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CPI Property Group: The Rise of Central Europe's Real Estate Empire
I. Introduction: From Prague to €20 Billion
It's November 1989, and the cobblestones of Prague's Wenceslas Square are trembling under the feet of hundreds of thousands of protesters. The Velvet Revolution has begun. Within weeks, four decades of communist rule will crumble, unleashing an economic earthquake whose aftershocks would create fortunes for those bold—or shrewd—enough to seize the moment.
Few seized it quite like Radovan VĂtek.
CPI Property Group ("CPIPG") is a real estate landlord of commercial property focused on the Czech Republic, Berlin, Warsaw and the Central & Eastern European (CEE) region. CPIPG's owned real estate portfolio is valued at €18.6 billion (as at 30 June 2024), comprising more than 600 commercial properties, over 8,000 international and local tenants, and exposure to multiple geographies and property segments.
The central question of this deep dive: How did a young Czech lawyer, emerging from the chaos of post-communist privatization, build Europe's largest CEE-focused real estate empire? The answer involves opportunistic acquisitions, transformational mergers, bold capital markets maneuvering, and—perhaps most critically—a willingness to buy when everyone else was selling.
Radovan VĂtek is the founder and majority shareholder of the company, holding approximately 89.29% of CPIPG's voting rights directly and through vehicles controlled by him. Clerius Properties (affiliate of Apollo Funds) owns 5.58%.
This is the story of how a voucher privatization scheme yielded one of Europe's largest private real estate fortunes. It's also the story of a company now navigating the challenge of deleveraging after the acquisitions that made it enormous, facing credit rating pressures and skeptical bond markets. The outcome will determine whether CPI Property Group remains a family-owned European champion for generations—or becomes a cautionary tale of acquisition-driven over-extension.
II. The Founder's Origin Story: Radovan VĂtek & The Post-Communist Opportunity
In the early 1990s, Czechoslovakia—soon to split into the Czech Republic and Slovakia—was a laboratory for radical economic transformation. The communist state had owned virtually everything: factories, farms, apartment blocks, office buildings, retail spaces. The question was: how do you privatize an entire economy?
The answer was voucher privatization—an audacious experiment in mass capitalism. Every adult citizen received vouchers that could be exchanged for shares in state enterprises. Investment funds quickly emerged to aggregate these vouchers, creating pools of capital that could acquire controlling stakes in companies valued at a fraction of their true worth.
Radovan VĂtek started his property career in Slovakia's 1990s voucher privatization, before returning to the Czech Republic in 1997. VĂtek, who earned a law degree from the University of West Bohemia, launched his career amid Slovakia's 1990s voucher privatization, acquiring stakes in state assets before relocating to the Czech Republic in 1997 to restructure distressed companies, such as converting a cooperative headquarters into a luxury hotel.
Born on January 22, 1971, in NovĂ© MÄ›sto na MoravÄ›, Czechoslovakia, Radovan VĂtek grew up during a transformative period in Eastern Europe. His early life in a small town provided him with a grounded upbringing.
VĂtek was barely 20 years old when communism fell. By his mid-twenties, he was already building the foundation of what would become a multi-billion dollar fortune. Radovan VĂtek entered the business landscape during Slovakia's voucher privatization program, initiated in the early 1990s to transfer state-owned enterprises to private hands via citizen-held vouchers exchanged for shares. This system, part of post-communist economic reforms after the 1993 dissolution of Czechoslovakia, enabled investment funds to aggregate vouchers and secure controlling interests in undervalued industrial assets amid regulatory gaps and limited oversight.
The move that would define his future came in 1996: In 1996, VĂtek acquired an investment fund, Boleslavsko, which he transformed into his key real estate investment vehicle (now CPI).
He moved to the Czech Republic in 1997, where he took over a cooperative and turned the headquarters into a luxury hotel. The young lawyer had learned a crucial lesson in Slovakia: the real wealth wasn't in the factories—it was in the land and buildings beneath them.
But VĂtek's path wasn't without controversy. In 1997, VĂtek moved to the Czech Republic and bought a cooperative named VÄŤela in a hostile takeover. VÄŤela was established in 1905. Its lifelong establishment had enabled the cooperative to acquire an impressive portfolio of real estate properties, which interested Radovan. He saw the portfolio as a good base on which to develop a real estate empire. He recruited 3000 people to join the cooperative and vote in his favor. They did, and VĂtek changed the status of VÄŤela from a cooperative to a proper company. The members of VÄŤela subsequently sued VĂtek for 13 years for his hostile takeover which they judged illegal.
