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Real estate fund is a special fund under the Collective Investment Act that aggregates financial means from the public/stakeholders and in accordance with its investment strategy it invests these means into quality real estate directly or through real estate companies.
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ČS nemovitostní fond has the daily liquidity however, one has to bear in mind that the investment involved is a long-term investment and therefore the investors should carefully consider when to redeem their financial means and subsequently choose a suitable instrument.
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The aim of the real estate fund is to valorise the financial means deposited by the unitholders in a conservative manner, whereas the income from the operation of quality real estate forms the core of the mutual fund yields. Such real estate is acquired indirectly or by acquiring stake in a real estate company, and together they form the portfolio of real estate fund.
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A real estate company is a limited liability company or a joint stock company or a similar legal entity under foreign law, with the main line of business comprising predominantly the real estate acquisition, operation of real estate and transfer of the ownership right to real estate in consideration.
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Investors have the opportunity to share the benefits ensuing from ownership of the high-quality real estate, without personal responsibility for obligations resulting from activity of the fund/operation of the real estate.
The real estate funds participate in different segments of the real estate market (in particular office buildings, shopping malls and logistic complexes), with different life-cycle of development and hence with the possibility to further optimise the total income through the correct investment strategy.
In combination with the increase in the real estate value the funds can generate attractive yields, especially in the long-term horizon. Suitable for investors who are not interested in owning a real estate or who cannot directly own it.
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The fund does not stipulate any mandatory period during which the investor has to remain in the fund. Nevertheless, this is a long-term investment for conservative to balanced investors, with the minimum recommended investment horizon of 5 years. The fund is totally unsuitable for short-term speculations.
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Current upfront fee: 1.50%
Exit fee: 0 %For complete information, please refer to the Price List of Česká spořitelna – Services relating to securities trading.
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The units of the fund can be currently purchased in the branch network of Česká spořitelna, using the GEORGE internet banking and from the selected external distributors.
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The rate of the fund or the NAV – the Net Asset Value (equity per one unit) – is established by subtracting all liabilities from the sum of the market value of all the owned real estate units or real estate companies. If we divide this difference by the number of fund units, the result is the net asset value per one certificate.
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The key mechanism for determining the purchase price is primarily based on comparing the parameters of similar transactions at a given time and location. At least two expert appraisals are needed when purchasing real estate and the purchase price shall not differentiate from the price indicated in these expert opinions by more than 10%.
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Under the law the real estate price is updated at least twice per year, however the revaluation that is performed several times a year is no exception.
Price of the real estate in the portfolio must reflect the fair market value of the real
estate.
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The revaluation process is quite demanding and complex and it is very strictly regulated. In simplified terms, we get an independent expert appraisal elaborated; based on this appraisal the Expert Committee of at least three appraisers (independent of REICO ČS) will determine the real estate value. Process for determining the real estate value is subject to the fund depository supervision.
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Independence of the Expert Committee is stipulated by the Collective Investment Act. This act also clearly implies the liability of each member of the Expert Committee towards the unitholders of the fund for the damage caused by the infringement of their duties. The fund depository bears the same liability.
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The fund is fully a reinvestment fund. It means that all the yields generated by the fund are re-invested and thus not paid out as dividend. Hence the investor makes the profits from the difference between the purchase and selling price of the participation certificate. However, one has to bear in mind that the previous performance of the fund does not guarantee the same performance in the future. Value of the investment as well as income from the investment may increase as well as decrease, and the full return on the originally invested amount is not ensured. Investment into mutual funds is not insured by the Investor Compensation Fund.
