PPF Group acquires Quinn Hotels Prague, the owner of Hilton Prague

PPF Group, led by Renáta Kellnerová and her family, has acquired Quinn Hotels Prague, the owner of Hilton Prague, the largest hotel in the Czech Republic. The transaction, confirmed by PPF, represents a strategic move to strengthen the group’s real estate division in the tourism and congress tourism sectors. While the financial details of the deal remain undisclosed, the acquisition is under review by the Office for the Protection of Competition (ÚOHS), which has yet to issue a decision.

“The proposed merger primarily concerns hotel accommodation services and conference and congress organization,” noted the ÚOHS.

Robert Ševela, Chairman of the Board and CEO of PPF Real Estate Holding, emphasized the strategic importance of the investment. “PPF Real Estate focuses on comprehensive real estate investment and portfolio management across all segments, including tourism and congress tourism. Hilton Prague perfectly aligns with this strategy, contributing to long-term and sustainable value through active property management,” Ševela stated.

The Hilton Prague, originally built as the Atrium Hotel in 1991 by the state-owned Cedok in collaboration with French firm CBC Paris, boasts 11 floors, 791 rooms, and a convention area spanning 5,000 square meters. It has hosted prominent figures, including U.S. Presidents Bill Clinton, George W. Bush, and Barack Obama, as well as notable stars from film and music.

Quinn Hotels Prague, owned by Luxembourg-based Quinn Group Luxembourg Hotels, reported a net turnover of CZK 1.3 billion in 2023 but ended the year with a loss of CZK 160 million. An independent valuation by CBRE in December 2022 placed the hotel’s value at €250.4 million (approximately CZK 6 billion). Industry estimates suggest the transaction price could range between CZK 6.25 billion and CZK 8.25 billion, with some reports indicating a potential price exceeding €350 million (CZK 8.8 billion).

PPF Group operates in Europe, Asia, and North America, with investments spanning financial services, telecommunications, media, biotechnology, real estate, and engineering. The group’s assets total €44.1 billion (CZK 1.1 trillion), and it employs 47,000 people worldwide. Key subsidiaries include Air Bank, Cetin, O2, Central European Media Enterprises (CME), PPF Real Estate Holding, Škoda Group, and CzechToll.

Source: PPF Group and CTK
Photo: Hilton.com

PKP PLK launches tender for Warsaw railway ring road upgrades worth PLN 1.3 billion

Polskie Linie Kolejowe (PKP PLK) has announced a tender for the construction and modernization of the Czachówek Wschodni–Pilawa railway section, including a new bridge in Góra Kalwaria. The investment is estimated at approximately PLN 1.3 billion, the company reported.

The selected contractor will prepare detailed project designs and carry out construction works on the Czachówek Wschodni to Pilawa segment. The project will involve upgrading tracks, traction networks, and traffic control systems, enabling passenger trains to travel at speeds of up to 120 km/h. Freight trains will also benefit from similar speeds on the upgraded tracks, enhancing the freight ring road connecting Skierniewice and Łuków, which bypasses Warsaw.

A major component of the project is the construction of a new two-track railway bridge over the Vistula River in Góra Kalwaria, replacing the current single-track bridge. This improvement is expected to eliminate a bottleneck, increasing the capacity of trains on this route.

Travelers will benefit from upgraded stations and stops, featuring modern platforms accessible to individuals with limited mobility. Additional amenities, including shelters, benches, and enhanced passenger information systems, will also be installed.

The modernization of the Czachówek Wschodni–Pilawa section and the bridge in Góra Kalwaria will be carried out from 2025 to 2028, with co-financing from the European Union under the Connecting Europe Facility. A separate project to modernize the Skierniewice–Czachówek section is scheduled for 2026–2029.

Source: Polskie Linie Kolejowe and ISBnews
Photo: Polskie Linie Kolejowe

Arctic Paper seeks new partner for battery energy storage project

Arctic Paper subsidiaries, Arctic Paper Grycksbo AB and Arctic Paper Munkedal AB, have terminated their agreements with S.E.R. Sverige AB regarding the installation and grid connection of battery energy storage systems, the company announced. Arctic Paper now plans to continue the project with a new partner.

