khatia says about her sister Gvantsa: "I am the air, whereas she is the earth." The sisterly consonance is a great condition for spontaneous play – one can perfectly react to the other and they can enjoy almost unlimited freedom. Do you have a tip for which of the concerts will become one of the highlights of the Prague music season? And why? Personally, I am very much looking forward to the début of the young French pianist David Fray. He was voted Newcomer of the Year by the prestigious British BBC Music Magazine in 2008. A documentary about him shot this year is called Swing, Sing, Think. These three verbs perfectly describe Fray’s personality and interpretation. I dare say he will be a great Newcomer to the Czech scene! 41

Pavla Čechová, photography: Soutěž a podnikej

HIGH SCHOOLERS MADE BUSINESS PEOPLE A

lthough they haven’t graduated from high school yet, their day planners are already full of meetings with clients and business partners. Successful business people and managers mentor them and they spend their free time thinking of the best strategies for their product. Meet the high school students trying to succeed in the project "Soutěž a podnikej" (Set up a business and compete). High schoolers who have the appetite and courage to start a business don’t need much to begin with. If they have a good idea, they can sign up on the website of Soutěž a podnikej. They should be at least 16 years old and go to a Czech high school. Anna Suková, who graduated from a business high school in Prague this year, signed up for the competition this time last year with an idea which had a social dimension. She noticed that children often abandon old toys for new ones and thought it would be good to give a second life to toys which have been thrown away: wash, disinfect and repair them and offer them to maternity schools for a reasonable price. Half of the proceeds would be sent to centres for abandoned infants. That was the first step. The second step would consist of giving work to socially disadvantaged women, such as single mothers and women living in women’s shelters. She called her company Toys with a Story and took home a landslide victory in the national round of the competition, where members of the jury included the organisers and the heads of KPMG, Liftago, Zaraguza,

UP21 and Blackfox Advisors. She succeeded in the competition of 116 participants. Students sign up with a colourful palette of ideas. One of the high-ranking spots was taken by a girl producing original hair bands. Other achievements included an application detecting the location of public transportation buses and trams in real time and making flower pots out of recycled yoghurt containers. "Our basic premise is that nothing is a bad idea," says Martin Vítek, the co-founder and organiser of the competition. He adds that students can verify their business ideas and change them over the course of the competition, if they wish. "Or they find out if their idea truly addresses an existing problem. The competition is about learning how to conduct business in real business environment. The students may

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Last year’s winner Anna Suková in Chicago

realize that implementing their project is not possible in the field they have chosen. However, they meet different people at least and together they will maybe come up with something brand new." WITH THE HELP OF MENTORS The current round of the competition started in September 2017. High school students have six weeks to sign up for the competition. They decide whether they will participate as individuals or in a team of up to three people. "Then they need to write the project. It must be clear who the project is for and which specific problem it addresses," explains David Friedl, another co-founder and organiser. Each participant is assigned a mentor, who guides the student according to the competition’s methodology and motivates them to continue with their work. Their first task is to draft a business plan; the following tasks are usually smaller and students must carry them out regularly. Mentors often come from business incubators. They enjoy their job, want to become acquainted with new ideas and share their experience. "They are the kind of people who can look at things in the long run. They may be helping someone who will become their business partner or they may simply wish to make our society better. The competition also presents an opportunity for networking, i.e., meetings of people who under other circumstances would hardly ever meet," explains David Friedl. Friedl says that it is a deeply valuable opportunity to peek into the soul of the youngest generation, which will become

economically active in a few years and will dictate shopping trends. The next stage is a presentation in front of a jury and evaluation. The jury usually consists of bosses from large companies. "These people are competent for evaluating the project. They must be able to discern whether the candidate will be capable of managing a business and whether their idea has a chance for success. At the same time, they must be able to give the students real feedback," explains David Friedl. In the regional rounds, the jury is composed of three members; the final round is decided by a five-member jury. "Some of our jury members say that they, too, were helped by a competition when they started out, so they like to take part in these initiatives," adds Martin Vítek. The most successful competitors can look forward to stunning prizes. The winner gets 120,000 crowns to launch their business and a business trip to Chicago in the summer. The trip is a good occasion to be introduced to potential partners, investors and customers. Those in second and third place also receive attractive sums of money to start their business as well as membership in start-ups and workshops. ABOUT THE COMPETITION Soutěž a podnikej is a project for Czech high school students. It is aimed at students who wish to work on their ideas and launch their business while still at high school. The winners of regional rounds will take on each other in the national round in Prague. The competition’s objective is to enable high school students to work on their own projects and receive professional mentors' support. www.soutezapodnikej.cz

