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In addition to natural market forces, the COVID pandemic and then the war in Ukraine has started to affect property prices, resulting in high inflation, rising interest rates and a change in consumer behaviour. Although these events affect both markets equally, they have different effects on different segments; their effect is different for office buildings and shopping centres, for example.
The paradox is that more expensive bank financing, combined with inflation, is pushing up targeted real estate yields, which is reflected in a decline in property values. There are also positive effects. For example, the production of products is gradually moving to their countries of origin, so-called “reshoring”, and the trend of consumers not to travel so much for products. This favours the appreciation of local retail and logistics parks in the Czech Republic and Slovakia.
In commercial real estate, the most important difference is the competition in the investment market. While the Czech investment market is made up of dozens of players with a high share of foreign investors, there are only a few in Slovakia. On the other hand, this, together with other factors, correlates with their higher performance.

The residential market is largely influenced by consumer appetite, linked to the mortgage market, which is different in Slovakia and the Czech Republic. Interest rates in the Czech Republic are regulated by the Czech National Bank, whereas in Slovakia it is the European Central Bank. Compared to us, Slovak mortgages are cheaper by around 3 percentage points, which has a dramatic effect on demand in the residential market itself.
The property market is cyclical – periods of growth are followed by periods of ‘sobering up’ in the form of falling property values. The strong growth seen in the second half of the last decade peaked around 2021. Since then, property values have been falling again. This presents an opportunity to invest in real estate that is no longer ‘overpriced’.
From an institutional perspective, new funds will have an advantage, as well as funds able to absorb any further price declines. CB Property Investors, a fund established in 2020, has been created for this period and seeks properties in various stages of construction, where the completion of the construction itself will bring about significant appreciation.

It will occupy more than half of the total area in CBPI Park Liberec and will move all its existing operations there – from production to warehouses to offices. With more than 17,000 sqm, it is the majority tenant in this modern facility and more than 500 employees will find work here.

The operation also includes a so-called “clean room” or “clean room” of 3,000 m2, which is approximately the size of 10 tennis courts. Such spaces are extremely important in many industries, including microelectronics. They keep air, and hence product surfaces, minimally contaminated with, for example, dust particles, which has a particular impact on the lifetime of electronics.

“We are working in one of the most dynamic industries of the future and we are pleased that thanks to the new premises we can offer a long-term perspective and stability not only to our employees, but also to our suppliers and other partners,” said Martin Pavlata, the company’s managing director.

The office space is also worthy of note, reflecting design elements from commercial office projects. The management hopes to streamline communication and the flow of materials within the company.

“We are working hard to improve the working environment so that our employees – both current and future – like it and work as well as possible. We are delighted that we can now provide better working conditions for our long-term employees as well.” added Pavla Benešová, HR manager at UCT.

The company was inaugurated by representatives of UCT, representatives of the real estate fund CB Property Investors, the Governor of the Liberec Region Martin Půta and representatives of the Liberec City Council.

Our fund together with another investor bought an industrial park in Liberec. The acquisition came at a time when the owner of the site was looking for a strategic partner to help him finance and complete the park. We will use part of the financing to pay off our liabilities and plan to complete the site so that all tenants can move into their new spaces by the third quarter of 2023.

Michal brings with him experience across the real estate industry. At Knight Frank he was responsible for property management of commercial buildings, at P3 he managed a European industrial portfolio of over 5 million sqm and at Fidurock he worked on residential properties from the acquisition phase through redevelopment to marketing and commissioning. Michal’s approach and know-how are complementary to CB Property Investors’ portfolio.

Michal Navrátil started his career at ORCO Prague and Knight Frank. He also worked for more than a year in the NATO-led ISAF (International Security Assistance Force) mission as a member of the Provincial Reconstruction Team in Afghanistan.

In 2012 he joined the developer P3, where he gradually worked his way up to the position of Group Head of Property Management. He was there as the company acquired new portfolios in the Czech Republic and Europe and grew by leaps and bounds, setting up processes for successful property management and leading a team of internal property managers and external contractors. In total, he was responsible for managing 5.7 million sqm in 12 countries.

His last position before CB Property Investors was at Fidurock, where he was responsible for the development of the residential portfolio as Head of Asset Management.

With his experience in real estate portfolio management and technical expertise in various types of real estate, Michal Navrátil will be a great asset to support the further growth of the fund’s activities.

“My role will not only be about project management and property management, but also about setting up processes. I want to proactively focus on finding gaps in processes and controlling them to minimise risk and maximise returns for investors. Better processes speed up the acquisition process and enable us to manage the rapid growth of the managed portfolio,” explains Michal his motivation.

Commenting on Michal’s arrival, Peter Bečár, Partner at Crowdberry, said: “I know Michal from P3 and I am very happy to be working with him again at CB Property Investors. His contribution is not only in his technical and operational knowledge of the different segments of construction, but also in his insight into creating and increasing the value of real estate. Michal never ended where another department started, but always looked at the portfolio and its management as a whole. This gives a much needed holistic view of real estate. His proactive approach and attention to detail will be an asset when working with our partners and investors.”