This combination of legal acumen, aggressive opportunism, and willingness to operate in the gray areas of a rapidly evolving legal framework would characterize VĂtek's career. In post-communist Central Europe, the rules were still being written, and those who moved fastest often wrote them.
"Out of the remnants of socialism in the 1990s, Radovan Vitek built a world-class company," said Edward Hughes, Chairman of CPIPG.
Today, VĂtek is married, with four children, and lives in Switzerland. In May 2015, the family purchased Rydinghurst, a 17th-century house and 200-acre estate in Surrey, England, from British rock star Ringo Starr for ÂŁ13.5 million. As of October 27, 2025, Radovan VĂtek's net worth is estimated at $7.1 billion by Forbes, positioning him as the 554th richest person globally and among the wealthiest individuals in the Czech Republic.
III. Building the Czech Foundation (1991-2008)
CPI Property Group was established in 1991 as Czech Property Investments a.s. (CPI a.s.) by Radovan VĂtek in the Czech Republic, capitalizing on the economic transition following the Velvet Revolution of 1989 and the dissolution of Czechoslovakia.
The early strategy was straightforward: acquire real property at distressed prices in a market where price discovery barely existed. The company initially focused on real estate investments in post-Soviet markets, beginning with opportunities in voucher privatization schemes before shifting to property acquisition and development, primarily in Prague.
In the early 2000s, CPI acquired a wide portfolio of real properties and land in the Czech Republic and Slovakia. His primary focus was the quickly developing retail sector, as the Czech Republic was preparing to join the European Union in May 2004.
EU accession in 2004 was a watershed moment. It meant access to structural funds, regulatory harmonization, and most critically, Western European capital flooding into CEE markets. VĂtek had positioned CPI perfectly for this moment.
In 2002, CPIPG issued its first bonds on the Czech market. Between 1999 and 2003, CPIPG acquired a portfolio of residential assets in the Czech Republic.
CPI Group, with more than 600,000 m², became the largest owner of retail space in the Czech Republic.
Then came 2008—and the global financial crisis. Most real estate investors were in full retreat, licking wounds from overleveraged positions. Property values plummeted across Europe. Credit markets seized. The conventional wisdom was to hunker down and survive.
VĂtek saw it differently.
During the economic downturn, in the absence of competitive bidders, VĂtek significantly increased his investment into the office segment.
This was the "chaos creates opportunity" philosophy in action. While Western European funds were dumping CEE assets at fire-sale prices, VĂtek was buying. The crisis had eliminated competition, created motivated sellers, and opened doors that would have been shut during boom times.
In 2004, he established CPI Property Group, expanding it through strategic acquisitions of undervalued properties during market downturns, which solidified his status as a self-made tycoon and one of the Czech Republic's richest individuals, with personal wealth derived primarily from real estate.
The contrarian approach wasn't just opportunistic—it was disciplined. CPI focused on income-generating assets with long lease terms, preferring stable cash flows over speculative development gains. This conservative underwriting would become a hallmark of the company's strategy.
By the end of the decade, CPI had established itself as the dominant Czech real estate player. But VĂtek's ambitions extended far beyond his home market. The question was: how to scale regionally without diluting control?
IV. Inflection Point #1: The Orco-GSG Acquisition & Transformation (2014)
The answer arrived in the form of Orco Property Group—a distressed Luxembourg-based developer that had crashed spectacularly during the financial crisis.
In 2008 and 2009, after the latest real estate bubble crash, Czech Business Weekly reported problems within the Czech subsidiary – in June 2009 Orco being "still on the verge of bankruptcy and, despite being under protection of a Paris court, might not survive the year without a capital increase from a new investor."
Orco had been an ambitious CEE developer that expanded aggressively in the mid-2000s, accumulating debt that became crushing when the music stopped. ÄŚTK's sources said "Orco struggles a high degree of indebtedness... Orco's debts total as much as some EUR 1.6 billion."
But buried within Orco's distressed portfolio was a gem: GSG Berlin.
In June 2007 ORCO Germany overtook the Gewerbesiedlungs-Gesellschaft (GSG) of Berlin, as ORCO-GSG expanding its real estate managed assets to over 1 million square metres of developed and undeveloped space there, with 44 commercial areas and centres and 235 residential units.
GSG Berlin was the kind of asset that rarely trades—a sprawling portfolio of commercial real estate in a city that would become one of Europe's hottest property markets. The distress at the parent company level created an opportunity to acquire these assets at far below intrinsic value.