Initially, the companies signed 15-year agreements with S.E.R. Sverige in May to install 24 MW battery energy storage facilities at the Grycksbo and Munkedal paper mills. These facilities were intended to provide system services to Svenska kraftnät, Sweden’s power system operator, with an expected contribution to Arctic Paper’s annual consolidated EBITDA of SEK 10–30 million within the first two years of operation starting in 2025.

Arctic Paper, a leading European producer of volume and high-quality graphic paper, has been listed on the Warsaw Stock Exchange since 2009 and is part of the mWIG40 index. In 2023, the group reported consolidated sales revenues of PLN 3.55 billion.

Source: Arctic Paper and ISBnews
Photo: Arctic Paper Group

GDDKiA Poland: 21 bypass projects underway, 15 in tender phase

As part of the “100 Bypasses for 2020-2030” program (PB100), 21 bypasses are currently under construction, while tender processes for an additional 15 are underway, according to the General Directorate for National Roads and Motorways (GDDKiA). Five bypasses completed under the program are already in use, and preparatory work is ongoing for another 59 projects.

The 21 active projects span nearly 171 km, including 9 km of road expansions, with a total investment exceeding PLN 3.3 billion. Meanwhile, the 15 bypasses in the tender phase will cover over 136 km, including 12 km of expansions. GDDKiA is also preparing plans for 59 more bypasses, adding approximately 568 km to the network.

The bypasses under PB100 are primarily classified as GP roads (main accelerated traffic). While most will feature a single carriageway, roads passing through urban areas with significant traffic volumes will be constructed as dual carriageways. In total, the program envisions over 800 km of new roads aimed at redirecting heavy transit traffic away from cities and towns, alleviating congestion and improving urban living conditions.

This ambitious initiative highlights Poland’s commitment to enhancing its road infrastructure and addressing the challenges of transit traffic in populated areas.

Source: GDDKiA and ISBnews

Economic forward looking indicator shows slight improvement but structural challenges persist

The Forward Looking Indicator (WWK), an early predictor of future economic trends, rose by 0.5 points in December 2024 compared to the previous month, signaling a modest upward trend in the latter half of the year. Since its low point in July 2024, the index has improved by 2.5 points, driven primarily by sustained consumer demand and a mild increase in business optimism regarding future financial conditions and economic growth prospects. However, these improvements have not yet translated into a broader, sustainable economic recovery.

Despite some encouraging signs, critical economic indicators remain subdued. The inflow of new orders to manufacturing firms has shown no significant improvement, demand for corporate investment credit remains weak, and investor activity on the Warsaw Stock Exchange continues to stagnate. These factors underscore the challenges in transitioning the economy toward a more dynamic and modern growth trajectory.

Looking ahead to 2025, economic growth is expected to rely heavily on consumer spending, fueled by robust wage increases and social benefits. However, this consumption-driven growth is unlikely to curb inflation or foster structural economic modernization.

Sectoral Performance and Index Components

Of the eight components of the WWK index in December, four showed slight improvement, two declined, and two remained unchanged.
• Industrial Labour Productivity: The most notable improvement was in labour productivity, but this was largely a temporary effect of fewer working days and workforce reductions in the manufacturing sector. Over the long term, productivity has been on a downward trajectory since spring 2023.
• Financial Optimism in Industry: Business sentiment surveys indicated a minor, consistent improvement in company financial assessments during the second half of 2024. However, a net 16 percentage points of businesses still reported financial deterioration compared to improvement—a level unchanged from a year ago. The coming increase in the minimum wage on January 1, 2025, is expected to add to cost pressures, albeit on a smaller scale than previous hikes.
• Money Supply Growth: Since September 2024, the M3 money supply has been growing in real terms, with November data showing an annual increase of over 3.5%. Notably, cash in circulation rose by more than 10%, hinting at a potential consumption-led economic recovery.

The manufacturing sector continues to struggle with declining new orders, especially in export production. Of 22 industries surveyed, 21 reported declines in export orders. Sectors like clothing, leather, and metal products experienced the steepest drops, with negative order balances nearing 30 percentage points. In contrast, companies in printing and media reproduction fared relatively better in terms of export demand.

While the slight uptick in the Forward Looking Indicator offers cautious optimism, the underlying economic issues highlight the need for structural reforms and a shift toward investment-driven growth. Without significant changes in industrial and financial dynamics, the economy is likely to remain reliant on consumer spending, with limited progress in addressing long-term vulnerabilities.

