International Hotel Investments plc (IHI) is actively evaluating the improved business and commercial potential of its landmark Grand Hotel Prague, following a major change to Prague’s planning framework which has significantly improved both its redevelopment potential and therefore the prospective value of the property.
The Metropolitan Plan recently approved by the Prague City Council, which comes into effect on 1st September following an extensive consultation process, permits the potential conversion of the landmark high-rise 60,000 sqm property to residential use and allows for additional development volume on the hotel’s adjoining vacant land. Together, these changes significantly broaden the development opportunities for the site, IHI plc said.
In light of this significant development, IHI plc has appointed architects and professional advisers to assess the property’s full development potential under the new planning regime. This exercise will also establish an updated valuation benchmark reflecting the enhanced development parameters.
The re-evaluation of IHI’s Prague hotel, which could potentially include an asset sale, forms part of IHI plc’s broader strategy of realising value from its owned real estate portfolio, while increasingly expanding its Corinthia hotels and estates brand internationally, through an asset-light hotel management model, particularly within the luxury segment. This enables IHI plc to grow its international Corinthia footprint with significantly lower capital requirements.
A spokesman for IHI plc said: “The new masterplan for Prague unlocks significantly greater potential for the site and consequently has capacity to enhance its underlying value. This is a very positive development which gives us the opportunity to reassess the property’s development potential and valuation to appeal to a broader target pool of developers and investors”.
IHI plc is a real estate investor, developer and operator, focusing primarily on luxury hotels and its proprietary Corinthia brand.
The new Prague city-wide masterplan places greater emphasis on addressing Prague’s pressing housing needs through the redevelopment and conversion of existing properties, while aiming to continue safeguarding the city’s historic urban fabric. This comes against a backdrop of sustained demand for housing and significant increase in residential property values in recent years.