In 2014, CPI a.s. combined with Orco Property Group, the majority owner of Orco Germany, which owned a portfolio of office properties in Berlin. Following the company's name change to GSG Group, the company was renamed again to CPI Property Group.
In 2014, CPI underwent a reverse merger with GSG Group S.A. (formerly Orco Germany), forming CPI Property Group with a property portfolio valued at over €5 billion and significantly expanding its footprint into key Central and Eastern European markets including Poland, Hungary, and Romania through GSG's established operations.
The structure was elegant. Radovan VĂtek, previously the sole shareholder of a real estate holding CPI, with this transaction and other share purchases became a 94% shareholder of GSG Group. It has connections for the balance sheet total over €4.4 billion and expected turnover for 2014 amounts to €250 million, which puts it in third place among Central European real estate groups.
The merger enhanced CPI Property Group's capacity for large-scale acquisitions and diversified its holdings into offices, retail, and hotels, positioning it as a prominent player in the post-2008 European real estate recovery.
CPI Property Group's portfolio under Radovan VĂtek's leadership expanded significantly beyond its Czech and Slovakian origins starting around 2014, incorporating prime assets in Germany, including approximately 1 million square meters of commercial real estate in Berlin, which generated substantial rental yields due to the city's strong demand for logistics and office spaces. This move diversified revenue streams, with the German holdings contributing to overall portfolio growth amid Europe's recovering property markets post-financial crisis.
The decision to redomicile in Luxembourg was strategic. The company's headquarters are in Luxembourg, and its shares are listed on the Frankfurt Stock Exchange. This move aligned with the company's relocation and operational base in Luxembourg, where it is incorporated as a Société Anonyme, facilitating streamlined governance and reduced regulatory burdens compared to prior multi-jurisdictional listings.
The Orco acquisition transformed CPI from a Czech champion into a serious European player. But the controversy that would follow the deal also foreshadowed governance concerns that would dog the company for years.
At the end of 2017, VĂtek was fined by the Luxembourg regulator CSSF in relation to the acquisition of shares in Orco Property Group, alleging an "undisclosed concert action." In April 2019, VĂtek and CPI were sued in United States District Court for the Southern District of New York for $1bn of damages.
The lawsuit was filed by a New York hedge fund called Kingstown, along with Investhold LTD and Verali Limited, entities controlled by Marek Čmejla and Jiřà Diviš, who were previously indicted for fraud in Switzerland. The claims included alleged violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") in the United States.
CPI vigorously denied all allegations. In July 2019, the Luxembourg court dismissed Kingstown's 2015 claim against VĂtek's CPI Property Group. On 4 September 2020, the SDNY Court dismissed the claims against all defendants and directed the clerk of the court to close the case.
The legal victories were decisive, but the episode highlighted the reputational risks associated with distressed acquisitions in opaque markets—and the unusual cast of characters that emerge when billions are at stake.
V. The Expansion Years: Capital Markets & Globalworth (2016-2021)
With the Orco transformation complete, CPI entered an aggressive growth phase. The company's capital markets strategy became increasingly sophisticated.
To support this growth, CPI Property Group pursued multiple stock exchange listings for its shares and bonds, starting with the London Stock Exchange in 2007 (through predecessor entities), followed by the Warsaw Stock Exchange in 2009 and the Frankfurt Stock Exchange in 2010. These listings improved liquidity, attracted institutional investors, and facilitated capital raising through bond issuances.
CPIPG has issued more than €8.7 billion (equivalent) of bonds in eight different currencies on the international capital markets.
The company became a pioneer in green bond issuance in CEE. The Group was the first borrower from the CEE region to issue benchmark green bonds in 2019 and has further strengthened its ESG agenda and capital structure by becoming in 2022 the first real estate company from the region to issue sustainability-linked bonds in the amount of €700 million.
In 2017, CPI made another significant move: Acquisition of retail portfolio from CBRE Global Investors.
But the most ambitious expansion came through stakes in publicly-traded competitors. In early 2020, CPI Property Group became the largest shareholder in Globalworth after acquiring a 29.6% stake in the company.
In April 2021, CPI Property Group formed a joint venture with Aroundtown, a property group focused on the German and Dutch markets. The joint venture held a stake of 51.5% in Globalworth and announced a cash offer to fully acquire the remaining stake of 48.8% for €1.57 billion. The offer was partially accepted and Zakiono Enterprises – a company representing CPIPG and Aroundtown, ended up owning 60.6% of Globalworth by August 2021.
As of June 2021, Globalworth's portfolio amounted to €3.1 billion, covering the Polish and Romanian markets. Globalworth is the biggest office owner in Romania and is expanding rapidly in the industrial segment.