Richard Valoušek

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CZECHS ARE NOT SELFISH C

reativity, play, adventure, freedom – these words are usually associated with childhood. Radana Waldová and Jiří Wald remind adults that they could be part of their lives, too. "This belongs to our life. Independent culture runs like a thread through all this and is an integral part of it," says the couple. What are they like, these Czech philanthropists who help Czech society with their many charitable projects? Marwick visited the WALD Press publishing house to find out. Do you remember your first children’s game? Jiří: It was a construction set similar to the Merkur ones. It was wooden, however, and its name was Matador. Radana: I had lived in isolation with my family, my parents and grandparents, until I went to first grade. I remember a garden with fruit trees, rabbits and chickens. Those were my childhood friends. I used to collect eggs from our hens, wait for hedgehogs, domesticate rabbits and later, when I had a baby doll stroller, I had our tomcat in it. Was your childhood full of adventures or were you told not to stand out and pushed to blend in with the grey crowd? Jiří: Children are lucky in that they do not let a totalitarian regime get close to them. They have their own world in which nothing is impossible. I had a joyful childhood full of adventures on the periphery of Prague. They were real adventures, not virtual. We would venture into Prague’s underground sewers, get into fights with children from the Žižkov district, make popping balls and invisible ink. Radana: We were all growing up in a grey society, but thanks to living with my grandparents, I was strongly influenced by their thinking. My mum’s grandpa was born in a small village in Moravia at the end of the 19th century. He built a small business in Prague. His hard-working nature helped him get work at the Ministry of Foreign Affairs, after being a teacher, a legionary and a law student. He had the chance to work in several South American countries.

How much was he impacted by the war? Radana: It was not so much the war as the new regime that followed. He had to retire early. I had a certain awareness of what was right since childhood – I didn’t understand why I should call my teacher "comrade". To be honest, I felt I was on the margins of society rather than in the grey crowd. What were your parents like? Did they teach you to think independently? Jiří: I think my upbringing was not bad when it comes to free thinking. My parents' philosophical system got under my skin. According to them, wholeness is the basic attribute of the whole world and a whole is never just a sum of its parts. I was raised in line with Komensky’s holistic thinking, which I still consider to be the best recipe for fixing the world. Have your grandparents played an important role in your upbringing? Jiří: Yes, my grandmother Julie was a great storyteller and my grandfather František took me to the Pompeii excavations during his reminiscing of the old days. My parents were close to Steiner’s Waldorf education, so I spent a lot of my time with art. At home, we had a large library full of boy and girl scout fiction, which I especially loved, because boy and girl scouts were destroyed by the communists, and forbidden fruit tastes best, as we all know. And Prague had always been full of art, which our parents lovingly introduced us to. Radana: My family always worked a lot. Maybe it is a source of freedom and creativity. My parents were never the type of people who would go to work, come home and watch TV. We had to take care of the house, the garden and our tenants. That was possible under communism? Radana: A form of personal, not private ownership existed – that was the case of the house we lived in, which was built by my grandfather. We had the obligation to take care of everything, but the rent went to the communist party’s national committee. It is hard to teach free thinking in times which are not free. One had to be very creative to be able to find their inner freedom. 45

Most often, we get asked why we do it and what’s in it for us

How difficult is it to give children sufficient space to be creative and at the same time regulate their behaviour so that they know where the boundaries are, how far they can go? Radana: It is more than difficult and it requires a lot of time, which most parents don’t have. Each child has their own personality and responds to different methods. In theory, a lot has been written and said, but in practice, things are often different. Recently, the mother of our youngest son’s classmate confirmed this view of mine. She is a psychologist and she was completely taken aback by the behaviour of her third child. During a parental meeting, she accurately expressed my opinion when she said that upbringing rules should only be very general and most of it remains in the hands of the parents, because they know their child best. But I believe that apart from the oft discussed freedom and creativity, one should be a role model for their children – that is more important. Czech schools are criticized for not being sufficiently supportive of creativity in children. Do you also see this? Jiří: The problem does not apply only to Czech schools. Schools usually prepare pupils for their future jobs, serve as a mediator of knowledge and develop the pupils' skills. Developing children’s imagination, however, is a lot more complicated. It is an art in itself which does not have much in common with cramming encyclopaedic knowledge. "Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world." This quote is attributed to Albert Einstein and I fully agree with it. Radana: It all comes down to the individual teachers. As in all fields, some are good, some less so and some are bad. You can surely tell a good school by how happy the children are to go there. I think that we very much underestimate the importance of schools and teachers in grades 1–5, where the children’s relationship to education is formed. You never forget your first teacher. Teachers are definitely lacking here. Are Czechs creative at all? Jiří: They were, they are and definitely will be. We are a tiny Central European country and higher levels of creativity are necessary for our survival as a nation. This is best proven by our recent history – under the communist regime, it was typical that there was a total lack of everything. I had to make my first electric guitar by myself, with the help of my friends, so that 46

