The Czech National Bank (CNB) has issued a long-awaited certificate to enable banks in the country to launch real estate funds for small investors, with the first one to be set up as early as March 2007 by Ceska Sporitelna Bank' investment vehicle Reico. Speculative trading in real estate has long been available in the country for major foreign investors, but it has largely missed the small investor, newspaper The Prague Post reported.
The Czech National Bank (CNB) has issued a long-awaited certificate to enable banks in the country to launch real estate funds for small investors, with the first one to be set up as early as March 2007 by Ceska Sporitelna Bank' investment vehicle Reico. Speculative trading in real estate has long been available in the country for major foreign investors, but it has largely missed the small investor, newspaper The Prague Post reported.
'Investing in real estate is safe, and the yield is above that of funds investing in bonds,' Reico's General Director Tomas Trck. 'We believe the new funds will attract a lot of retail investors.' The portfolio will consist of office spaces, logistics and retail centres, as well as residential buildings and hotels. Reico hopes to develop a portfolio that will guarantee annual yields of 4% to 7%, Trcka said. The fund will initially focus on the Czech Republic and then consider investments abroad.
Legal barriers preventing banks from launching dedicated real estate funds are expected to be removed in May when the Parliament should pass an amendment to the law. CNB said it expects at least five new real estate funds to launch by the end of 2007.