The Globalworth deal was structured as a 50/50 joint venture with Aroundtown, itself a major German real estate company. "CPI and Aroundtown are both highly experienced, strong and stable owners of European real estate. Working together as partners will allow us to maximize long-term value while maintaining Globalworth's strong investment-grade capital structure and excellent teams in Romania and Poland," said David Greenbaum, then Chief Financial Officer of CPI.
This partnership approach—acquiring stakes in listed companies rather than direct real estate purchases—offered several advantages: it avoided competitive bidding for assets, provided immediate scale, and retained optionality for future consolidation. But it also created complexity that would later become a governance challenge.
VI. Inflection Point #2: The IMMOFINANZ & S IMMO Transformation (2021-2022)
If the Orco deal made CPI a European player, the IMMOFINANZ and S IMMO acquisitions made it an empire.
The setup was intricate. IMMOFINANZ and S IMMO were both Austrian-listed real estate companies with significant CEE exposure. Adding complexity, they held cross-shareholdings in each other: For historical reasons, S Immo owns 14.2% of Immofinanz while Immofinanz owns 26.5% and is the largest single shareholder of S Immo.
Management of both companies have tried to find a solution to the crossholding through a merger or sale but have been unable to reach an agreement. On 3 December 2021, CPIPG announced the purchase of a 10.8% stake in S Immo.
The announcement sent shockwaves through CEE real estate. In December 2021, the group purchased an 11.4% stake in Immofinanz from Mountfort, a company owned by VĂtek's eldest son. In the same month, CPI purchased another participation of 10.6% in Immofinanz from RPPK Immo, as well as a 10.8% stake in S Immo. By the end of January 2022, the group held 19.25% of shares in Immofinanz after buying 12.69% of shares from S Immo with another participation of around 28.92% conditionally contracted. CPI Property Group effectively grew its stake in Immofinanz to 48.18% because of the transactions.
On 12 January 2022, CPIPG has published the offer document for its Anticipatory Mandatory Takeover Offer for IMMOFINANZ AG. At the beginning of December 2021, the CPI Property Group (CPIPG) announced its intention to make an anticipatory mandatory offer to IMMOFINANZ shareholders.
The bid faced resistance. The board recommends that investors not accept the announced improved offer by CPIPG for IMMOFINANZ's shares and convertible bonds as the price is, still clearly below the current value of the company and does not reflect IMMOFINANZ's substantial growth potential.
CPI increased its offer price. The Share Offer Price has been increased from EUR 21.20 to EUR 23.00 (cum dividend) and the Convertible Bond Offer Price has been increased from EUR 102,746.53 per nominal value of EUR 100,000 to EUR 111,470.29 per nominal value of EUR 100,000.
CPIPG completed the takeover process of Immofinanz and S Immo in May and November 2022, respectively.
The scale transformation was staggering. CPI Property Group's real estate portfolio increased to €20.9 billion in the first half of 2022. It was the result of two large acquisitions of Immofinanz and S Immo and therefore also the net rental income reached the level of €263 million.
The report notes that in 2022 CPIPG had total assets of €23.5 billion, making it one of Europe's largest owners of commercial real estate.
But this growth came at a cost—debt.
In 2021 and 2022, CPIPG signed €3.75 billion of 2-year bridge loans for the acquisitions of Immofinanz and S Immo. In total, €3.4 billion has been spent on the acquisitions, funded by equity, cash and €2.5 billion of bridge drawings. About €900 million of the bridge loans have already been repaid, with €1.6 billion currently outstanding.
Global law firm Dentons advised CPI Property Group (CPIPG) in connection with a €1.852 billion forward start facility to refinance the two-year bridge loans for the acquisitions of IMMOFINANZ and S IMMO, extending their maturity until H1 2025.
The acquisitions created what VĂtek had long pursued: a unified CEE real estate platform covering virtually every major market and asset class. The combined portfolio of CPI Property Group, Globalworth and Immofinanz has an estimated value of nearly €20 billion, with 7 million sqm of developed space, covering every country and asset class in the region.
This story is a prime example of the rise and strength of local capital in CEE, in addition to the gradual decline of influence held by Austrian companies over the region.
The Austrian real estate establishment had been consolidated under Czech ownership. The question now was whether CPIPG could integrate these sprawling acquisitions while managing the debt load that financed them.
VII. The Leverage Challenge & Deleveraging Strategy (2022-Present)
The acquisitions that created CPIPG's empire also created its most pressing challenge: excessive leverage in a rising interest rate environment.
