CEFC, the private Chinese conglomerate, has acquired the Florentinum office building in the Czech capital of Prague for a figure reported to be €283 million.
The asset, located in central Prague, is a prime mixed-use property combining office space and retail. The property totals 628,000 square feet of leasable space, including 530,000 square feet of offices and 98,000 square feet of retail. As the largest office building in the city, it has several long-term tenants including EY, Havel Holásek & Partners, HSBC Bank, Bank of China and RSJ Investment Group.
The seller was Penta Investments, the Prague-based real estate investment manager, which did not disclose the price of the transaction. However, the Czech news agency CTK News has reported the deal was struck at approximately €283 million. Penta Investments invests in real estate throughout Europe, predominantly in the Czech Republic, Poland and Slovakia, across a number of sectors including office, retail and residential.
Marek Dospiva, partner at Penta Investments, said the asset had received interest from Germany also. “The selection and the negotiation process was extremely demanding and in only a few weeks, the Chinese offer outbid a well-known German investor in the final stages,” said Dospiva.
The Czech government has been pushing for closer trade and investment links with China in recent years, an effort boosted by a strategic partnership forged during a March visit by Chinese President Xi Jinping.
As a result, Shanghai-based CEFC has been on a spending spree in the Czech Republic this year, investing in a number of industries including real estate, and has decided to base its European business in the Central European country.
“We see Florentinum as an exceptional business opportunity and as an integral part of our strategy to establish our European headquarters in the Czech Republic. We aim to further develop the concept of Florentinum and create outstanding working conditions for CEFC as well as for all our tenants,” said Chan Chauto, president of CEFC China.
The Florentinum deal is not CEFC’s first foray into the Central and Eastern European market. Last year, the conglomerate acquired the Živnobanka building in central Prague and the Martinický Palac in the west of the city.
Penta Investments, which has real estate assets worth €7 billion, was advised throughout the transaction by JLL.