Českomoravská nemovitstní sold the Zirkon Office Center office building in Prague-Karlín near the Křižíkova metro station. The new owner is a joint venture between Upvest and the American real estate company Lincoln Property Company. Upvest has been part of the Komerční banka group since last year.
Českomoravská nemovitstní (ČMN) sold the administrative center located on Sokolovská Street two years after its purchase. The investor justified the sale of the property by saying that the older building requiring reconstruction does not fully fit into his strategy.
“Zirkon is exceptional due to its location right next to the subway and there is a lot of added value in it, which, however, must be extracted through appropriate reconstruction. It thus goes beyond the scope of the main content of our business, which is the possession and management of the highest quality real estate in Prague,” said Radek Stacha, head of the ČMN board of directors.
Neither party commented on the price of the transaction, but according to market information, it is in the higher hundreds of millions of crowns. The price should be significantly higher than what CMN bought the building for.
After Bratislava, Prague
Upvest from the Komerční banka group focuses on financing real estate projects, but the building in Karlín is the first project in the Czech Republic in which Upvest entered directly as a co-owner. The first purchase was made by a company in Bratislava, where last year it purchased a brownfield near the Železná studienka forest park.
“As a financial partner, we select projects for which we have a high degree of conviction that they will deliver to investors a valuation commensurate with the risk of the given project, in this case reconstruction,” said David Musil, CEO of Upvest, regarding the project in Prague 8.
While Upvest will act as a financial investor in the Karlin property Zirkon, the other co-owner, Lincoln Property Company, will be in charge of the day-to-day management of the project.
“In the coming years, we plan to sensitively renovate the Zirkon Office Center building so that it meets ESG requirements (assessment of the company’s responsibility in the field of social and environmental factors, note ed.) future tenants and investors. Thanks to the exceptional location right next to the metro station and tram stops, the efficient shape of the floors and, last but not least, the very authentic history of the building, we will be able to offer a product that is in great demand in Karlín,” said Štefan Puci, investment director of Lincoln Property Company.
Czech Moravian Real Estate is one of the active domestic investors on the real estate market. The company is not afraid to use a higher proportion of indebtedness, including through bonds. At the same time, the company states that it also has sufficient resources of its own. According to his own information, he has 1.5 billion crowns in his account.
“The period of high interest rates is at its peak, their expected decrease next year will lead to a revival of real estate market activity. In this regard, CMN is in a comfortable position thanks to funds prepared for new purchases. We are trying to use the current absence of strong foreign capital in a similar way as in 2020,” said the head of Českomoravská nemovitstní Stacha.