Some little birds (not involved in the deal) have been whispering in our ears, suggesting that the price (€52m) paid for Palac Andel is likely to reflect a yield in the neighborhood of 6.2 – 6.3, though this is most definitely not confirmed. “It means Prague’s already back in 2005!” says our source. And it supposedly demonstrates that there’s still interest in prime buildings in the city.
Or does it? We’re also hearing that the buyer is actually an insurance fund managed by Aberdeen. So, not a strictly third-party deal. What to make of the price then, which would otherwise dismay some people currently looking to buy in Prague? We’ll be looking for confirmation on all of this, but our sources have a history of being reliable.
The context of the story is that Aberdeen is selling properties to bolster some of its other Degi funds that it plans to re-open. So if a bunch of investors take the opportunity to cash out immediately (as inevitably some will), there should be some reserves in the kitty to cover it.