Real estate investments attractive for their stability and as a protection against inflation

Real estate is generally considered to be a stable and safe investment. An internal survey by Crowdberry shows it is a popular investment instrument, sought by more than 50% of its investors. Today, when a complex geopolitical situation is feeding double-digit inflation, the importance of real estate to investors has only grown. In addition, the market is expected to revalue due to these pressures, so for a number of investment opportunities this signifies the right moment before their value rises.

Crowdberry's investment platform allows private investors to co-own businesses and real estate. Since its inception, more than CZK 1 billion has been invested through the platform and the funds it has established. Roughly a quarter has gone into real estate and development projects, and these opportunities are now on the rise. Given the current market situation, the real estate segment is expected to attract more investors. However, real estate rarely offers returns above 10%, which are usually achieved only by developers and large institutional funds.

Yet Crowdberry has been changing the culture of investing in Slovakia for more than five years and in the last two years in the Czech Republic, allowing private investors to participate in the profits from the success of companies and development projects. In the case of new construction, it allows investment in land acquisitions or special purpose vehicles during the early stages even before the actual construction begins. "Investing in property development makes sense especially in the long term, where value is created over time and such investment acts as an interesting capital preservation. In addition, by entering the project early, the investor gets the opportunity to participate in the returns exceeding the usual rate," says Crowdberry Investment Manager Jan Rovný.

This is similar to the investments in KLM development projects in which Crowdberry investors have already participated. These include a retail park in Piešt'any, and logistic facilities in Nitra and Trnava.

The construction in Trnava is an example of a project where investors had the opportunity to enter the project at an early stage and share in the proceeds from the development of a fully leased facility with a 10-year contract. The facility has a significant position in the distribution network of the largest parcel delivery company Slovak Parcel Service, which, thanks to a fully automated processing line, can effectively meet the needs of the growing e-commerce market. Moreover, the investment came at an opportune moment when the growth of the e-commerce market accelerated during the Covid-19 pandemic. As a result, the value of the project has also increased since its completion and commissioning. "