Interview with Jan Křiváček, CEO of Homeland, published in the September issue of Estate magazine.
Interviewer: Karla Králová
On what principles do you base yourself in your Homeland company?
We strive to connect modern innovative technologies with the traditional conservative real estate business. We are well aware and understand that it is now more important than ever to adapt to technological progress that resonates throughout society. We want to offer our clients a combination of traditional real estate services in the highest quality of our standard and at the same time keep up with the times and bring an innovative approach to the market.
How do you currently see your position in the real estate market?
Today we offer the highest level of real estate services. We set the direction and create trends in the sale of premium real estate. In addition, we have set up internal tools, standards and processes that help us to be constantly better and move forward. The properties we currently offer are among the best on the market. By no means are we driven by quantity, but we care and are interested in quality, which is also relatively limited. Our focus is primarily on the sale of real estate, we currently pay maximum attention to it and care. We will always focus on providing the customer with an experience in addition to the service itself. We want the sale or purchase of real estate to be a pleasant and indisputable experience for each of our clients, which he will be happy to remember. And he will return to us with confidence.
Are you dealing with premium real estate, what specifics does working with this segment entail, either in the case of renting or selling?
There are always people behind every property, project and business. In the case of the premium segment, our customers, investors, or if you want partners, are more demanding. However, this complexity is not an obstacle for us, we ourselves are used to placing great demands on ourselves and we expect the best from ourselves, which is why we want to provide our customers with only premium above-standard services and service. We always and under all circumstances are expected to act professionally and act. In some cases, our customers are very specific, so a degree of diplomacy and discretion is needed.
Could you please describe your services in more detail and what do you offer?
We offer comprehensive real estate services, which include purchase, sale, lease, project management and, of course, legal and financial services. We offer each of our customers the same quality of services, it only depends on its individual scope. In the B2C segment, this is a standard business model. We go through strict tenders for developers and B2B customers and specify various services through various RFI or RFP documentation, which services and in which cooperation we will deliver exactly.
The list of your services also includes sales and marketing strategies. Marketing is a relatively exact field, but specifically in the real estate sector it carries with it many specifics, what do you think are the most important ones?
Marketing for smaller, narrowly focused companies like us is, to a certain extent, an art, the basis of success is knowing your customer and knowing exactly what and how you want to communicate. As I mentioned at the beginning, we are in a difficult time at a time of technological progress, and almost everyone has already gone through some form of digitization. My advice is: don't be afraid of innovation, creativity and change.
What does all the steps need to be done in order for the property to be brilliantly presented?
You'll find out when you contact us (laughs).
Why is home staging another important component in preparing a property for sale? Is this aspect of the client, the customer, absolutely essential or decisive in the final sale today?
Of course, it is important and has a role in real estate marketing, especially in the case of resale and secondhand market. Not everyone can imagine a particular property in its full beauty. With this instrument, we will supply real estate to attractiveness so that we can present it perfectly and maximize its market price.
How exactly can I imagine the overlap into the online world that you write about on your website?
Above all, the online world of real estate that we promote takes place on our domain, where you can intuitively view any real estate or development project from our portfolio from the comfort of your home. This includes a video-photo presentation, civic amenities around the site, floor plan and all other technical details. If you are interested, you can then book your preferred tour or consultation time.
Due to the pandemic, the environment for buying and selling real estate has changed significantly, what are the current trends in the digitization market?Due to the pandemic, digitization and the need to purchase new information systems accelerated. Promotion and the sale itself have become more transferred to the online environment and customers have become accustomed to responsive content, and especially in times of pandemic to the comfort of a video tour, for example from a mobile phone through their favorite application. Already today we are ready with the client the whole business process, or including the relevant contracts, process online remotely. It is not the most comfortable yet, but these processes will be further automated with the advent of new technologies such as artificial intelligence, virtual reality or the Internet of Things, and relevant legislation.
How do you think the client himself and his needs and demands have changed during the time you work in the field of real estate?
