Penta Real Estate has sold the Churchill Square office complex near Praha hlavní nádraží (the main railway station in Prague) to Českomoravská realitníní (ČMN) and Corporate Finance House Group (CFH). This is the Czech market’s largest office real estate transaction this year.
The brownfield at the main railway station in the centre of Prague has undergone a major transformation since 2017, when Penta Real Estate began construction of two office buildings, followed a year later by SUDOP’s construction of a residential building. The first office building became Deloitte’s new headquarters at the beginning of 2019, and in June this year, the majority of the second building was occupied by the Fortuna Entertainment Group. The new office building complex includes retail services on the ground floor.
“Originally, we no longer wanted to sell our buildings in the centre of Prague. However, the unexpectedly great investors interest was a strong argument to make an exception,” says Pavel Streblov, Penta RE’s director of commercial construction, adding: “It is known that the renowned interested parties believe in investing in quality architecture in exceptional Prague locations.”
In the competition, which also included offers from investors from Germany, Austria and the United States, Českomoravská realitníní won in a joint venture with the Luxembourg fund CFH at a price in excess of 4 billion CZK. Both of these companies already have a business history in common in Prague, i.e. the City West building, where the company is based, Vodafone in Prague 5, Crystal with VZP in Vinohrady and Amazon headquarters, the Blox building in Prague 6.
“This deal confirms that despite the negative outlook of the Czech economy, the Czech real estate market is still in good shape and has the potential for growth in the future. Our position in the market is strengthening and we expect it to grow further next year,” says Radek Stacha, Chairman of the Board of ČMN, adding that the company’s long-term focus should be exclusively on buildings of the highest quality. Their final choice then determines the longevity and creditworthiness of existing tenants.
The largest office market transaction this year was financed by the German bank Helaba whose previous activities in the Czech Republic include financing the acquisition of the Palladium shopping centre and the implementation of CTP’s logistics development plan.