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Corn Lofts, Prague, Czech Republic
Summary
Corn Lofts is a beautifully designed building in the high growth area of Karlin, Prague 8. The development is situated just 2 minutes walk from a metro station that is only 2 stops to the city centre.
Very competitive prices for such a high standard
Excellent location in quiet streets just minutes from the city centre
Prague market growing at 20% per annum
One of the most dynamically developing areas of Prague expect strong growth
Very high standard development in a high quality area
Excellent transport links (next to metro and trams)
15/85 payment terms
Best mortgage finance in Central & Eastern Europe
The tree lined streets of Karlin are being transformed into one of Pragues most up and coming postcodes. With a legacy of quality property and old warehouses just minutes from the city centre and the river the regeneration of the area is attracting high end tenants from both the commercial and residential sectors who have seen the benefits of such a location.
The development combines all the essential property investment qualities great location, high quality build and excellent prices.
Download:
Investment Report
and
Price Spreadsheet.
Market Analysis
The Prague property market is increasing on average at 20% per annum currently and the continued strong fundamentals of the economy mean that good growth is expected to continue for the foreseeable future.
It is our opinion that high end properties are currently undervalued compared to the rest of the market (esp when compared to other mature property markets). This end of the market has not grown as much as the lower end recently and is now well positioned (undervalued) for substantial growth. Hence we see this as a safe low risk bet for strong future growth.
The Czech Republic has one of the high growth rates of millionaires in the world currently and a number of Swiss and Austrian private banks have set up branches in Prague to cater for their needs.
Furthermore, expected changes to the income tax rate (down to 15% flat rate) will see the more wealthy in the society have an even high disposable income than currently, inevitably some of this money will find its way into the property market.
Some quick facts/reasons why investing in Prague really adds up:
- continued economic success is pumping huge amounts of money into peoples pockets
- low risk blue chip location
- very low property buying costs
- great mortgage finance
o lowest base rates in Europe (along with Switzerland)
o 90-100% LTV available
- best and most established rental market in CEE
- healthy capital growth rates of 20% per annum
Prices
| Prices | 3,500,000 18,000,000 CZK |
| Payment terms |
100,000 CZK reservation fee
15% deposit (minus reservation fee)
85% completion
|
| Finders Fee | nil |
| Legal Fees | 30,940 CZK (inc VAT) per unit |
Please down the price spreadsheet for full price details.
Price Comparisons:
Prices average around 70,000 CZK/sqm. Prices in the area are even starting to approach the 90-100,000 CZK/sqm level.
We believe that this development is very well priced, and given this area is one of the most dynamically developing areas of Prague prices are sure to continue to rise.
With payment terms of 15/85 combined with the good prices this makes an excellent investment.
Development
The development comprises 7 blocks (A to G) which will house a combination of retail and residential space.
In total 127 apartments will be built.
Designed by award winning Austrian architects Baumschlager & Eberle.
The development combines the unique features of old corn lofts and modern glass architecture to create a stunning development that will have a landscaped central courtyard and contemporary living spaces.
Many units will have external space, which is fitting for such a good quality development.
There will be green spaces in the centre of the development.
Secure parking is found underneath the development.
This will be a gated development and have 24 hour security.
Kitchens are not included and can be arranged nearer the time of completion, current estimates indicate that one should budget 150,000 250,000 CZK for a kitchen.
The developer is a large well renowned company that builds excellent quality developments in this area.
Mortgages
The Czech Republic has the best (and easiest to obtain) finance available in the whole of Central and Eastern Europe, as well as the lowest base rates in Europe (alongside Switzerland).
| Term | Rate |
| LTV | 100% max
80-90% typical |
| Interest Rate | 5 5.5% |
| Term | Up to 30 years |
Refinance and non-status mortgages are also available (subject to status) in the Czech Republic.
The finance market for foreigners in the Czech Republic is developing all the time and thus refinancing at a high price in the future should be relatively straight forward.
Rentals
Given the high quality build and the great location we expect this development to rent very well. Furthermore, deregulation of regulated tenancies are currently pushing up rents substantially in the area.
Looking at comparable rental prices in the area we predict that a typical unit will rent at 350 CZK/sqm/mth.
This gives typical yields of around 4.5-5.5% (unit dependent).
Property Investment International has a full rental program in place to take care of the Letting & Management aspects of your property.
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