At the end of the third quarter of 2011, Prague’s stock of modern office space stands at 2.77 million sqm, according to the Prague Research Forum. Of that, 68% is located in A-class properties, with class B making up the remainder. Half a dozen new office buildings were added (nearly 50,000 sqm) in the third quarter: Main Point Karlin, River Business Centre, Smichov Lyra, Centrum služeb Budějovická, Egon Business Centre and the renovation of Ehlenuv dum in Prague 1. Another 38,000 sqm is due to come on line before the end of the year. Take-up for QIII was down 49% from QII at nearly 50,000 sqm, while vacancy remained stable at 11.6%.
Finep has started sales of 67 flats in the third phase of its Prague 13 project British Quarter before even completing construction work on the second phase of the project. Prices begin at CZK 2.3m for units that begin at 45 sqm, ranging to as large as 118 sqm. “Since the start of the first phase in 2008 we have offered our clients 443 units, 80 percent of which have been sold and 67 percent completed,” says Michal Kocián, chairman of the board in Finep Holding.
Chalk one up for the activist groups. A court in Prague has stripped ECM’s scheme City Epoque of its urban planning permit thanks to a suit brought by local residents. The ruling is unlikely to please creditors of the company, whose huge debts forced it into bankruptcy. The V-shaped building was supposed to house 126 apartments, along with some penthouses that would have their own swimming pools. Like every single other project that’s ever been built in Pankrac, it’s been dogged by persistent local activists.
A very interesting story in yesterday’s Hospodarske noviny, which details some of the gory details in the collapse of Czech developer ECM. Its primary claim is the slide into bankruptcy began when the relationship between PPF and ECM deteriorated. Peter Kellner’s PPF had taken a 75% stake in their joint company called PPF ECM Holding, with ECM founder Milan Janku holding the remainder.
Janku’s own company ECM Real Estate Investments “never belonged to the joint company, but its method of financing was unacceptable for Kellner,” writes HN. It specifies a pair of bonds issued by ECM REI in 2006 an 2007 that brought in €54.8m but which had resulted in liabilities of €125.7m. PPF eventually refused to take part in the restructuring of these liabilities, and HN says the joint company eventually broke up over the issue. Continue reading
We’ll try to get a bit more detail on this deal, but CPI has bought a 50% share in Copa Centrum Narodni from Interco Holding. Copa retains its 50% share. Cushman & Wakefield represented the seller, but they’re unable to release any of the financial terms. Interco, based in Wiesbaden, appears to have been involved in the project since 2003.
“The opportunity to be part of a major scheme in the heart of Prague has proved extremely attractive to both potential tenants and investors,” said James Chapman, head of capital markets for C&W in Prague.
“We have seen a number of Central Europe’s more experienced investors look at prime development opportunities. This is due to healthy occupational demand and the ability of good projects to secure financing. We expect this trend to continue during the next twelve months.”
Unibail Rodamco is to take a 60% share in a new JV with Orco Property Group whose purpose is to develop a shopping center on 3.7 ha of land on Orco’s enormous Bubny plot in Prague 7. Orco has agreed to sell the land to the new joint venture, with the transaction expected to close in 2012. The shopping center is to be built by 2017.
Invesco Real Estate has purchased a 4,200 sqm building in Andel City from UBM Realitätenentwicklung. The building, located in the popular Smichov district of Prague 5, was reportedly acquired for the German fund NAEV. UBM managing director Margund Schuh says the transactions is further evidence of the level of interest investors have for quality assets in Smichov. The building is fully-rented, with tenants including Maersk, UBS and Boston Scientific.