“It’s a knock-out view”: Brit Guy Barker on bringing new terrace to Rudolfinum roof
UK businessman Guy Barker is behind a project set to bring a new terrace to the roof of Prague’s 19th century Rudolfinum. His Arcona Capital, a real estate investment company active in a number of EU countries, is a sponsor of the Czech Philharmonic, which calls the magnificent building home. When we met at Arcona Capital’s offices, Mr. Barker also discussed a notable development it is involved with in Kyiv – and what led him to move to Prague.
You’re one of the founders of Arcona Capital. For people who don’t know it, what is Arcona Capital?
“We’re a real estate fund management business. We set it up in Munich in 2007. The people behind that set-up had all worked together in banking and in fund management beforehand.
“So 2007 – it seemed a good idea at the time, but it turned out to be a very challenging time [laughs] to set a business up.
“But we came through that and we now operate a real estate fund management business across northern Europe, with offices in Holland, Germany, Poland, the Czech Republic and Bulgaria.”
I know that you previously were based in Germany. What led you to make the move to Prague?
“Tax and women. Although in fact it would be appropriate to put that the other way around; I think as one gets older maybe those priorities change.
“I’m very positive about the country – much more positive than most Czechs are.”
“But there was a sort of personal reason to move here and financially, certainly a few years ago, the tax load as someone living in Germany was epic compared to Prague.
“So that was a further inducement to move. But that was quite a long time ago now. I moved from Germany to the Czech Republic in 2007 and I’ve in no way regretted it.
“I’m more and more comfortable here the longer I’m here. I’m very positive about the country actually – much more positive than most Czechs are.”
What is that you most like about living and working in Czechia?
“Let’s start with a comparison, because I quite often get asked that: Why would you move to the Czech Republic when you were living in Germany before?
“Well, I think there is a different vibe. Germany is a remarkably rule-based place. And if that’s not entirely deep in your psyche…
“The Brits are slightly cynical about rules and I think their attitude is much closer to the Czechs, in attitude to life and also I think the sense of humour.
“Also I find the culture here more accommodating than the German one, although I do speak fluent German and I have considerable difficulty with the Czech language.
“So despite the language issue, I just find the culture here more accommodating than Germany, where I also lived for 15 years.”
How much property does Arcona Capital own here in Czechia?
“At the moment we probably have about EUR 250 million under management, maybe a little bit more.
“We have a big portfolio of hypermarkets, across the whole country. We have an office portfolio which used to be quite large, but has been substantially reduced; it was regional, bought from Telefonica in 2008.
“So we’re in Chomutov and Strakonice and Ostrava and Zlín. Very regional. We have a couple of office buildings here in Prague, and a very big and quite exciting residential project on the eastern edge of Prague, in Úvaly.”
How does investing in Czechia compare to investing in, for example, Germany or the Netherlands in terms of yield?
“Traditionally, and the reason that we originally came here – and I was representing German institutions when I first came invested here in 1998; we were actually the first international investors into the Czech Republic – the yields were higher.
“At the moment the German [real estate] market is much weaker than the Czech market.”
“Now they are sort of not. In certain areas they’re lower. Generally there is a little bit of a margin.
“But that’s perhaps more due to the overall size of the market, compared to, say, Germany, than it is to weaknesses or differences in the market in terms of risk.
“The Czech real estate market is really quite strong. And at the moment that is due to the strength of its domestic purchasers, in comparison to, say, Poland or Romania or Bulgaria or Hungary.
“That solidity of the Czech domestic investment scene is a strong factor behind, let’s say, solid pricing here.
“And there isn’t really a great deal of difference. At the moment the German market is much weaker than the Czech market, and for certain segments of the market you actually get higher yields than Germany; not necessarily in all sectors, but certainly in some.”
You have a project in Kyiv. Arcona Property Fund has acquired a site in the city and this will be the first real estate investment by a Western private fund in Ukraine since the full-scale Russian invasion began. Why is now the right time for this kind of project?
“Well, is now the right time? That’s the question. And I think it’s too early to say.
“There’s a little bit more to this than perhaps meets the eye. We were buying a package of property from a London-listed company called SPDI a few years ago, and the deal assumed that we would buy the whole package.
“When we came to move ahead with the deal in 2021 the sellers were not able to fulfil various legal conditions for the Ukrainian site, at that time.
“A full-scale invasion of Russia of a country where you intended to invest could, perhaps, have been construed as force majeure.”
“So they agreed that instead of the whole package deal, which included properties in Romania and Bulgaria, all going through at the same time, we would buy the Romanian and Bulgarian sites – and we would complete the Ukrainian purchase when they had fulfilled the legal conditions.
“The other deals went through in 2021. The war started in 2022 but the conditions still hadn’t been fulfilled.
“So we could, potentially, have pulled out of the deal. There is a legal concept called force majeure: external forces outside your control.
“And a full-scale invasion of Russia of a country where you intended to invest could, perhaps, have been construed as force majeure.
“Legally that wasn’t entirely clear. So had we gone down the route of pulling out of the deal, there may have been legal consequences; we didn’t particularly want to investigate that.
“But we did feel that there was a moral obligation on us to complete the sale, bearing in mind that we’d done the first part of it.
“However, we were quite keen that if we did go through with the deal that the pricing would reflect current circumstances.
“It took us a while to be able to revalue the site. We did find, in the end, parties that were able to do that in Kyiv.
“That happened last year, the conditions were fulfilled by the sellers, and so, following the revaluation and the completion of the conditions, we then made the decision, Right, let’s go through with it now.
