Czech Housing Fund achieved its best economic results in its history in 2021

by   CIJ News iDesk III
2022-06-09   12:20

The effects of the pandemic, rising inflation and the refugee crisis are significantly increasing interest in rental housing. Last year, the fund appreciated investors' funds by 7.72% by increasing the value of growth investment shares by this percentage. The fund also significantly increased its net trading assets.

Last year, the Czech Housing Fund reported the best results in its management over its four-year history. Investment appreciation reached 7.72% p.a. and thus exceeded the expected expectations. In the Czech market, the historically first investment fund of qualified investors, which offers investors a strategy of investing in rental housing, its net business assets increased by more than 65%, which indicates a significant increase in investor interest in the strategy offered by the Fund. This year, the Fund is expanding its investment strategy by investing in rental housing in Slovakia, which aims to ensure a further stable return on its investments and also to further strengthen investors' interest in new investments.

Jakub Kořínek, co-founder of the Czech Housing Fund (Fond), comments on the economic results: “The year 2021 was a significant success and a significant shift for the Fund. For the fourth year in a row, the Fund has been able to deliver the expected rate of appreciation to investors. For those who joined the fund at its launch, the appreciation at the end of 2021 is 25.88%. We would like to use the excellent result from the previous accounting period for the planned growth of the fund, expanding its investment strategy and also strengthening the fund's background and human capacities to ensure similar or even higher investment value in the long run, even with significant growth in fund assets. We expect a record inflow of new investments this year also thanks to our distribution partners, which will be accompanied by new real estate acquisitions in a similarly record volume. We are convinced that this will reach another historic milestone in the fund's management."

In 2021, a total of 40,104 newly issued shares (RIAs) were subscribed for in the total amount of CZK 46,862,000. This represents a year-on-year increase of more than 92%; for comparison, in 2020 the Fund issued shares in the total amount of CZK 24,400,000.

Fund investment plans for 2022
The Czech Housing Fund has big plans for this year. The fund significantly expands its investment strategy The basis of the strategy remains the successful expansion of the portfolio of apartment buildings throughout the Czech Republic through new acquisitions. A novelty is the development of our own projects. These may include a development element, which is reconstruction or re-approval, or even smaller turnkey construction.

"We want to expand the scope of the Fund to the Slovak market and focus on acquisitions of local profitable properties. In the Czech Republic, we plan to further expand the distribution network and support the growth of fundraising. At the same time, we plan to more than double the volume of the Fund's assets and its efficient placement by the end of this year, which will ensure further interesting appreciation for investors,” outlines Petr Illetško, the Fund's executive director, this year.

The availability of one's own housing is deteriorating in the Czech Republic, and interest in rents is rising
Current market data show that rents have already returned to their original values ​​before the coronavirus crisis, and double-digit growth was recorded year-on-year in many localities. In addition, given the current difficult economic and geopolitical situation, the Fund expects demand for rents (as well as their prices) to continue to grow. The growth rate of their prices could surpass the growth of real estate prices for the first time this year after many years. "Even this year, given the current level of interest rates, construction cost prices and current price lists of developers, we cannot expect an improvement in the availability of our own housing. In addition, this solution often becomes uneconomical for people financing housing with a mortgage, where the monthly payment can in some cases, especially in Prague and Brno, reach twice the value of the rental price for a comparable apartment," points out David Fogad, Commercial Director of the Czech Housing Fund.