BASIC INFORMATION

 

  • the potential for interesting returns from professionally managed office properties rather than residential real estate
  • the opportunity to participate in the growth in value of real estate and lease contracts in periods of increased inflation
  • the possibility of diversification, given the number of lease contracts concluded for properties owned by the Fund
  • investment targeted at high-quality properties
  • the Fund's ability to obtain external funding
  • the Fund’s flexibility and the wide spectrum of the team members' contacts allows it to complete the acquisition process
  • the Fund’s 5% preferential income tax rate

PROCESS OF EVALUATING REAL ESTATE PURCHASED BY THE FUND

The basis of any investment decision is the due diligence (hereinafter referred to as the "DD") and the reports resulting from this process. DD generally entails a multi-stage process of verification. The initial stage involves the preparation of what is known as the technical DD, followed by the legal, financial and tax DD. An independent advisor is also invited during the investment evaluation to determine the expected market price.

The technical DD mainly involves the search and processing of technical data concerning the property to be acquired. This then involves an analysis of the technical condition of the property and the reliability of its documentation. Using the technical DD, current facts, such as the financial status and the technical parameters of the property can be ascertained. The technical DD includes an informative estimate of the costs and the cost-effectiveness.

The legal DD mainly includes a verification of the seller, a verification of ownership rights, or shares in the property and the contractual situation regarding the use and management of the property, including confirmation that there are no undesirable restrictions on (in particular) property rights

The financial and tax DD primarily includes a complete audit of the accounts of the company to be acquired. In this case, the auditor also checks the consistency of the facts presented in the accounting records against the contractual documents. In addition, this part of the inspection also includes checks into the legitimacy of the company’s individual tax costs.

An independent estimate of the value of the property – this aims to determine the property’s market value. During the estimation process, all facts relevant to the property are assessed. The property evaluation takes particular note of the following facts: - geographical concentration, the composition and concentration of certain types of property, the type of property, the number of units, actual rental income, potential rental income, list of tenants indicating rental income, possible indexation, real estate burdens , management costs, potential lifetime and costs of possible improvements.

DD results are always summarised in reports. A business and financial plan is based on an evaluation report prepared for each property.

EXAMPLE OF YIELD FROM PROPERTY

This model does not take into account costs for fees and taxes.

EUR %
investment 10,000,000  
own resources 3,500,000
loan     6,500,000
annual yield 760,000
loan repayment -130,000
investment costs -50,000
property management -22,800
miscellaneous and reserve fund -40,000
profit 517,200 14.78
cash flow 387,200 11.06

Contact

BH Securities a.s. 
Na Příkopě 848/6
110 00, Praha 1
Reception: +420 255 710 710
Fax:+420 255 710 770
E-mail: bhs@bhs.cz
Web: www.bhs.cz

BHS REAL ESTATE FUND SICAV, a.s.
Anežská 986/10,
110 00 Praha 1
Co ID: 05504643 
Tax ID: CZ05504643 
held at the Municipal Court in Prague, insert B 21953

Pavel Borovička
Tel. 255 710 777

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