At its Monday’s session, the Prague councilors approved an adjustment of the rent for city-owned non-residential premises, buildings and land for this year. The rent will go up by 7.55 percent, which corresponds to 50 percent of the annual inflation rate.

Prague opted not to go for the full inflation rate out of fear that it might lose tenants of non-residential premises, as some would not be able to bear a 15.1% rent hike after three years of crisis.

“Year-on-year adjustment of rents for inflation is a common practice in keeping with our obligation to manage Prague’s assets with due diligence. Just as inflation causes the city’s expenses to grow, we must strive to increase revenues to compensate and to be able to maintain city-owned properties in good condition. However, last year’s inflation rate reached double digits, and such a sharp increase in rents could be liquidating for many tenants of non-residential premises. The decision was difficult due to the fact that many tenants are paying reasonable rents, while many older contracts have not yet been revised and the rents are significantly lower than they should be. That is why we followed the example of Prague 4 and decided to take the middle road and increase the rents only by 50 percent of the annual inflation rate,” says Adam Zábranský, city councilor responsible for the asset management, legislation and transparency agenda.

The adjustment by 7.55% equals 50% of the annual rate of inflation officially announced by the Czech Statistical Office for the year 2022, which stood at 15.1%. The resolution applies to all lease contracts that include an inflation clause.