Net Loan-to-Value (LTV) increased to 50.9% at year-end 2022, outside of the Group's financial policy targets. CPIPG's top priority is to reduce leverage through disposals and other measures.
Then came the ratings actions.
S&P Global Ratings has downgraded CPIPG's rating from BBB- to BB+ with a negative outlook. Today, S&P Global Ratings unexpectedly downgraded CPIPG from BBB- to BB+ with a negative outlook.
The Group, as it declares, had no indication a downgrade was coming. S&P was made aware of CPIPG's recent bond issuance plans and assigned a BBB- rating to the transaction. At year-end 2023, Group credit metrics were within S&P's rating guidance. The company recently outlined to the rating agencies the additional steps that CPIPG will take within months around disposals, minority equity, debt repayment, capital structure, and governance.
Moody's held a similarly cautious view. Credit metrics continue to position CPI weakly in the Ba1 rating category. Moody's-adjusted debt/asset will be above 55% in the next 12-18 months, while interest cover will be in the 1.6-1.8x range.
The negative outlook reflects a combination of execution risks on the ongoing disposals required to deleverage the capital structure, address upcoming refinancing needs and resolving some of the structural challenges of the group with relatively weak credit metrics.
CPIPG launched an aggressive disposal program. 2022-2024 - Portfolio optimisation and leverage reduction with the disposal of mainly lower-yielding assets with €2 billion target achieved.
Post-2020, VĂtek has directed CPI toward deleveraging initiatives, executing over €4 billion in asset disposals since 2022 to reduce debt exposure and refinance at lower costs.
The company also brought in external capital partners. CPI Property Group has signed a commitment agreement with British company Sona Asset Management regarding a proposed equity investment of EUR 250 mln in Poland. The equity investment would consist of a significant minority stake in a CPIPG subsidiary holding a portfolio of 11 office properties in Warsaw and two retail assets located in ElblÄ…g and Lublin. The gross asset value of the portfolio is over EUR 1 bln.
"Sona will be an excellent partner for CPIPG as we focus on capital structure priorities for 2024 and beyond," said David Greenbaum, CEO.
The return to bond markets in 2024 was a critical milestone. 2024 – Issued €500 million of bonds in May after a two-year absence from the market; transaction received €3 billion of demand and issued €700 million of bonds in with an orderbook of €4.6 billion in September.
The company plans to dispose €1 billion of assets in 2025 and a further €500 million per year to return to the financial policy target of reported net loan to value of 40%.
The company recorded €1.6 billion in disposal proceeds in 2024, which was slightly short of our expectations. Proceeds from the 2024 sales were used to pay down debt. However, the company's financial metrics did not improve materially, weighed down by declining asset values and rising interest expenses.
CPIPG's property portfolio was valued at €18.2 billion, with highlighted progress in debt reduction—net debt decreased by €1.2 billion. The occupancy rate improved to 92.1%, while net loan-to-value was reduced to 49.6%.
The company's deleveraging and disposal strategy appears to be a medium-term initiative rather than a one-time fix. With refinancing costs elevated, fixed charge coverage is likely to remain under pressure over the long term. As a result, CPI's balance sheet and leverage profile are expected to continue evolving in the coming years.
VIII. Current Portfolio & Business Model Deep Dive
CPIPG's portfolio is split as follows: office assets (46% of the total portfolio by value), primarily in central European capital cities such as Berlin (GSG Berlin) Prague, Warsaw, Bucharest and Budapest; retail assets (26%), primarily in the Czech Republic; residential assets (7%), mainly in the Czech Republic; hotels and resorts (5%); and complementary assets (16%), primarily comprising land bank, development properties and industrial and logistics properties.
CPIPG's properties generated over €796 million of net rental income the full year ended 31 December 2023, up 25.9% up from the previous year, net business income rose to €874 million. As at the end of H1 2024, properties had high occupancy rate of 91.3%.
Occupancy remained at 91.4% with a stable WAULT of 3.5 years.
CPIPG owns a property portfolio valued at over €18 billion, focused on the Czech Republic, Berlin, Poland and the CEE region. Nearly half of the portfolio consists of offices in key central European capital cities of Berlin, Prague, and Warsaw where we hold leading positions.
The geographic concentration in CEE presents both opportunity and risk. CPI Property Group's property portfolio is predominantly concentrated in Central and Eastern Europe (CEE), which accounts for approximately 70% of its total value of €17.8 billion as of 30 June 2025. The Czech Republic serves as the core market, representing 29% of the portfolio (€5.2 billion). Poland contributes 14% (€2.5 billion), focusing on retail assets such as 23 shopping centres and retail parks, alongside offices in key locations like Warsaw. Hungary holds 7% (€1.3 billion), primarily through mixed-use developments in Budapest.
