Warimpex operating result improves

It’s a mixed bag for Warimpex in its QIII results filing. It concentrates on the improvement in operations, which rose 18% to €13.5m thanks largely to better performance of its hotels (Warimpex now runs 20 hotels). Not only was Warimpex able to benefit from an upturn in tourism over the period, but it managed to exit its 25% share in the Sobieski hotel (with a profit of €2.3m). EBITDA rose 15% to €17.7m over the same period. However, some writedowns on assets that took effect in September helped produce  a loss over the period of €2.8m. Total revenues of the group rose 8% to €81m.

“The outlook for the fourth quarter on the transaction market is quite positive. We are currently in the midst of promising negotiations, one of which is in its final stage, and we are confident that we will have good news to report in the coming days,” said Warimpex CEO Franz Jurkowitsch.

Daily News: Bank Center, Prague metro

Just a couple items. First of all, Bank Center in Budapest continues its fine run of form with an announcement that it signed up Qatar Airways, and that it had concluded lease renewals on 35% of its total leasable area during the third quarter. Over the last 18 months, in fact, it’s concluded deals (new leases and renewals) on 45% of the building. Current occupancy rate? 85%. Asset management of the building is handled by GLL Real Estate Partners, while property management and leasing is by Avestus Real Estate.

One other matter is a city planning issue in Prague, as the city’s mayor announced today that it was unrealistic to hope that construction would begin anytime soon on the planned fourth metro line. That’s not good news for anyone who was counting on Line D opening to commuters by 2020. Somewhat ominously, the mayor also said there wasn’t really enough money in the kitty for the completion of work on the A-line extension to the airport, but that work must continue. 

CIJ Awards CZ – The Results

Below are the winners from the CIJ Awards Czech Republic along with some pictures below. We salute everyone who submitted nominations and congratulate the winners! We’ve gotten a couple pictures from the event already  which are down at the bottom of the post, and we’ll up  more or them they come through.

Best Office Development
Main Point Karlin – PSJ Invest

Best Residential Development
Kajetánka – Bozner

Best Warehouse/Logistics Development
CTPark Brno II. – CTP Invest

Industry Leadership Award
Remon Vos – CTP Invest

Developer of the Year
Erste Group Immorent ČR

Law Firm of the Year
Wilson & Partners

ESSA Award
Centrum Zlatý Anděl – ING Real Estate Development CR
Futurama Business Park – Erste Group Immorent ČR
Gemini Office – Erste Group Immorent ČR
Mosaic House – Hampshire Investment

Best International Real Estate Agency
Cushman & Wakefield

Best Local Real Estate Agency
Svoboda & Williams

Property Management Team of the Year
CBRE Property Management

Financial Service Provider of the Year
UniCredit Bank

ILD buys R6 plot from Skanska Property CZ

The Belgian developer ILD has provided Skanska Property Czech Republic with an exit from part of its R6 Logistics Park development site. The transaction involved a 20,800 sqm plot on the R6 highway located five minutes from Prague’s international airport. Skanska Property’s decision to sell is part of a wider strategy of divesting itself from the R6 scheme in order to concentrate on the development of LEED-certified office buildings. Last year, it sold 75,000 sqm of the park to an Austrian-based logistics company.

CEE banks worry about their W.E. owners

If you haven’t seen the recent Fitch report, or FT reporting around it, it’s probably a good one NOT to miss. To be honest, it sort of sums up the mood at MAPIC this year, was that the banks have suddenly seemed to to have gone missing. Privately, investors and developers in CEE are complaining that banks are pulling out of deals at frustratingly late stages. Eurohypo, of course, announced it would end new lending except for Germany and Poland. It was tempting to hope that would be restricted to real estate mortgage banks, but you get the feeling this goes just a bit deeper.

Anyway, back to the post on the FT’s blog:

Once upon a time foreign ownership of domestic banking sectors was deemed a “rating strength” in central and eastern Europe.

Before the financial crisis, foreign banks had demonstrated their willingness and ability to support their subsidiaries, according to Fitch associate director Michele Napolitano. But those days are now long gone.

As FT Alphaville has already noted, foreign bank ownership, if the owners are from western Europe, usually only means one thing today: deleveraging. That’s bad news considering the scale of foreign participation in the CEE region

In fact, while the article does a good job of trying to scare you, it’s not as black as you’d expect if you read the whole thing. But the bit about the pressure on Austrian banks was unwelcome:

Austrian bank supervisors have instructed the country’s banks to limit future lending in their east European subsidiaries, a further sign of the potential knock-on effects of the eurozone crisis for economies around the world.

The restrictions come as Austrian officials seek to defend the country’s AAA credit rating, amid concerns that the government might have to bail out its banks because of losses in central and eastern Europe, where they are the biggest lenders, and their exposure to Italy.

The moves by Austria, which appear to be unilateral, show how even the eurozone’s strongest economies are feeling the pressure of the sovereign debt crisis.

