One of the few large investment transactions of 2020 took place in Stodůlky Prague 13. Real estate investor Českomoravská Nemovitostní completed the purchase of the CITY WEST C1 and C2 office buildings for more than 2 billion CZK. Our Capital Markets team helped the new owner secure debt financing.
City West C1 and C2 compose more than 25,000 m2 of leasable area and are part of the wider CITY WEST administrative complex. The premises are leased by companies such as Vodafone Czech Republic, CGI IT Czech Republic and CEMEX Czech Republic. Both buildings were purchased by Českomoravská Nemovitostní from the CFH Group for over 2 billion CZK. Jan Bohata, from the Capital Markets team, helped negotiate the necessary funding for the transaction with a major Austrian "landes bank".
City West C1 a C2 (zdroj: www.cm-n.cz)
The success is all the greater given the fact that a major part of the entire bank financing process was successfully negotiated during the Covid-19 pandemic. All the associated safety and security measures made the communication significantly more difficult. During that time banks started reconsidering their approach to real estate financing. A number of banks have already suspended the financing of new real estate transactions or projects. This situation may last until the end of the third quarter of this year.
In the case of City West, the financing bank approached the whole matter individually and constructively. By using this approach they were able to appreciate the quality of this property and the entire micro-locality.
Jan Bohata, Associate Director, Capital Markets
Banks providing real estate financing are generally well aware that the real estate market will recover gradually. Therefore, it’s necessary to take into account the greater selectivity of banks in the evaluation of both real estate projects and transactions submitted by clients to banks with applications for financing.
"The reluctance of banks has a rational basis in the large number of prudent measures which followed the financial crisis in 2008. At that time, the real estate market fell by almost half," added Jan Bohata.