I wouldn’t have to feel ashamed when playing at balls in the Lucerna club. Goods and services were often exchanged. All of that forced us to be very creative. The pressure of the environment makes you creative and compels you to look for alternative solutions. Radana: For sure, both in the good and bad sense. Think of the many Czechs who are globally successful in science, culture, art and other fields. On the other hand, I don’t think there is a single law or decree in which the cunning Czechs couldn’t find a loophole in order to avoid their legal obligations. You have dedicated your entire entrepreneurial life to telling people not to just think of themselves when doing business. Does it have an impact or are we selfish? Jiří: I don’t know to what extent our media presence influences the way people think and act. Statistics suggest that the Czechs are not selfish. Whenever something bad happens here or abroad, a large number of people help, financially or otherwise. Radana: I think we are selfish, but only to a certain extent. There are regular waves of solidarity and many individuals are aware that cultivating and helping society benefits both sides. When receiving the award for a Business Contribution to Arts and Culture, you said in your acceptance speech that if culture is not supported financially, it will not be free. And that some people probably feel that the more creative people there are, the more costly it will be to exert control over them. Which they obviously don’t like. How big was the reaction to your speech? Jiří: We got a number of important positive responses, which strengthened our conviction that developing creative imagination through cultural activities is of essential importance for the growth of free society. Can you count how many times people have asked you why you do this? Jiří: "Why do you do this?" and "What do you get from this?" are the most frequent questions people ask. For us, the answer has always been simple: It makes us happy and it definitely does not do any harm to society. Today, people no longer perceive philanthropy as a positive deviation from established social norms. People help the victims of floods or earthquakes and do not ask "Why? What’s in it for me?". Your largest project called "Through Art to Freedom" started with the flood in Moravia in 1997, when you convinced a considerable number of companies to help you acquire a hundred air

Being truly free requires determination and courage

purifiers to be installed in a hundred bedrooms in children’s homes impacted by the flood. How did you manage that? Jiří: We were publishing a newspaper for doctors at the time and one editor asked us if we knew how to address the issue of airborne mould spores which children were inhaling in the slowly drying bedrooms of children’s homes. We managed to get together sufficient financial resources, buy a hundred special air purifiers and deliver them to a hundred bedrooms in Moravian children’s homes. This is how we got to speak to many children in the homes. We realized that they didn’t suffer material want, as we’d thought, but the lack of individual care. I heard you were surprised by how many children there were? Radana: It was a shock. By then, we hadn’t had such a direct encounter with this Czech phenomenon. We were seriously considering adoption, but given the number of our own children and our busy work schedule, we agreed that it would be irresponsible. Instead of adoption, we created the project "Through Art to Freedom", which consisted of taking children from three Czech homes to Provence in France every year. We invited renowned Czech artists to work with them in arts workshops, because art really does open the soul and develop creativity. What is the biggest reward for you – seeing these children successfully integrated in society? Radana: To be honest, it makes me very sad to see how hard it is to integrate children from children’s homes back to society. Only a small fraction of them succeed. They have a hard time finding new friends, society is "the Other", they very often perceive it as an enemy. Unfortunately, this is also true the other way round. Do they feel that life did them wrong? Radana: They cannot come to terms with the story of their life, why it happened to them specifically. For most young people, the biggest problem is forgiving their parents for having had to grow up in a children’s home. Czech children’s homes mostly care for children who do have parents, but for one reason or another, they have been taken away from them. There is neither sufficient help for families in difficult situations, nor a sufficient number of places in foster families. Most of the works of art created in our arts workshops were for mummy or daddy. Family is simply irreplaceable and without it, children are psychologically harmed for the rest of their lives.

What do you see as a reward then, what makes you happy? Radana: That we prepared an unforgettable holiday for these children and that they regularly get in touch with us, although they often do so because they need financial assistance. WHO ARE RADANA WALDOVÁ AND JIŘÍ WALD Radana and Jiří are the founders of several companies. The first one was registered in 1990 and laid the foundations for an important pharmaceutical company MUCOS Pharma CZ, which is a successful player on the CEE market. They have made a historical contribution to the history of modern Czech philanthropy through their extensive support of a number of charitable social and health projects. They have received numerous awards both in the Czech Republic and abroad for their long-term humanitarian and cultural activities. They are patrons of the Neuron foundation Their best known philanthropic projects include the health prevention initiative Manager of Your Own Health (1998–2001), the project for abandoned children Through Art to Freedom (from 2000, ongoing) and the international exhibition project Orbis Pictus PLAY (from 2005, ongoing), which stimulates creativity and innovation through interactive art. Orbis Pictus PLAY enjoyed wide media coverage including CNN and The New York Times.