Source: BIEC

PGE Dystrybucja and Energa-Operator secure PLN 407 million in EU funding for smart grids

PGE Dystrybucja and Energa-Operator have secured PLN 407 million in co-financing from the European Funds for Eastern Poland (FEPW) program to advance intelligent power distribution networks in the region, according to an FEPW announcement.

The funding agreements aim to support projects that enable the integration of distributed renewable energy sources (RES) into the grid, ensure stable energy supply, and foster the growth of zero-emission transport and industry. The total value of these contracts is PLN 687 million, with FEPW contributing PLN 407 million in EU funding.

The newly signed agreements build on prior co-financing efforts under FEPW. The program has already allocated over EUR 160 million in EU funding, with six projects contracted in an earlier phase amounting to PLN 279 million in EU co-financing.

Energa-Operator will receive PLN 63.5 million in EU funding for a smart grid development project in the Płock and Olsztyn branches, with a total project value of PLN 112.5 million. Meanwhile, PGE Dystrybucja will benefit from co-financing for three major projects:
• Skarżysko-Kamienna branch: PLN 119.2 million in EU funding for a PLN 194.7 million project.
• Białystok branch: PLN 172.4 million in EU funding for a PLN 290.7 million project.
• Lublin branch: PLN 52.14 million in EU funding for a PLN 89 million project.

PGE Dystrybucja, part of the PGE Group, plays a pivotal role in Poland’s energy market. The group generates 41% of Poland’s net electricity and holds an 18% share in the heat market, with 10% of its energy derived from renewable sources. PGE’s distribution network spans approximately 5.5 million km², representing a 25% market share in electricity distribution and 33% in sales to final customers. PGE has been publicly traded on the Warsaw Stock Exchange (WSE) since 2009 and is a component of the WIG20 index.

Energa-Operator, part of the Orlen Group since April 2020, is Poland’s third-largest distribution system operator by energy supply and the third-largest electricity seller to final customers. The group’s power plants have a total installed generation capacity of approximately 1.34 GW.

The funding and projects under FEPW aim to modernize Poland’s energy infrastructure, enhancing its resilience, efficiency, and alignment with sustainable energy goals.

Source: PGE Dystrybucja and ISBnews
Photo: PGE Dystrybucja

Talent exodus linked to lack of workplace flexibility

Recruiters report a significant exodus of talent from companies insisting on strict in-office work policies, with employees increasingly prioritizing flexibility in their job decisions. A survey of over 500 in-house and agency recruiters has revealed a sharp rise in applications from workers at companies mandating five-day-a-week city center office attendance. Two-thirds (67%) of recruiters noted an uptick in candidates seeking roles elsewhere after being required to spend more time in central offices.

The research, conducted by International Workplace Group (IWG), the global leader in flexible workspaces with brands like Regus and Spaces, highlights the growing importance of hybrid work models. The findings coincide with recent announcements by firms doubling down on either strict office mandates or more flexible hybrid policies, underscoring a major shift in workplace preferences.

The study underscores the importance of hybrid working for businesses aiming to attract and retain top talent. Three-quarters (75%) of recruiters said candidates have rejected job offers lacking flexible work options, and 72% reported that firms without hybrid models are losing competitiveness in the job market.

“Flexibility is no longer a luxury for employees—it’s a necessity,” said Mark Dixon, CEO and Founder of IWG. “Employees want workspaces closer to home that keep them motivated and productive. Long commutes and rigid schedules are simply not viable for many workers anymore.”

Separate IWG research among white-collar workers in full-time city office roles highlights significant challenges for such employers. Nearly half (46%) of respondents are actively searching for jobs without long commutes, and 63% believe their employer risks losing top talent. High commuting costs (44%) and time (40%), coupled with diminished work-life balance (33%), are the main frustrations, with one in five employees (21%) reporting daily burnout.

Employees increasingly prefer flexible workspaces closer to home. More than three-quarters (77%) of respondents consider a nearby workspace essential for their next job, with workers four times more likely to choose local offices over city-center locations. Only 25% believe central offices are necessary for job effectiveness, while 55% feel empowered by the option to work from multiple locations.