Dobré Časy in Ivančice project, which the Fund acquired into its portfolio in April this year, has reached its first major milestone. As of 16 December, it received its first client.

Another important step is that the operator of the home has signed a contract with the Health Insurance Fund of the Ministry of the Interior of the Czech Republic and will conclude cooperation with VZP on 1 January 2023. Thanks to this, the home for the elderly will soon be able to welcome more clients.

“In order for a facility to apply for a contract with a Czech insurance company, it must meet a number of requirements. Material, technical or even personnel requirements. For example, when we received the decision to approve the contract, the Dobré časy home for the elderly already had over 60 employees.,” explains Jan Kvarda, investment manager of the project.

All new clients of Dobré časy can expect above-standard services such as massages, oxygen therapy, music therapy, canister therapy and others. In addition, care includes a healthy and balanced diet and a nutritionist who will focus on the individual needs of each client.

“In the first half of the year, only one fund managed to beat inflation: the CB Property Investors – a relatively new fund of qualified investors, which only this year made its first acquisition (a senior house in Ivančice),” says Jan Traxler, a private investment advisor and expert guarantor of the nemovitostni-fondy.cz portal, which monitors the development of thirty real estate funds focusing on the management and rental of real estate operating in the Czech Republic.

The return of our fund for the first half of this year was 14.27% and for the last twelve months 13.9%. The average annual return of real estate funds in the Czech Republic in the period 2017-2021 was 6.75%. It reached its highest value in 2021 (10.64%).

After two years of work, our strategy of investing in value-added real estate is proving to be appropriate for the current uncertain period. Thanks to this strategy, we are targeting returns above 10% p.a. from the start, a rate that has a chance of beating inflation. We are pleased that after the first acquisition of CB Property Investors – a retirement home in Ivančice – our returns are already above average even compared to other funds and that we can back up the fund’s direction with an above-average return of 13.9%.

We are currently planning further transactions that will most likely increase CB Property Investors’ yield. As a result, we expect our share price to continue to rise and therefore believe that now is an ideal time to invest in CB Property Investors.

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The Dobré časy Senior Home is a new place for a dignified life for seniors with the highest degree of dependence, i.e. those who are fully dependent on the help of another person. “In addition to the usual care, the clients will have access to extra services in the form of hydro-massages, light therapy, workshops or hairdressing services,” says Petr Váka, director of Dobré časy. Of course, there is also a medical clinic right in the building. A café will also be open for the public and clients on the ground floor of the building.

The Ivančická senior citizens’ home would not have been built without private investment. The fund of qualified investors CB Property Investors and Slovak entrepreneur Jozef Gima took part in the creation of Dobré časy, which will offer 167 beds. Peter Bečár, the chairman of the fund’s supervisory board, describes why we decided to invest in the construction of the seniors’ home. We are aware that the senior housing segment is growing and we see that the importance of private investors is increasing, as they help to cover at least part of the shortage of these services. Thanks to the project of Dobré časy, we are part of the solution and we would certainly like to implement more facilities like this. .“

The new home for the elderly is unique for its above-standard services for its clients and the construction itself. In addition to air conditioning and cooling in the rooms, it also allows for recuperation and the use of so-called grey water. It thus shows that its inclusion in the CBPI portfolio makes sense for several reasons:

• the creation of new places to spend a dignified old age, which are in short supply,
• the ecological aspect of the construction and use of the building,
• return of investment

The modern facility for the elderly near Brno will welcome its first clients in September this year and the investors of the CB Property Investors fund will be there.

The newest face of our team is Jan Kvarda, who previously worked in transaction advisory at EY and also has experience in auditing financial institutions at KPMG, where he participated in projects for the largest Czech banks and insurance companies such as EPH and PPF Financial Group, including PPF Real Estate. He has also been involved in the acquisitions of AXA Group, METRO AG, Equa bank and the merger of Air Bank and MONETA Money Bank.

“When I was deciding where to take my career next, my choice fell on Crowdberry mainly because it is a young company with a lot of growth potential that I would like to be a part of. What I particularly appreciate about the real estate team is the ability to adapt to the market. With property prices rising across segments over the past few years, we are looking for opportunities in property development. Conversely, when property prices are more favourable, we will move into acquisitions. We want to bring our investors the best opportunities in every situation ,” says Jan Kvarda, co-author of the Crowdberry Real Estate Report Q4 2021, a brief overview of the latest residential real estate market trends.

Together with Jan Kvarda, our ranks were strengthened by Jan Rovný, whom we have already written about, and marketing manager Libor Pokorný. In the past, he worked for the RS Group and SeneCura.

We hope that thanks to our new colleagues and their experience we will be able to meet not only the team’s goals but also the expectations of our investors.