CPI Group to sell additional properties in the centre of Prague

According to the Hospodářské noviny (HN) website, which also reported on the sale of the Olympic Garden complex, 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.

Net proceeds from the sale of Olmypic Garden, an office complex in Prague is expected to generate EUR 38 million, or almost CZK 939 million, according to the regulatory announcement. The name of the buyer of the property was not disclosed.

The Olympic Garden complex consists of a total of three office buildings with a total leasable area of 16,700 sqm, two of which are located on Spálená Street and one on Vladislavova Street, HN reports. It includes the building of the former First Czech Mutual Insurance Company, which was built between 1907 and 1909 according to a design by architect Osvald Polívka.

A way out of debt

In addition to the sale of the property in the centre of Prague, CPIPG has also 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 create a joint venture into which Vítkov's company will invest eight hotels in the Czech Republic and CPI Hotels, which manages the CPIPG hotels. BHP will acquire a half stake in the joint company at the beginning of this year, according to the server, which said the value of the portfolio in the company will be 350 million euros (about 8.6 billion crowns).

In the Czech Republic, CPIPG owns the Clarion Hotels in České Budějovice, Prague and Ostrava, and the Mamaison Hotel Riverside and Buddha-Bar Hotel in Prague. When asked which hotels were part of the deal and how high the price was, neither CPIPG nor BHP responded to the server.

Vítek's real estate group has been selling its assets in recent months to reduce its debt after the costly acquisition of Austrian real estate firms Immofinanz and S Immo, HN reports. 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, the American investment firm Muddy Waters published a report claiming that Vítek was lying about the true value of the company. CPIPG has objected to the allegations and said it never concealed business transactions with its owner or other related parties.

Vítek, who according to last year's Forbes magazine ranking is the sixth richest person in the Czech Republic, 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 (32.1 billion crowns).

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Source: Newstream.cz