The geographic concentration in CEE exposes the company to economic volatility in the region, including currency fluctuations and occupancy challenges in select markets like Budapest. These risks are mitigated through broad diversification across countries and property uses, as well as ongoing deleveraging efforts.
The integration challenge remains significant. Structural challenges currently exist from a non-full ownership of by now the largest part of CPI's total asset base via Immofinanz, the minority disposal in Poland, and its investment in Globalworth. CPI has announced the goal to simplify the corporate structure with the potential squeeze out of minorities at S-Immo and an assessment of a potential combination with Immofinanz.
Since then, CPIPG has achieved many milestones in effecting our controlling stake and driving these subsidiaries towards a more focused strategy in order to create value in the long run. Some of the changes implemented include changing the Management Board and appointing new Directors to the Supervisory Boards of both Immofinanz and S Immo. CPIPG has also assisted in the reshaping of the strategy and investment focus of each company, with Immofinanz concentrating on retail, while S Immo focuses on offices, and both have been disposing of lower-yielding assets and increasing their exposure to higher-yielding properties in the CEE region.
In 2024, the company reported losses driven by interest costs and valuation write-downs. Net profit recorded a loss of €197 million, an improvement from the previous year's €877 million loss.
IX. Leadership Transition & Governance
In November 2023, CPI Property Group appointed David Greenbaum, CFO of the Group since 2018, to CEO and managing director and was co-opted to CPIPG's board of directors.
David joined CPIPG after 16 years at Deutsche Bank, where he was most recently co-head of Debt Capital Markets for the CEEMEA region.
The CEO transition marked a generational shift. Martin Němeček joined CPIPG in 2011 and served as CEO of the Group and a member of the Board between 2014 and 2023. He played a key role in CPIPG's transformation from a local champion into a European leader over the past decade.
Greenbaum has replaced Martin Nemecek, who resigned today from his roles of CEO, managing director, and member of the board of directors. After a short break, Nemecek will remain with CPIPG in a newly created senior role focused on high-value projects.
Eastern European landlord CPI Property Group SA has elevated David Greenbaum to chief executive officer as the company looks to focus on asset disposals and deleveraging.
The founder's role remains pivotal. Our founder and primary shareholder, Radovan VĂtek, fully supports CPIPG's plans and strategic objectives for the future. Mr. Vitek will retain clear majority ownership of CPIPG and expects the Group to be family-owned for generations to come.
CPIPG's board of directors consists of three independent directors (Edward Hughes, Omar Sattar, and Jonathan Lewis), two non-executive members (Philippe Magistretti, Tim Scoble as Apollo representative) and three members of management (David Greenbaum, Tomas Salajka, and Oliver Schlink).
The governance structure reflects a tension inherent in family-controlled public companies: maintaining founder control while meeting institutional investor expectations for independence. With 89% of voting rights, VĂtek's control is essentially absolute, making independent board oversight more aspirational than practical.
X. Controversies & Legal Challenges
CPIPG's aggressive growth strategy has attracted legal challenges over the years.
Beyond the Orco-related litigation discussed earlier, the company has faced other controversies:
Through a subsidiary, Remontees Mecaniques Crans-Montana Aminona SA (CMA), CPI owns and operates ski lifts, shops, restaurants and other businesses in the Swiss ski resort of Crans Montana. During the 2018 ski season, CMA closed the ski lifts because the town council would not honor an agreement to pay 800,000 Swiss Francs (around $799,000) to CMA for the cost of late-season opening and for running World Cup races. CMA said it did this with the resort's long-term financial interest in mind. The three surrounding towns said the CMA harmed not only the resort's financial interest but also its image, and raised questions about the motivations behind their decision.
In 2019, reports suggested that Swiss prosecutors are investigating a capital raising by (CMA) that took place in 2016 and how the funds were used to augment its stake in a related property company of which CMA already had majority control. Philippe Magistretti, CMA's managing director, said he had not been questioned by Valais prosecutors or even asked to discuss the matter, and that minority shareholders benefited from the transaction.
More recently, in 2024, new legal challenges emerged. A small court in Cyprus has now frozen half a billion euros of his empire. The order came from two old enemies or maybe they were partners— Marek Čmejla and Jiřà Diviš. They said they had once bankrolled him. They said he cheated them. He said they were liars. The court said that, for now, their claim could proceed.
