REICO IS EAM Acquires Palladium Shopping Center in Prague for an Estimated €600-700 Million
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Prague, Czech Republic – REICO investment company Erste Asset Management (REICO IS EAM), a subsidiary of the Austrian Erste Group, has successfully acquired the prestigious Palladium shopping center located on Prague’s Republiky Square. The transaction, advised by Wilsons, Cushman & Wakefield, Savills, adn ASB, and financed by a consortium of four banks led by erste Group bank AG, marks a significant investment in the Czech retail market and a strategic move for the domestic investment firm. The property was purchased from German group Union Investment, who had owned the center since 2015.
A Landmark Acquisition for REICO IS EAM
The Palladium shopping center boasts an impressive 60,000 square meters of commercial and office space, complemented by over 850 parking spaces. Attracting up to 60,000 visitors daily, it stands as one of the most prominent retail destinations in the Czech Republic. Dušan Sýkora, Chairman of the Board of Directors of REICO IS EAM, emphasized the importance of client trust and the firm’s robust distribution network, including Česká spořitelna branches, in facilitating the acquisition.
“We were able to buy Palladium thanks to the trust that our more than 150,000 clients have in us, as well as our fantastic distribution network,” stated Sýkora. “We are happy to bring this trophy building into the ownership of domestic investors. With its size,Palladium becomes a stabilizing element of our fund,thanks to which we will be able to achieve long-term returns of 1.5 to 2 percent above the returns from government bonds.”
Strategic Importance and Long-Term Value
REICO IS EAM’s management team highlighted the acquisition’s alignment with their long-term investment strategy. Jiří Horák, Vice Chairman of the Board of Directors, described the Palladium as more than just a property.
“Palladium is not only an iconic property, but also a symbol of stability and lasting value,” Horák explained. “Thanks to its remarkable location, strong performance and quality foundations, it fits perfectly into our long-term investment strategy. We are proud that this exceptional building is becoming part of our portfolio.”
A Rich History and Prime Location
The site of the Palladium shopping center holds a significant place in Prague’s history, with roots stretching back over 900 years. Throughout the centuries, the land served various purposes, including housing a hospital, monastery, and military barracks. Following the sale of the army buildings in the 1990s, a comprehensive reconstruction project transformed the area into the modern shopping center that opened in 2007. Its central location on republiky Square ensures continued high visibility and accessibility.
Transaction Details and Estimated Price
According to reports from SZ Byznys, Union Investment initially sought approximately €700 million for the Palladium. Industry experts suggest the final sale price likely fell within the range of €600 to €700 million, exceeding initial expectations. Tomáš Szilágyi of Colliers commented that achieving a price within this range woudl be a success for the seller.
Union Investment originally acquired the center in 2015 for a record-breaking €570 million (approximately 15.6 billion Czech crowns at the time), marking the highest price ever paid for a real estate transaction in the Czech Republic. The center was purchased from Hannover Leasing at that time. The current sale demonstrates the continued strength and value of prime real estate assets in Prague.
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