PRAGUE-Patron Capital of London made its first major investment buy in the Czech Republic recently, paying $22.9 million (Euro 19.2 million) for a fully-leased 108,000-sf office building here called Burzovni Palac and known as the stock exchange building.

Sources at Patron tell the sellers were a Czech investor commonly known as CMN, which owned 66% of the building, and the Prague Stock Exchange, commonly known as BCCP, which owned 34% of the building and is leasing back a substantial portion of the building on a long-term basis.

The property is located in the historical old town center of Prague 1. The building is comprised of 95,000 sf of office space, 13,000 sf of retail space and 194 car parking spaces. The office space is fully leased. In addition to the Prague Stock Exchange, tenants include Deloittes, VUB Bank, Etel, and SCP, the government owned securities processing operation. Tenant rollover during the next 24 months is approximately 35,500 sf, sources at Patron tell

“Burzovni Palac is a tremendous addition to our portfolio, and this transaction establishes a foundation and presence for Patron Capital in a dynamic Central European emerging market,” says Tad Shay, Patron’s executive director. “Burzovni Palac represents a typical deal for us as it was complex and time consuming acquisition, negotiating with two vendors that owned distinct and separate demised areas while securing four individual pre-leasing arrangements, however; we now control a property with significant upside value”.

Debt financing for the acquisition was provided by HVB. DTZ advised in the acquisition. Knight Frank organized the tender for the vendors. Kilcullen BarHill, a minority joint venture partner in the acquisition, is appointed as asset/property manager and will undertake to refurbish the property over the next year and re-lease space on more institutional-style leases.

Patron Capital invests in property, property-related companies or companies with significant property assets throughout Europe. The company’s strategy is to support existing management teams and provide additional capital as required to help grow and develop the business. To date Patron has invested in properties and companies with assets over Euro 2 billion. Patron’s second opportunistic fund will launch its fundraising in the first quarter 2004.

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