Lincoln Property Company has jointly invested with Czech investment platform, Upvest, to acquire Zirkon Office Center in Prague, from Czech investor, CMN.
The parties declined to place a value on the deal, but said the asset is located in Prague’s most popular location for living and working, known as the Karlin district. Zirkon Office Center comprises 11,500 m2 of rentable office space spread across five storeys. Lincoln Property Company will be in charge of the asset management and redevelopment of the building as it looks to enhance its ESG credentials to ensure it meets the future requirements of its tenants.
Speaking about the acquisition, Štefan Puci, investment director at Lincoln, which is a Dallas-based private US company, said: ‘Thanks to the exceptional location right next to public transport, the efficient shape of the office floors and the building’s uniquely authentic history, we will be able to deliver a very attractive mixed-use product.’
He explained there had been more than 40% rental growth during the past five years at its neighbouring building, Palác Karlín, due to the very strong interest from Czech and international office and retail tenants for this specific submarket.
Upvest specializes in debt investments, but also enables investors to directly participate in real estate investments. Upvest has been part of the Komercní banka, a Societe General group, since last year after the bank acquired a 96% stake.
David Musil, CEO of Upvest, said: ‘As a single limited partner, we look to select projects, such as the Zirkon Office Center, where we have a high level of conviction that they will deliver appropriate risk-adjusted return to investors.’
‘However, we seek opportunities where we see factors which can significantly de-risk the project. There are several reasons why investing in the Zirkon is Office Center is consistent with this strategy. First, Lincoln Property Company is an ideal general partner for our strategy because Lincoln Property Company has completed a similar project in the same submarket, Palac Karlín. Second, we are already finalizing a negotiation regarding future lease agreement for 25% of the future rental income.’
‘Last but not least, Zirkon Office Center will meet the parameters of high-quality, ESG-compliant real estate and it has an exceptional location in the heart of historical Karlín, which has the lowest vacancy in the Prague office market.’
Lincoln was founded in Dallas in 1965 and is one of the largest full-service real estate companies in the US.
It has over 8,750 employees and has developed more than 17 mln m2 of commercial projects and 220,000 multi-family units, with a current AUM of more than $94 bn (€88 bn).
Lincoln has been active in the European real estate market since the early 1990s, developing more than 2.6 mln m2 in 9 European countries. The platform currently focuses on multiple sectors in the UK, Czech Republic, Slovakia, and Poland.