“Two years ago, three years ago, it was not clear what was going to happen to Kyiv. At one point it looked as though it was going to fall to the Russians.
“Now I don’t think it is going to fall to the Russians. I don’t think there is an expectation that Kyiv that will not be Ukrainian and under Ukrainian control in the near term or medium term; let’s not talk about the long term.
“Under those circumstances I think there is an element of clarity. It is central Kyiv, but it’s not a big deal in cash terms. It creates a lot of interest, PR-wise, which is always good I think.
“So we thought, Let’s do this, and let’s make something positive out of it.
“I will be in Kyiv in a month’s time celebrating the deal with our local team and I’m very much looking forward to that trip.”
One major reason I wanted to speak to you is that you are the person behind a plan to build a terrace on the Rudolfinum, the grand building by the river here in Prague. What’s the genesis of that whole idea?
“A few years ago we were looking to sponsor one of the major art institutions in Prague, and the Czech Philharmonic was very positive about our potential engagement, which mildly surprised me, because we’re not a big company.
“Bearing in mind that their major sponsors are Česká Spořitelna, Škoda, ČEZ and so on, why us? But they were very interested in a relationship with us.
“In a city of spectacular views, the ones from the roof terrace on the Rudolfinum are fabulous.”
“And when we first visited the team there and met David Mareček, the director, we were taken up to the roof terrace of the building.
“It’s there at the moment, it’s 800 square metres of roof terrace. And in a city of spectacular views, as Prague is, the ones from the roof terrace on the Rudolfinum are fabulous: over the Charles Bridge, up to the Castle, east over the Jewish Cemetery and the Old Town – it’s all there below you.
“So it’s a knock-out view. The terrace is there. But the access to it is inadequate for modern public use. It has no services up there. It’s not possible to use it in a regular, open to the public type way.
“I said, Why don’t you sort his out? David Mareček said, Well, we’re musicians; the building is owned by the state and the state supports the orchestra, but the state is at the moment unlikely to provide additional funds to make the roof terrace accessible for the general public – much as we would like to use it to support the Czech Philarmonic.
“I thought, We can do this, this isn’t particularly difficult.
“Well, that was then. It is actually quite difficult. But if you’d like me to, I’ll tell you where we go from here.”
That’s my biggest question with regard to the terrace project, because from what I saw online it was due to be finished maybe three or four years ago.
“Well, we started the fundraising, yes, just over four years ago. We thought, Let’s start the fundraising – and then along came Covid.
“That rather hampered us, because we wanted to have fundraising concerts and it wasn’t possible to do anything.
“Covid rather hampered us, because we wanted to have fundraising concerts and it wasn’t possible to do anything.”
“So that delayed us for a bit. Then we started the fundraising and we had some success – and then the Russians invaded Ukraine.
“And fundraising for elite culture when you have hundreds of thousands of refugees coming across the border and humanitarian crises evolving in Ukraine also seemed inappropriate. So we felt it was not right to be trying to push it hard then.
“That was then, we’ve moved forward and now, without wishing to be too specific, we’ve secured the funding, we have the funding.
“We have other issues rolling up. The monument protection authority and the planners and other people concerned with the Rudolfinum, a building which is at the heart of Czech culture, for all sorts of reasons, are anxious that any work that is done there is done not only reflecting the sensitivity of the building – but that the materials that are used in it are appropriate to its original construction and use, rather than perhaps a replacement of what’s there at the moment [stemming from an early 1990s renovation].
“That’s given us some issues to deal with which we think we’ve now coped with.
“Another challenge that we have is that the building is used every day by the Rudolfinum gallery, the Czech Philharmonic and at other times of the year the Prague Spring and the Dvořák Prague Festival.
“There are a lot of issues in doing work around the building that need to be dealt with.
“If we combine that, however, with the fact that the roof is now in major need of repair, and actually needs to be replaced anyway, it looks as though we have a confluence of interests coming together which will enable us to move ahead with the project with the aim of completing it in 2026.
“We are still waiting for confirmation of discussions with various parties on that.
“The work has already started. We did the first phase in October-November last year, and the remaining work we think will take about 14 months.
“And we hope that the second phase will be able to begin in June this year, with the aim of completing it at the end of next year, in conjunction with repair work that’s necessary anyway.”
Is part of the financing coming from the sponsorship of the famous statues [of composers] that are on the roof there?
“An element of it, yes, that is the case.
“But the majority of the sponsorship, to be fair, is coming from two big name players, let’s put it that way, which have a long-term history of supporting the building and the Czech Philharmonic.
“And I think they are better able to deal with the publicity of it than I am, when we get to that point.”
How will it be used? Will visitors be able to go there in the same way they can go up the Old Town Hall tower? Will tourists be able to pay to go on the roof?
“We like the idea of the phrase ‘full public access’, that the Rudolfinum is a working building.
“That obviously needs to be carefully managed. At the moment there’s a café in the Rudolfinum which is open to the public, most of the time.
“There’s the gallery there, which has a series of tremendous exhibitions. I was at the opening of the latest one two weeks ago and the gallery’s really on a roll at the moment.
“So there are competing, or overlapping, interests of the building that need to be managed.
“The aim I think is to reach a suitable compromise where the public do have access to it, I wouldn’t say all the time – I don’t think that will be the case.
“On a daily basis? I think that would be nice.
“We will provide a physical solution that will enable that to be possible. Whether it is then done is not for me to call.”
