Orco buys office block in Prague area being revamped

Orco Property Group SA, a real estate developer that operates in central and eastern Europe, bought an office block in a former blue-collar district adjacent to central Prague for €24 million ($30.8 million). The building is fully occupied by Ceska Sporitelna AS until the H1 of 2008, Orco said in a statement yesterday. The company also bought 20,000 square meters of mixed-use space in other Czech cities as well as 50,000 square meters of land. The developer, which is based in Luxembourg, is betting on the revival of the Czech capital's 7th district, a residential area for factory workers a century ago now undergoing a revamp. Orco bought land in July for a project of residential and commercial space that will be its biggest development ever. The purchases „are directly in line with our strategic development and redevelopment plans for Prague 7,” Senior Vice-President Ales Vobruba said in the statement. „We plan to start with overall building reconstruction in 2008, and following this the transformation into first class office and retail space.” Orco, with properties in the Czech Republic, Germany, Budapest, Moscow and Warsaw, has focused on central and eastern Europe since it entered the region in 1991 to benefit from property prices after the end of 1980s. (Bloomberg)