Czech billionaire Radovan Vitek, the biggest buyer of offices and retail buildings in the country last year, said his investment company may spend more on real estate in 2011 as competition for assets increases.
Vitek’s Czech Property Investments AS purchased 14 Czech properties for a total of 10 billion koruna ($580 million) in 2010. That was about 45 percent of the value of all the buildings that were bought and sold. CPI’s purchases included properties occupied by German engineering company Siemens AG and Nestle SA, the world’s largest food maker.
“Last year was a great time to buy: prices bottomed out and foreigners were selling for no obvious reason,” Vitek, 40, said in an interview at CPI’s headquarters in Prague. “Values are now going up a little.”
The prospect of a stronger economy has encouraged foreign investors led by European Property Investors Special Opportunities LP and CA Immobilien Anlagen AG to return to the Czech market. Acquisitions worth a total of 556 million euros ($794 million) were completed in the first quarter, about seven times the year-earlier figure, DTZ Holdings Plc said in an April 15 report.
“We expect prices to eventually bounce back and that will curb our appetite,” said Vitek. CPI aims to invest 30 billion koruna to 45 billion koruna on properties over the next five years, as long as they don’t become too expensive, he said.
Vitek said he owns assets worth about 30 billion koruna ($1.8 billion).
Vitek started his first venture, importing blankets from Germany, as an economics student soon after the collapse of communism in 1989. He set up a fund called Investicni Privatizacni Fond Boleslavsko A.S. in 1991, then renamed the company CPI in 1998 when it began to focus mainly on real-estate investing.
By the end of 2010, CPI owned office buildings, hotels, homes and land valued at 39.7 billion koruna, according to its website. The company’s 12,600 apartments make it the second-largest provider of rented accommodation in the Czech Republic.
CPI and other investors may spend a total of 1.25 billion euros to buy Czech properties this year, up from 700 million euros in 2010, DTZ forecast in April.
European Property Investors Special Opportunities LP, managed by AEW Europe, completed the biggest transaction of the year in March when it bought an 80 percent stake in six warehouse parks, valuing the properties at about 300 million euros. CA Immo of Austria paid 272 million euros for Europolis, the property investment unit of Oesterreichische Volksbanken AG.
“The economic prospects have improved and foreign investors perceive the country as being less risky than its regional peers,” DTZ analyst Lenka Sindelarova said by telephone. “Czech investors with CPI as a leader continue to be active but are likely to face more competition from international investors this year.”
The total amount of money spent on real-estate acquisitions in the Czech Republic fell by about 58 percent in 2009, when the economy contracted 4.1 percent. In the first quarter of this year, gross domestic product rose an annual 2.8 percent, compared with 2.7 percent in the last three months of 2010, the Prague-based Czech Statistics Office said June 9.
In May, CPI agreed to buy Czech retail parks from CA Immo and Germany’s Union Investment Real Estate for 96 million euros, the company’s biggest real-estate investment this year. Vitek said he may bid for assets owned by ECM Real Investments AG, an insolvent Czech developer, if they are offered for sale.