PRAGUE, March 13 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
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
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)