The appreciation of the shares of the Czech Housing Fund in 2020 reached 6.4%
* There is also an increased interest in rental housing in district cities.
* In addition, the growth in demand is also driven by the deteriorating availability of one's own housing and stricter conditions for obtaining a mortgage loan.
The Czech Housing Fund announces economic results for 2020, which, despite the pandemic situation, exceeded planned expectations. Net profit increased by as much as 238% and the Fund also achieved an annuized appreciation of 6.4% p.a. The first investment fund on the Czech market, which offers investors the opportunity to invest in rental housing, also increased its net business assets by up to half year-on-year. It reports an increase of 43.27% in the volume of new investments.
Jakub Kořínek, co-founder of the Czech Housing Fund, adds to the economic results: “The year 2020 was very successful for the Fund. We have made two new acquisitions and are working on more. The fund has both sufficient financial resources to expand its portfolio and also many market opportunities, which we will try to make the most of this year. We are also constantly expanding our network of distribution and business partners and have increased the value of the Fund's assets by almost 50%. The appreciation of shares for investors reached 6.4% p.a. Since its establishment, the fund has thus succeeded in fulfilling its objectives (targeted return of 6 to 10% p.a.) and in continuously improving the resources of its investors. Investors who joined the Fund in August 2018 can be satisfied, as they appreciated their shares by a total of 16.85% at the end of 2020."
The Český Bydlení Fund started its activities in the summer of 2018. Last year, according to the realitníni-fondy.cz portal, which monitors a total of 24 real estate funds operating in the Czech Republic, it became the sixth most profitable investment fund and the second most profitable fund focused on the residential market in the Czech Republic.
According to the founders of the Fund, the greatest demand for rental housing is still in Prague and in most regional cities, where people have greater job opportunities, the opportunity to learn and develop their quality of life. Compared to personal ownership, there is a growing interest in rental housing. The trend has started in recent years, but last year it was deepened by the coronavirus crisis, which for many people means a loss of income and the need to save more. “We are already seeing increased interest in rental housing in district cities. In addition, the growth in demand is also driven by the deteriorating availability of one's own housing and stricter conditions for obtaining a mortgage loan. In larger cities, it is becoming increasingly difficult to obtain a mortgage even with an average or slightly above-average income, so rented housing is practically the only alternative, ”outlined the related influences, the co-founder of the Czech Housing Fund, Jakub Kořínek.
Forecast of the rental real estate market for 2021
According to the founders, an important factor for the increase in interest in rental housing is also the insufficient construction of new flats, which cannot satisfy local demand in most localities, and this naturally leads to further price increases in real estate. The demand for rental housing will be increased in 2021 by the continuing economic downturn, uncertainty and redundancies in some sectors of the economy. Ownership housing thus becomes completely unaffordable for many people. "We expect that this trend will continue in 2021, last year's data also showed us that the growth of housing prices and rents will not be stopped even by a pandemic and economic recession," said Jakub Kořínek.
Investors are interested, the Fund still has an annual appreciation of 6% p.a. and more
According to the founders of the Fund, the general trend of rental housing in larger and smaller cities is a gradual decline in revenues. Until a few years ago, investors bought apartments and apartment buildings with a yield of over 10% p.a., at present this phenomenon is no longer evident even in less attractive localities. The biggest interest among investors is the capital cities of Prague, Brno and Pilsen. “There are currently a relatively small number of institutional investors in the Czech Republic and they have various acquisition strategies. As a result, there is less competition in the regions, so there are more opportunities with interesting returns. Thanks to its unique focus on apartment buildings in the regions, our Fund certainly cannot complain about the lack of opportunities, and thus it succeeds in buying real estate with an attractive return, ”said Jakub Kořínek about other opportunities on the market.
Investment plans of the Czech Housing Fund for 2021
In 2021, the fund wants to continue its investment strategy: to look for profitable apartment buildings in cities with a good socio-economic structure and a developed rental housing market. “In terms of volume, we would like to multiply our portfolio several times, which in practice means the acquisition of lower hundreds of flats. Of course, prices will always depend on specific investment opportunities, but the total volume should be in the lower hundreds of millions of crowns,” Jakub Kořínek explained the Fund's plans.