PRAGUE, March 13 (Reuters) - Orco Property Group's German business has made its first real estate acquisition in seven years and is looking for more, it said on Thursday.
Orco Germany, the funding of which has been at the centre of shareholder battles at its parent, has used money raised in a 36 million euro ($50 million) reserved capital increase to buy real estate with development potential in central Berlin.
It said the property is located close to other commercial complexes it owns and has a storage and workshop building with 1,300sq m of usable space.
"This purchase is the start of our agreed expansion course for 2014," Orco Germany's Deputy Chief Executive Nicolas Tommasini said in a stock market filing.
"The cashflow resulting from Orco Germany's capital increase will enable further acquisitions in Berlin and emphasises the importance and value of the Berlin portfolio."
Last week's reserved share sale was taken up by a company affiliated with Orco Property Group founder Jean-Francois Ott, but Orco Germany plans to raise a further 36 million euros with an additional sale open to most of its shareholders.
A similar reserved increase last year - taken up by Czech investor Radovan Vitek - was criticised by some Orco Property shareholders for reducing the parent's holding.
Vitek, one of the top real estate investors in the Czech Republic and Orco's largest shareholder since buying into the company in 2012, has said that the group needs more funding and that Orco Germany is its only significant liquid asset.
He was able to remove Orco Property board members representing two U.S. funds that battled him over strategy in January.
Orco Property was hit hard in the global financial and economic crises of recent years and posted a 142.4 million euro net loss in the first nine months of 2013 after taking impairment charges on some projects.
"It makes quite a lot of sense that they are investing in Germany because it is one of the most stable markets when it comes to real estate and has very high occupancy. So it is still lucrative for investors," J&T Banka analyst Pavel Ryska said.
The company, founded in 1991, has properties in the Czech Republic, Slovakia, Hungary, Germany and Poland, including the 192-metre Zlota 44 residential tower in Warsaw. ($1 = 0.7192 Euros)
(Reporting by Jason Hovet; Editing by David Goodman)