KLÁRA SPILKOVÁ ON HER TRAVELS / SCOTLAND

here you can get a good meal, what various courses are like… Klára Spilková, the Czech Republic’s best female golfer, shares her tips and experiences from her golfing travels around the world with readers of Marwick. After my American adventure, I headed to the north of Britain – to the land of pipers, the Loch Ness monster and golf… I play in Scotland every year and I love to come back. Although the weather here is always so unstable. During the first week we stayed near Troon, which hosted The Open last year. This seaside town is literally infused with a spectacular golf atmosphere. The same thing applied a week later to the birthplace of golf – St. Andrews. This year, we stayed right

next to the iconic Road Hole, the 17th hole, so I was able to watch both good and bad shots directly from my room every morning and evening. There really is something about this place. I always enjoy seeing golfers walk right through the town centre from the eighteenth green straight to the pub with their bag still strapped to their backs. I, too, popped into one of the most renowned golf pubs in town, Dunvegan, several times. I had the famous fish and chips and even a beer when I finished the tournament. However, the town is worth a visit not just for its pubs and golf. St. Andrews has a rich history that dates back to the 6th century. It definitely pays off to stop by and walk through this ancient historical town. I’ll see you next time again somewhere on the other side of the world!

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St. Andrew’s is located in the east of Scotland, by the North Sea

KLÁRA SPILKOVÁ TRAVELS THE WORLD WITH MARWICK READERS

Chicago St. Andrews

Sitges

TOP 3 FACILITIES

Lukáš Rozmajzl, editor-in-chief: CityBee.cz

ARCHITECTURAL CAMP After summer, architects opened a new camp right next to the Emauzy Abbey. The idea is not to provoke anyone by squatting, though. It is a new Centre for Architecture and Metropolitan Planning (CAMP). The multi-purpose space is dominated by a spacious hall with a unique large projection screen and exhibition stands. On them, visitors could already see several dozen of the new structures that will enrich Prague soon, as well as the new street furniture. CAMP is also equipped with an indoor amphitheatre for professional presentations, lectures and conferences. The Five Page bookstore and publishing house has also equipped the local store and reading room with dozens of works on architecture, design and urbanism. “CAMP is a place where you can be directly involved in the future of our city,” the authors of the project say. The admission is free. Useful tip: If architectural scepticism falls on you, you can dilute it with John Lemon lemonades or ground it with a mango cheesecake from the local café. It is open every day, including weekends.

ARABIAN LOUVRE After a five-year delay, the Abu Dhabi Louvre museum, built on an artificial island in the heart of the United Arab Emirates, will open its doors to the world on Saturday November 11 2017. Apart from a permanent exhibition on the evolution of civilization, arts and history of the region, the new cultural institution will present artistic riches that are part of the Paris Louvre depositaries, including Leonardo Da Vinci and Vincent Van Gogh canvases (not a word was spoken yet about a loan of Mona Lisa). One-day tickets to the facility designed by the famous architect Jean Nouvel costs the equivalent of about CZK 360. Useful tip: The new construction is dominated by a huge “perforated” dome which is 180 metres in diameter, with geometrical patterns opening to the sunlight. It weighs about 7,500 tons, equal to the construction of the Eiffel Tower in Paris.

A TOWN WITH ITS OWN BREWERY Přeštice near Pilsen has a population of roughly seven thousand inhabitants and its own brewery. After 112 years of inactivity, production at the brewery restarted at the beginning of autumn, in a building called Peklo (Czech word for Hell). “The facility is right in the town square, where you can park anytime. An international road passes through the square and the town will be bypassed in the near future. This is why a brewery with a restaurant could be one of the reasons for the passers-by to get off the bypass and drop by,” the Přeštice town mayor Karel Naxera says, describing the motivation for an untraditional investment from the town budget. The brewery has a annual capacity of 1,400 hectolitres and the town will receive CZK 1 from each litre of beer sold. Useful tip: If you cannot decide what product from the Přeštice brewer to try, order their beer tasting paddle. Also, you should not miss a delicacy from the local breed of black-patched Přeštice pig. The restaurant serves mainly Czech cuisine.

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein are those of the interviewees/survey respondents/authors and do not necessarily represent the views and opinions of KPMG in the Czech Republic.

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