CPI Property Group will sell the former insurance company's building in the center of Prague

Prague – The real estate company CPI Property Group (CPIPG) of Czech billionaire Radovan Vítek will sell a historic building of an insurance company on Spálená Street in the center of Prague. The deal, worth nearly a billion crowns, is expected to be completed in the coming days, according to the e15.cz website. According to the Hospodářské noviny (HN) website, which also reported on the sale of the Olympic Garden complex today, CPIPG is also preparing to create a joint company with the hotel group Best Hotel Properties, which will include 8 hotels in the Czech Republic and the company CPI Hotels.

The net income from the sale of the Prague office complex Olympic Garden is expected to bring CPIPG 38 million euros, approximately 939 million crowns, as stated in the regulatory announcement. The name of the property's buyer has not been disclosed.

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

In addition to the sale of the property in the center of Prague, CPIPG has reportedly agreed on another billion-dollar deal, according to HN. Together with the hotel group Best Hotel Properties (BHP), backed by the financial group J&T, it will create a joint company, into which Vítek's firm will contribute eight hotels in the Czech Republic and the company CPI Hotels, which manages CPIPG's hotels. In the joint venture, BHP will acquire a 50 percent stake at the beginning of this year, the website reports, according to which the value of the portfolio in the company will be 350 million euros (approximately 8.6 billion CZK).

In the Czech Republic, CPIPG owns Clarion hotels in České Budějovice, Prague, and Ostrava, as well as the Prague hotels Mamaison Hotel Riverside and Buddha-Bar Hotel. When asked which hotels are part of the deal and what the price was, neither CPIPG nor BHP responded to the website.

Vítek's real estate group has been significantly selling its assets in recent months to reduce its debt following the costly acquisition of Austrian real estate companies Immofinanz and S Immo, HN reports. The group is also repeatedly facing attacks from former investment partners. Recently, American investors speculating on a decline in the value of CPIPG’s securities joined these attacks.

The American investment firm Muddy Waters published a report last November claiming that Vítek is lying about the actual value of the company. CPIPG denied the allegations and stated that it has never concealed business transactions with its owner or other related parties.

Vítek, who was ranked as the sixth richest person in the Czech Republic by Forbes magazine last year, is the majority owner of CPIPG with a stake of around 90 percent. CPIPG is headquartered in Luxembourg, and its shares are traded on the Frankfurt Stock Exchange. The company owns properties, for example, in the Czech Republic, Germany, Austria, Italy, Poland, and Slovakia. From January to September last year, the company increased its consolidated gross operating profit (EBITDA) year-on-year by 38 percent to 604 million euros (14.7 billion CZK). Total revenues grew by 46.3 percent to 1.3 billion euros (32.1 billion CZK).