CPIPG sees expansion in Italy after recent deals

Luxembourg-based CPI Property Group (CPIPG) sees Italy as a potential area for expansion after having completed several key deals in the southern European country recently.

“CPIPG’s expansion into Italy will be driven by careful asset selection and discipline on price,” says Martin Nemecek, CEO of CPIPG.

In 2020, the group acquired majority ownership of Nova RE SIIQ, a listed REIT with a property portfolio valued at more than 120 million euros. CPIPG intends to continue investing in Nova RE over time along with potential long-term partners.

For several years, the group has engaged in discussions with Italian banks and entrepreneurs about bespoke restructuring transactions involving the purchase of loans from banks at steep discounts, combined with agreements to purchase equity from a founder or entrepreneur.

On 25 June 2021 the CPIPG acquired a portfolio of assets which originated from the restructuring of loans from UniCredit to an Italian family company.

The portfolio primarily consists of Maximo, which opened in October 2020 as the first new shopping centre in Rome for more than 15 years. Maximo boasts nearly 100 percent occupancy, a 59,514 sqm location along Via Laurentina in the South of Rome and includes the first Primark in Rome. Through the restructuring, the group also acquired 404,400 sqm of land for development in the Tor di Valle area of Rome, along with other small assets in Italy.

The transaction was structured with the help of the group’s majority shareholder, Radovan Vitek, who purchased the equity first in order to enable CPIPG’s engagement in the restructuring while ring-fencing the group’s exposure to unrestructured loans.

Now that the restructuring has been completed, and the loans purchased from the bank with a steep discount, the group finished the transaction by purchasing the equity from our majority shareholder.

The total consideration paid by CPIPG represented a discount to the expected market value, and consisted of 318 million euros including a 114.5 million euro reduction in shareholder loans.

CPI PROPERTY GROUP is a leading owner of income-generating real estate in Berlin, Prague, Warsaw and the CEE region.

Berlin deals

In recent years, CPIPG’s subsidiary GSG has completed several office developments in Berlin.

Each of these developments has proven highly successful in terms of occupancy, rent, and value growth. Building on this success, GSG intends to continue pursuing development on a modest scale.

On 25 June 2021, the group acquired a land plot with an area of 81,500 sqm in Schönefeld directly adjacent to the new airport in Berlin. Also on 25 June 2021, the group acquired a 50 percent stake in three future developments in central Berlin locations for an aggregate amount of 15.3 million euros.