VĂtek denied any secret deal. He said there was no hidden partnership. They said that years ago, they had agreed to share ownership in silence because their convictions made them bad for business. In 2013, a Swiss court found the two men guilty of stealing from a Czech coal company. They had run the money through Swiss bank accounts.
These legal matters remain pending and should be monitored by investors.
XI. Strategic Analysis: Porter's Five Forces & Hamilton's 7 Powers
Porter's Five Forces Analysis
Threat of New Entrants: LOW Commercial real estate in CEE requires substantial capital (billions of euros for meaningful scale), established relationships with local tenants and governments, and deep operational expertise. CPIPG's scale—with 600+ properties and 8,000+ tenants—creates a natural moat. New entrants would struggle to replicate this footprint even with abundant capital.
Bargaining Power of Suppliers: MODERATE Construction and property management services are relatively commoditized. However, specialized contractors for development projects in specific CEE markets can exert pricing power. CPIPG's in-house property management capabilities reduce dependency on third-party suppliers.
Bargaining Power of Buyers (Tenants): MODERATE to HIGH Office tenants increasingly have leverage in a post-COVID world where remote work has shifted the supply-demand equation. CPIPG's portfolio concentration in offices (46%) creates exposure to this structural headwind. Retail tenants face their own challenges from e-commerce, though CPIPG's focus on Czech retail parks (convenience-oriented) partially insulates against pure e-commerce pressure.
Threat of Substitutes: MODERATE For office space, the substitute is remote work—a genuine structural threat. For retail, e-commerce substitutes physical stores. CPIPG's residential and hotel segments face different substitute dynamics but are smaller portfolio components.
Competitive Rivalry: MODERATE CEE real estate markets are less competitive than Western European markets, with fewer institutional players. CPIPG's consolidation of Immofinanz and S IMMO eliminated significant regional competitors. The remaining competition comes from local players and opportunistic Western European capital.
Hamilton Helmer's 7 Powers Framework
Scale Economies: CPIPG benefits from spreading fixed costs (management, technology, compliance) across a larger asset base. Administrative economies are real but limited—each property still requires local management.
Network Effects: Minimal in commercial real estate. Unlike platforms, adding tenants doesn't make properties more valuable to other tenants.
Counter-Positioning: CPIPG's willingness to buy during distress (Orco in 2014, assets during COVID, IMMOFINANZ during market turmoil) represents a form of counter-positioning. Established players often cannot stomach the risk that CPIPG has historically embraced.
Switching Costs: Tenants face meaningful switching costs—physical relocation, business disruption, lease penalties. However, these costs apply to any landlord and don't specifically favor CPIPG.
Branding: The "myhive" office concept (acquired through IMMOFINANZ) provides some branding value. However, commercial real estate generally lacks strong brand premiums compared to consumer businesses.
Cornered Resource: CPIPG's GSG Berlin portfolio represents a potentially irreplaceable resource—the accumulated historical commercial real estate in one of Europe's most dynamic cities. Similar portfolios simply cannot be assembled today.
Process Power: CPIPG's decades of experience in CEE markets, established tenant relationships, and institutional knowledge of regulatory environments constitute meaningful process advantages over new entrants.
Assessment: CPIPG's competitive position rests primarily on scale economies, the cornered resource of GSG Berlin, and process power from decades of regional expertise. The company lacks the network effects that create winner-take-all dynamics in technology, making it vulnerable to well-capitalized competitors willing to accept lower returns.
XII. The Investment Case: Bull vs. Bear
The Bull Case
Unique CEE Platform: CPIPG offers unmatched exposure to Central and Eastern European real estate. The region benefits from EU membership, growing middle classes, nearshoring trends (manufacturing moving from Asia to CEE), and still-developing consumption patterns. No other public vehicle provides similar scale and diversification.
Inflation Hedge: The Group has a low-cost, long-dated debt maturity profile and a high degree of indexation in our rental contracts (90%+) which should support ICR going forward, particularly as deleveraging targets are achieved. With inflation-linked rents, the portfolio naturally hedges against the currency depreciation that historically plagued CEE investments.
GSG Berlin Crown Jewel: The Berlin portfolio acquired through the Orco transaction may be worth more than the market credits. Berlin remains one of Europe's fastest-growing cities with structural undersupply of commercial space. This asset alone could justify a significant portion of enterprise value.
Management Track Record: Whatever controversies have surrounded VĂtek, his track record of buying distressed assets and creating value is documented. The current deleveraging program, while painful, demonstrates financial discipline.
Family Ownership Alignment: With 89% ownership, VĂtek's interests are aligned with minority shareholders. The family's stated intention to hold for generations suggests patient, long-term capital management.
