One of the possible solutions for financing development projects is to establish your own investment fund. In the last year, a traditional tool to raise money for business has become a phenomenon, reports E15.cz.
Not a month goes by without a new fund entering the Czech market. An avalanche of new investment opportunities can be an attractive way to evaluate savings, but some of the newcomers can mask their problems under the banner of a fund.
At the end of September, the developer Crestyl, a week earlier JRD or Panattoni and at the very end of the holidays, Reico. Arithmetically speaking, every week, that's almost one newly launched real estate fund. Thus, a trend that had been dramatically strengthening throughout the past year culminated vividly. According to statistics from the Czech National Bank, twenty-five new real estate funds were created in the Czech Republic during the twelve months ending halfway through the holidays.
The current total of 170 funds means a fourteen per cent jump in just one year. Funds, as a welcome source of capital, are far from new on the market, but recently they have experienced a substantial boom. At the same time, the trend coincides with the demand made up of the mass of investors looking for new ways to appreciate money in an environment of falling interest rates.
"In the case of developers, project financing is always key for them, and an investment fund is one of the possibilities to secure it," commented Jozef Murza, Head of Real Estate Department at Amundi Czech Republic. "There is a lot of capital on the market, which is increasingly difficult to evaluate at a reasonable level of risk. Real estate funds are seen as a relatively attractive option within alternative investments, and that is why the demand is high, which naturally leads to the establishment of new funds," added Murza.
