Various Czech newspapers cited a Bloomberg article yesterday that claims Arkády Pankrác is on sale in a transaction worth an estimated €265 million. It would be a remarkable deal, considering that the ink has barely dried on a deal earlier this spring in which G City, acquired the final 25% stake from developer ECE Projektmanagement. In 2015, it paid €162 million for 75% of the 40,000 sqm mall. There’s been no official confirmation of this most recent transaction yet, but independent sources have informed ThePrime that it’s currently in due diligence. (Bloomberg wrote that a non-binding LOI had been signed).
The buyer is understood to be Trigea, a Czech fund active both in its domestic market and in Poland. Outside observers suggest that the vendor has achieved a price that reflects the fact that no new malls will get built in Prague in the forseeable future. Also, when the D-line metro is completed, Arkády will be the only mall that sits on top of two metro lines. Yield-wise, the price will eventually come out. But remembering that financing now costs around 6% is a good way to think about what the floor might be for a successful prime shopping mall these days.
Local investors are navigating tricky waters. Many are cash rich (meaning they really need to invest) but are reluctant to accept the financing terms currently on offer. Funds who relied heavily on bonds to finance growth are also in a tight spot, especially if they have to refinance anytime soon. Czech banks reportedly continue to offer more attractive term sheets than foreign ones. G City is the new name of Atrium European Real Estate, which also owns Atrium Flora. At least for now…
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