More on this — obviously — to come.

CIJ Awards in Prague

There’s quite a bit of excitement as the Prague edition of the CIJ Awards takes place tonight. The new on-line plus jury voting system seems to have generated tons of interest. Nothing left to do but see how it all turns out. The gala event, by the way, is sold out, so the only way to get in would be to find out if someone with a table has an empty spot (we don’t know of any…). Looks like a great night, not least because the after party kicks off at midnight at the Kempinski.

For those attending, please know that we will once again be carrying out a charity collection for the Children’s Center of the Thomayerova Hospital, an orphange that cares for children whose parents are unable or unwilling to take care of them. Last year was a wonderful success for this cash-strapped institution, and we hope to be able to show similar generosity as the holiday season approaches.

Crestyl to lead ECM out of bankruptcy?

The Czech developer ECM is reported to have been taken out bankruptcy and placed in a temporary legal limbo zone as a Prague court decides whether to accept a re-organization arrangement suggested by the company. The idea apparently is for ECM to relinquish board positions to representatives of the Prague-based developer Crestyl. Its director Omar Koleilat would become chairman of the board. One of the other options that had been in play earlier this week reportedly envisioned Anton Hopfgartner (Property Solutions) filling that role.

The liquidator in charge of ECM until now, Ivo Hala believes a re-organization isn’t feasible, as it would require an influx of new money to the company. “Bankruptcy proceedings seem to be more advantageous because they offer greater satisfaction for the creditors in a shorter time horizon,” he wrote, according to court materials cited by CTK.

However, some of ECM’s creditors seem to be leaning the other way, including Astin Capital Management, which is representing bond holders with CZK 3.1bn. The decision on re-organization now lies with the courts. (As ever, public comments or private emails on the issue are more than welcome)

Echo, Ballymore score at MAPIC Awards

It was a good MAPIC for Central European projects, at least when it comes to the awards that were handed out. First, Ballymore’s project in Bratislava, Eurovea, took the Best New Retail Development prize, to the delight of Mike de Mug who was on hand to collect the trophy. Eurovea, of course, won a slew of prizes at the CIJ Awards in Bratislava in 2010. Then to drive the Central European point home, Echo picked up the top honors in the Best Refurbished Development for Galeria Echo. An enthusiastic Marcin Materny did the honors for the Polish developer.

HB Reavis another PKP deal

HB Reavis continues to make inroads into Poland. The latest scalp was for the Slovak-based developer is a win in a pair of land tenders for over 17,000 sqm of land in central Warsaw. Polcom Investments, part of the HB Reavis Group will take over the land plus buildings on Chmielna Street. The total transaction value was PLN 171m. Cushman & Wakefield organized the tender for the vendor.

Erotica: Coming to a mall near you

We’ve thrown out half a dozen headline ideas already to tell readers how Cushman & Wakefield has picked up on a trend we mentioned a few months back about the expansion of the Erotic City store network in the Czech Republic. Unthinkable five years ago, C&W says the chain has grown to 75 outlets. Size does matter, in this case, since the more common such stores  become, the more difficult it will be for mall owners to say no.

“The market for erotic goods is rather specific, in that customers are loyal to their brands, and tapping a market is difficult for international companies. Czechs are also conservative in this respect. There is only one firm in our country that has been capable of building a network of shops all over the country,” says  Ivan Michněvič from Cushman & Wakefield’s retail team. She admits, though, that there are some linger(ie)ing concerns that customers or adjacent stores could object.

Erotic City isn’t buying that argument anymore, though. “The sales of erotic goods in Western Europe are integrated more commonly into people’s lives. I am convinced that the Erotic City concept in shopping centres is decent and does not agitate anyone. We have encountered no negative responses from landlords or centre management in the shopping centres where our outlets are located,” says Vladimír Jelínek, Development Director of City Relax, the operator of the Erotic City shops.

Czech construction falls

Construction output dropped by almost 7% in September, according to the Czech Statistical Office. In the peak summer months of July and August, the fall was even worse, at 11 and 8% respectively.  Analysts say this will result in renewed pressure on jobs, even though the sector has already been shedding ten percent of its workforce annually during the crisis.

Goodman (GELF) launches €400m rights issue, plus refinancing

The Goodman European Logistics Fund (GELF) has launched a €400m underwritten rights issue, while announcing an agreement on terms for a new €800m debt refinancing package.

Goodman Group CEO and Chairman of the GELF Investment Committee, Greg Goodman said, “These are significant capital management initiatives for the Fund which will further strengthen GELF’s balance sheet and ensure gearing is maintained below 40% in line with the Fund’s long term gearing target. The initiatives will also provide approximately €500 million of investment capability giving the Fund capacity to increase gross assets to €2 billion and improving financial flexibility.”

The refinancing includes €400m of secured facilities and another €400m unsecured facility, structured in a way that’s supposed to let GELF “transition” to debt capital markets over time in order to diversify its long-term funding sources.