Czech billionaire Radovan Vitek’s real estate company CPI Property Group (CPIPG) will sell the historic insurance company building in Spálená Street in the centre of Prague. The deal worth almost CZK 1 billion is expected to be completed in the next few days. CPIPG is also planning to create a joint venture with the Best Hotel Properties hotel group, into which it will invest eight hotels in the Czech Republic and the CPI Hotels company.
The net proceeds from the sale of Prague’s Olympic Garden office complex are expected to bring CPIPG EUR 38 million, or nearly CZK 939 million, it was announced. The name of the buyer of the property was not disclosed.
The Olympic Garden complex consists of three buildings with offices with a total leasable area of 16,700 sqm, two of them on Spálená Street and one on Vladislavova Street. It includes the building of the former First Czech Mutual Insurance Company, which was built between 1907 and 1909 to a design by architect Osvald Polívka.
In addition to the sale of the property in the centre of Prague, CPIPG has agreed another billion-dollar deal, according to HN. Together with the Best Hotel Properties (BHP) hotel group, which is backed by the J&T financial group, they will form a joint venture into which Vítkov’s company will invest eight hotels in the Czech Republic and CPI Hotels, the company that manages the CPIPG hotels. BHP will acquire a half stake in the joint company at the beginning of this year, which said the value of the portfolio in the company will be EUR 350 million (about CZK 8.6 billion).
In the Czech Republic, CPIPG owns the Clarion hotels in České Budějovice, Prague and Ostrava and Prague’s Mamaison Hotel Riverside and Buddha-Bar Hotel. When asked which hotels were part of the deal and how high the price was, neither CPIPG nor BHP.
Vitek’s real estate group has been selling its assets heavily in recent months to reduce its debt after the costly acquisition of Austrian real estate firms Immofinanz and S Immo, HN reported. The group has also repeatedly faced attacks from former investment partners. In addition, they have recently been joined by US investors speculating on a drop in the value of CPIPG’s securities.
Last November, US investment firm Muddy Waters published a report claiming that Vitek was lying about the true value of the firm. CPIPG has denied the accusation, saying it never concealed business transactions with its owner or other related parties.
Vítek, who is the sixth richest person in the Czech Republic according to Forbes magazine’s ranking last year, is the majority owner of CPIPG with a stake of around 90 percent. CPIPG is based in Luxembourg and its shares are traded on the Frankfurt Stock Exchange. The company owns properties in the Czech Republic, Germany, Austria, Italy, Poland and Slovakia, among other countries. From January to September last year, the company increased its consolidated gross operating profit (EBITDA) by 38 percent year-on-year to EUR 604 million (CZK 14.7 billion). The company’s total revenue rose 46.3 percent to 1.3 billion euros (CZK 32.1 billion).
Source: e15.cz, Hospodářské noviny, CPIPG and CTK