The Bear Case
Leverage Remains Elevated: Despite significant disposal proceeds, LTV remains around 50%—above the company's own 40% target. In a rising rate environment, interest expense continues to pressure profitability.
Office Structural Headwinds: With 46% of the portfolio in offices, CPIPG faces secular headwinds from remote/hybrid work. CEE markets may be somewhat insulated (less knowledge worker penetration), but the risk is real and persistent.
Complex Corporate Structure: The ownership of assets through partially-owned listed subsidiaries (Immofinanz, S IMMO, Globalworth) creates governance complexity and potential for value leakage. Any change to the ability to upstream disposal proceeds would weaken CPI's credit quality, as unsecured creditors at CPI's level are structurally subordinated to Immofinanz's and S IMMO's creditors.
Governance Concentration Risk: VĂtek's 89% control means minority shareholders have essentially no influence over strategic decisions. Related party transactions and family involvement in deals (e.g., son's vehicle selling IMMOFINANZ shares to parent) raise governance questions.
Credit Rating Pressure: Sub-investment grade ratings mean higher borrowing costs and limited access to investment-grade-only capital pools. The path back to investment grade is uncertain.
Geopolitical Risk: CEE proximity to Ukraine and Russia creates geopolitical risk premiums. CPI retained the Mamaison All-Suites Spa Hotel Pokrovka, a luxury five-star property in Moscow, which remained in the portfolio as of May 2025 despite heightened sanctions risks following Russia's 2022 invasion of Ukraine.
XIII. Key Metrics to Track
For investors monitoring CPIPG's ongoing performance, three KPIs warrant particular attention:
1. Net Loan-to-Value (LTV)
Currently at approximately 50%, the company targets 40%. Progress on this metric signals deleveraging success and path toward investment grade ratings. Each percentage point of reduction requires roughly €180 million of net debt paydown at current valuations.
2. EBITDA Interest Coverage Ratio (ICR)
Lost EBITDA, related to €1.2 billion disposals completed year to date, and higher refinancing costs will result in persistently low EBITDA interest coverage at around 1.6x-1.8x over the next 12-24 months compared to 1.8x as of year-end 2023.
Rating agencies want to see ICR improve toward 2.0x or higher. This requires either rent growth exceeding interest cost increases or significant debt reduction—a challenging balancing act when disposals also reduce EBITDA.
3. Like-for-Like Rental Growth
CPI's operating performance has been solid historically with a recent slowdown in Q1 2025. Like-for-like rental income growth was down to 0.6% in Q1 2025 after 3% in 2024 and higher levels in 2022 and 2023 driven by indexation.
Like-for-like growth indicates underlying portfolio health independent of acquisitions and disposals. Sustained growth above 2-3% demonstrates pricing power and tenant demand—critical for organic deleveraging.
XIV. Looking Forward: The Next Chapter
CPI Property Group stands at an inflection point. The acquisition-driven growth that built the €20 billion empire is now constrained by leverage and credit concerns. The focus has shifted definitively toward deleveraging, integration, and operational excellence.
Confident in achieving or exceeding €1 billion disposal target for 2025; at least €500 million targeted for 2026 and 2027. Focus on operational performance, further deleveraging, and simplification to regain investment grade ratings.
The corporate structure simplification remains a priority. Immofinanz will be rebranded as CPI Europe following a proposal forwarded by the group's majority shareholder CPI Property Group that was passed in a meeting of shareholders.
The question for investors is whether CPIPG can successfully navigate from growth-at-any-cost to sustainable cash flow generation. The assets are real, the portfolio is substantial, and the regional platform is unique. But the balance sheet constraints are also real, and the execution challenges are meaningful.
For Radovan VĂtek, now in his mid-fifties, the challenge is different from the one he faced as a young lawyer buying into voucher privatization schemes. The opportunity set has changed. The company he built must now mature—simplifying its structure, reducing its leverage, and proving it can generate sustainable returns for all stakeholders.
The story of CPI Property Group is, in many ways, the story of post-communist Central Europe itself: the chaos that created opportunity, the accumulation of assets, and now the question of how to translate that accumulation into lasting prosperity. The next chapter remains unwritten.
Regulatory Note: Material legal proceedings remain ongoing, including litigation in Cyprus related to historical business relationships. Credit ratings from S&P (BB+/Negative) and Moody's (Ba1/Negative) reflect agency concerns about leverage and execution risk on the deleveraging program. Investors should note the concentrated ownership structure (89% family control) which limits minority shareholder influence over corporate governance and strategic decisions.
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