Investments in real estate funds are still complementary to investor portfolios. Tom Trka, the founder and manager of the Trigea real estate fund from the Partners financial group, explains in an interview whether it pays off and what their risks are.
Why, according to all people, should they be interested in the possibility of investing in real estate mutual funds? The classic attraction is primarily the nature of the assets. People today want an investment they can look forward to. In addition, real estate is a great diversifying tool and, as one of the small tools, it can push inflation to its advantage.
How do you generally evaluate the willingness of them to invest in real estate funds, for example, in comparison with classic mutual funds? We see a huge breakthrough somewhere around 2015, when real estate funds recorded significant fingers. Today, it is one of the most popular investment instruments, and even the largest domestic fund is a real estate fund.
Real estate funds have a strong position, for example, in Germany. Why do you think the EU has found its way to investors in recent years? There is a very long tradition of real estate funds in Germany. After all, the first law that enabled the creation of domestic funds in 2006 is based on the German model. The situation in our country has changed in recent years. Today, real estate funds spit dramatically you not a few years ago.
By what criteria do you choose a commercial property to buy?There are many criteria. We consider the location and the fine mix to be the most important. We provide sustainability in the quality and quality of quality contracts. The financial structure of the transaction with the involvement of external financing is very important for us. We are really consistent at this point.
Is it also considering investing in residential real estate? We are not thinking about them at the moment. And for two reasons. Firstly, we do not have enough large residential projects to exchange for soft housing, and secondly, our inputs are commercial real estate, which cannot be achieved with residential real estate.
So it wouldn’t be quite in the field,What do you think of one of the future assumptions, namely a slight drop in apartment prices in the Czech Republic, agree with the darkness? The prices of short-term housing were affected by the measures of the Czech National Bank, which limits the availability of mortgages. On the other hand, construction prices have risen sharply in recent years, and of course the final price must adapt to this. For a long time I do not see a dramatic decline in apartment prices as reln.
How are the risks of investing in real estate funds?We as fund managers take the risk a little differently not the end investor. For him, the biggest risk is a drop in the price of the fund he owns. We have to work more comprehensively with risk. If I had to choose one, it would probably be a long-term vacancy.
Are you not worried that even at the moment of external economic problems, which many economists warn of today, not only will the prices of reality fall, but especially the occupancy of commercial real estate?Upmn eeno nemm. If a correction occurs, kn will occur. It is a natural phenomenon and none of us has done anything with it. In my experience, these are the first properties that will recover from similar situations very quickly, and over the years their price will go before the correction. Funds have the disadvantage that they have to constantly publish their current value. However, you realize the actual loss only when you sell the asset immediately after the decline. No one could reasonably do that unless he was forced to do so. Therefore, especially in bad times, it is extremely important to follow the strategy and not panic. The real estate today is a real fact of a large number of investment pensions. In order to decline, an alternative would have to be found for these pensions, and I do not see that today.
How do real estate investment funds stand at a time when nothing special is happening in the markets?In combination with cheap financing, we are able to find projects with an input of over 10 percent per invested capital. Long-term darkness with an input of between five and six percent ron.
If you should compare, in terms of return and risk, the classic catch fund, which invests, for example, in shares and bonds, with the real estate fund. How would real estate funds emerge from this comparison? Due to the material nature of the assets, I consider real estate funds to be roughly comparable to bonds in terms of risk. There are bags on it. Of course, they cannot compete with shares in good times, but the risk profile is not significant.
How are the fees of real estate mutual funds compared to classic mutual funds? Who has the cost? The management of a real estate fund is usually associated with labor, it is not possible to buy real estate from the computer. This corresponds to a slight fee structure. On the other hand, the returns are so interesting that real estate funds clearly pay off.
According to vs, how much are the fees according to the value of the investment? Some claim that they are not important, others on the contrary that they are evaluated in terms of tusk?Each investor should take a comprehensive amount of investment. He should be interested in what kind of return he will achieve within the investment horizon defined by him. However, the current market, however positive, thinks that the fees for real estate funds are set rationally and should not be a good investment.
The first argument of those who look to real estate in the future is to compare domestic real estate prices compared to exchange rates in Germany, Austria and other European countries. Do you think it is relevant to compare these prices? You are right that even in comparison with Germany or Austria, domestic realities are still cheaper, on the other hand, the neighboring Poland or Hungary are on the go. Therefore, it is possible for us to monitor the outflow of foreign investors to these regions. This outflow is a bag fully saturated by domestic investors.
You are fulfilling to expand abroad. Which country vs lkaj and pro? This year, and especially for five years, TRIGEA will face the Czech Republic. We want domestic real estate to form a fixed portfolio. The insights will, of course, depend on the size of the fund and how the commercial real estate abroad will be pineted. If I had to make a decision today, then the phenomenon first mentioned Poland or neighboring Slovakia.
Analysts expect a correction in the financial markets. Do you think that real estate prices will fall together? She talked about the correction for almost three years and didn’t drink it yet. I currently do not see any foundation that would confirm the assumption that real estate prices should fall. The market is a large petlak pension and lack of commercial real estate. Bank financing is extremely cheap and the appetite of the investor is enormous. These are all arguments that speak against a price correction. On the other hand, if the correction works, we will have to deal with it. Real estate is a long-term business and in the long run write interesting profits.