Global real estate company G City has signed a Letter of Intent (LOI) for the sale of the Flora shopping center in Prague, Czech Republic, for approximately €232 million, similar to its book value.
The buyer is an active Czech real estate company. Both parties have signed a detailed (non-binding) Letter of Intent that includes the main terms of the deal and the timeline for its completion, subject to the fulfilment of conditions. The property is pledged as security for a loan of approximately €125 million.
The shopping centre has a leasable area of around 40,000 square meters. It has 770 parking spaces and is considered one of the leading centers in Prague.
Flora shopping center sale a significant step
This transaction represents another significant step in G City’s strategic plan to divest non-core assets and focus its business.
The property being sold is the company’s last asset in the Czech Republic, and its sale will contribute to reducing the company’s management expenses.
As part of the plan, to date, the Tel Aviv-based company has completed asset sales totaling over 4 billion NIS (New Israeli Shekels), not including the IPO of its subsidiary in Brazil.
In the next two years, the company will work to sell approximately 3 billion NIS worth of additional non-core assets, including the reported transaction.
Exiting Czech Republic
Chaim Katzman, founder and CEO of G City, says, “This transaction represents a significant step in the continued implementation of our strategic plan for asset sales and business focus, through which we are concentrating our business activities in Central Europe on Poland. With the completion of the sale of this asset, we have completely exited the Czech Republic, which, among other things, will continue to reduce our management expenses.
“The value of the property in this transaction provides further proof of the quality of our unique portfolio, its economic rarity, and the significant value inherent in our other assets as well.
“We will continue to work towards realizing the plan alongside advancing measures for significant efficiency improvements in the company, as well as implementing the plan to focus the activities of our subsidiary Citycon, through the sale of non-core assets amounting to nearly one billion euros, reducing leverage, and increasing its operational efficiency.
“Along with the sale of non-core assets and reducing leverage as part of our strategic plan, we are also strengthening our presence in our core countries: Israel, Poland, and the USA.
“In Poland, we are currently completing an additional residential project (‘Pirely’) comprising 442 apartments, the rental of which will begin in the coming days at rental rates approximately 30% higher than those in the business plan. In Tampa, Florida, we have already received a partial Form 4 for a 334-apartment building we constructed, and we are renting apartments there at rental rates approximately 40% higher than planned”.
About G City
G City is a global real estate company engaged in the acquisition, repositioning, development, and management of income-producing mixed-use real estate including retail, offices and residences in densely populated urban areas in major cities As of 30 September 2023, the group has 92 properties spanning approximately 1.9 million square meters of leasable area with a value of approximately 37 billion NIS.