IWG’s research reveals that three-quarters (75%) of CEOs adopting hybrid models reported increased productivity, corroborated by Stanford economist Professor Nicholas Bloom’s findings of a 3%-4% productivity boost. Flexible work arrangements also enhance employee satisfaction and reduce business costs, making them a compelling choice for companies.

“Hybrid working is a win-win,” said Dixon. “It enhances productivity, job satisfaction, and cost-efficiency while giving employees what they value most—control over their time and the freedom to ditch long commutes.”

Professor Bloom predicts companies mandating strict office attendance could face a 35% increase in quit rates. He suggests such firms, including high-profile examples like Amazon, may reverse these policies by mid-2025 due to mounting attrition.

Dom Ashfield, SAP Specialist Recruiter at bluewaveSELECT, echoed these sentiments: “Today’s jobseekers are not just chasing paychecks; they want flexibility and control over their work environments. Employers failing to adapt risk falling behind in the talent race.”

As the demand for hybrid work continues to grow, businesses that embrace flexibility are likely to lead in both retaining talent and driving productivity, while those holding onto rigid models may face mounting challenges in the evolving workplace landscape.

Catella’s CER III Fund makes first Spanish acquisition with residential in Madrid for €60 mil

The Catella European Residential III Fund (CER III) has entered the Spanish market with its acquisition of a recently developed residential property in Madrid for approximately €60 million. This milestone raises the fund’s total assets under management to over €900 million.

Managed by Berlin-based Catella Investment Management (CIM), the CER III Fund collaborated with Catella Asset Management Iberia (Catella AM Iberia) to close the deal. Catella AM Iberia will oversee asset management for the property.

The newly acquired building is situated in the Villa de Vallecas district, southeast of central Madrid. Completed in the first quarter of 2024, it comprises 235 rental apartments spanning 19,198 sqm, alongside two commercial units. The district is known for its robust population growth and strong demand for affordable housing.

“Villa de Vallecas is a popular neighborhood close to Madrid’s city center, offering excellent social infrastructure and public transport within a ten-minute walk,” said Eduardo Guardiola, Managing Director of Catella AM Iberia. “The property is nearly fully let, reflecting the area’s appeal.”

The residential building features a mix of 50 three-room, 115 two-room, and 70 one-room apartments, all equipped with high-quality fittings, electric external blinds, and air conditioning. It also offers 264 car parking spaces, 34 motorcycle spaces, and 235 storage rooms. Communal facilities include co-working spaces, a gym, green recreational areas, a swimming pool, a children’s playground, and a picnic area.

Aligned with CER III’s ESG-focused investment strategy, the property is certified as ‘Very Good’ under the BREEAM sustainability rating and has achieved an A/A EPC rating for energy efficiency and low CO2 emissions. It operates entirely on electricity, with a portion supplied by rooftop photovoltaic panels.

Michael Keune, Managing Director at CIM, emphasized the significance of the acquisition for the fund’s diversification strategy. “The Catella European Residential III Fund targets modern residential properties in high-growth European regions, with a focus on Germany, the Netherlands, France, and Scandinavia. This acquisition marks our first property in Spain, expanding our portfolio to nine European countries.”

CER III is regulated under Article 9 of the EU Sustainable Finance Disclosure Regulation (SFDR), requiring all properties to meet rigorous ESG standards. The Madrid acquisition underscores the fund’s dedication to sustainability and its strategy of integrating environmental, social, and governance principles into real estate investment.

The acquisition positions CER III to capitalize on Madrid’s growing rental market while further enhancing its portfolio’s geographical and ESG credentials.

Czech post-Christmas sales begin, retailers anticipate higher revenues

The post-Christmas sales season officially kicks off today, offering Czech shoppers discounts on electronics, clothing, cosmetics, and more in brick-and-mortar stores and online. The sales will run until the end of January, with many retailers expecting higher revenues than last year. The period will also see a surge in customer returns of unsuitable Christmas gifts.

According to Shoptet, a provider of e-commerce solutions, 85% of e-shops are participating in post-Christmas sales this year, up from 80% last year. Discounts are expected to average 45%, slightly higher than in previous seasons. “Retailers could see up to 25% more sales this year compared to last year. The duration of the sales will depend on how quickly they manage to sell out their stock,” said Shoptet CEO Samuel Huba.

Major retailers such as Alza, Globus, and Tesco have already launched their sales. Alza anticipates strong post-Christmas demand, building on robust pre-Christmas sales. “We expect a year-on-year increase in sales, particularly in categories like sports equipment, driven by New Year’s resolutions,” said spokeswoman Eliška Čeřovská. Tesco plans a second wave of sales starting January 6, expanding discounts to include toys and household items.

Some retailers began their sales earlier, with e-shop Ovečkárna offering discounts since Monday and expecting double-digit growth compared to last year. Alpine Pro, which started its winter range discounts on December 19, is more cautious, citing weather conditions as a factor influencing demand. “We are adapting to trends with collections focused on active lifestyles,” said company representative Barbora Vacková.

Retailers are also preparing for an influx of returns, with most unsuitable gifts being exchanged before the end of the year. Returns typically account for about 1% of total sales, according to Huba.

The Czech Trade Inspection Authority has been monitoring compliance with discount regulations under an amendment to consumer protection laws introduced last year. In the second quarter, inspectors found violations in 41% of 259 inspections. The law requires retailers to base discounts on the lowest price offered in the 30 days preceding the sale, ensuring transparency for consumers.

Retail sales in the Czech Republic have been on the rise, with October marking the 11th consecutive month of year-on-year growth. Sales increased by 5.5% in October, following a revised 4.8% growth in September. E-commerce has been a key driver, maintaining double-digit growth rates throughout the year.

With increased participation in post-Christmas sales and strong consumer demand, retailers are optimistic about closing the year on a high note and setting the stage for continued growth in 2025.

Source: CTK

Czech economy expected to accelerate in 2025 amid stable inflation

The Czech economy is projected to grow by 2% in 2025, driven primarily by household consumption, while inflation is expected to remain at levels similar to this year. Real household incomes are anticipated to rise as nominal wage growth outpaces consumer price increases. Unemployment is expected to inch up but will remain among the lowest in the European Union, according to a survey by the Ministry of Finance and analyses from 13 domestic expert institutions.

Cyrrus Chief Economist Vít Hradil predicts GDP growth will accelerate to 1.9% in 2025, up from approximately 1% this year. “The Czech economy will be driven by domestic factors, particularly household consumption, which is set to rebound after several weaker years,” Hradil said. He also noted that cheaper credit and improved sales prospects should boost corporate investment. However, the economy may face challenges from weak foreign demand, particularly in the industrial sector.

Pavel Peterka, Chief Economist at XTB, expects GDP growth of 2%, attributing it to increased household consumption fueled by a gradual release of savings accumulated during recent years of economic uncertainty. The Ministry of Finance is even more optimistic, forecasting GDP growth of 2.5%, while the Czech National Bank (CNB) predicts 2.4%.

Experts project inflation to hover around this year’s average of 2.5%. Peterka highlighted that food price dynamics, while elevated, should decelerate in the latter half of the year. Meanwhile, growth in service prices is expected to normalize after running at around 5% throughout 2024. Fuel prices are anticipated to exert a deflationary effect.

The CNB has identified service price inflation as a key risk for overall inflation in 2025. However, experts believe the situation will stabilize, keeping inflation under control.

Nominal wages are expected to grow by 5.5% to 6%, leading to real-term wage increases. However, household purchasing power is likely to recover only gradually. Martin Gürtler, an analyst at Komerční banka, estimates that real wages will not return to pre-pandemic levels until mid-2026, with household consumption following a similar trajectory.

Unemployment is forecast to rise slightly to 4% in 2025, primarily due to challenges in the industrial sector, which has been affected by weak demand from Germany. “I don’t expect massive layoffs, as the rest of the economy is well-positioned to absorb potential redundancies,” said Hradil.

Martin Jánský, CEO of Randstad CR, anticipates unemployment to peak in the first quarter of 2025. “Companies are likely to exercise caution in hiring and will focus on maximizing the efficiency of their existing teams,” Jánský noted.

Despite external pressures, the Czech economy is poised for moderate growth in 2025, supported by strong domestic consumption and stable inflation. While challenges in the industrial sector and cautious labor market dynamics may pose hurdles, the overall economic trajectory remains positive, with gradual recovery in household purchasing power and sustained low unemployment.