Our clients are demanding, and that is understandable. However, the location, layout, size, and recently especially the connection with the exterior, namely the balcony, terrace or garden, still play a crucial role. Today, however, clients place far more emphasis on the standards used and the quality of architectural or material processing or long-term evaluation of the investment. They are also interested in the benefits and services of buildings, such as reception, CCTV, garage parking with spacious and easily accessible cellars, but they can also be services such as concierge, wellness or fitness.
Respectively, what is the usual scenario in the case of future owners and in what usual life situations do they find themselves?
That's different. Sometimes an investor comes and diversifies his investments in several projects and real estate through us, other times the investor is a husband and wife, who solve the need arising from their current situation.
Do you often work with clients on a longer-term basis, or do one-off collaborations predominate?
We work with our clients mainly on the basis of long-term cooperation, which we maintain and constantly develop. Our clients usually have more properties in their portfolio and thanks to their satisfaction with our service and services, they turn to us repeatedly, and I am very pleased about that.
Do you remember the sale of a particularly interesting property that you realized?
I like to remember the sale of a beautiful villa in Central Bohemia, which was bought from us by a Czech living in Singapore. Even without a physical examination, only on the basis of the viral effect of our presentation and video, which appealed to him so much that he did not hesitate to contact us and everything turned out well.
How many of the real estate you sold are for net investments and how much for your own housing?
Investments in our country account for about 20 percent. People demand premium housing primarily for their own needs or for long-term appreciation, not primarily for rent.
In Prague, developers are starting to focus on the long-neglected rental segment, how do you view this trend in the field of development yourself?
We are definitely interested in this segment and we already have several premium rental housing projects in Vinohrady in our portfolio. Today, in terms of numbers and the share of rental housing, Prague accounts for about 30 percent, but in foreign metropolises west of us, we are already around 80 percent. Thus, this segment is certainly facing a significant boom and with the rising price of real estate for owner-occupied housing, a large part of those interested will not reach in the future. Furthermore, there is a generational change and working millennials, accustomed to a shared economy, now have a significantly lower need to own anything. In the premium segment, rental housing projects will be created offering hotel-type services, as is common today from us to the west, where, in addition, this segment is supported and subsidized by the state or local government. I expect the same here, so that developers are also more motivated.
Among other things, you are renting offices that, due to the pandemic, have ceased to be of interest due to the mass introduction of a home office. By how much has their value fallen and at what level is it now?
The value of the offices certainly did not fall. The current vacancy rate is slightly higher, but still relatively low and in single digits. At the beginning of the pandemic, the average price in Prague was around 15 to 20 euros per square meter, in the peripheral parts it fell below 15 euros. Paradoxically, this price was maintained, mainly due to the long-term lack of space and long-term leases. Rather, we can say that after years, prices have stopped rising due to the pandemic.
What are the current strategies of companies for further development? For example, are they moving to smaller premises, offering their current premises for further lease, or changing the location completely?
For the time being, most domestic companies remain in their places and streamline their current premises, their arrangement, to better suit the combination of work from home. But the boom was recorded by coworking spaces, which are much more flexible than traditional rentals. To think that you can only work in a home office is an illusion that most employees and employers already understand today. We cannot do without offices and mutual social contact.
Over the years, the equipment of offices and their layout have also changed. What is the interest in the field of office space today? How much is the current demand trend of open space in recent years?
People want to feel good in the office, ideally at home. Especially with the new generation of millennials came a trend where they no longer just want to take their so-called seats and go home, but their social life has been transferred to work. Open space is only part of the trend. Today, offices are expected to relax even in the form of chillout zones, terraces, modern spacious kitchens or social spaces. I think the main message is that we should not feel in our offices primarily as in work, which is a necessary evil, but vice versa.
Which parts of Prague are most in demand in commercial office real estate and why?
The traditional location is still the center, mostly the Old and New Town, where there are prestigious office spaces, which house banks, law firms and similar institutions. Within the wider center, especially the former industrial area: Karlín, Smíchov, Holešovice and the part from Vyšehrad to Pankrác. These locations have perfect civic amenities and still enough building space, thanks to the number of brownfields, for modern office construction.
How has the market in the premium residential real estate segment developed generally in recent years?
The premium real estate segment remains stable for a long time and their prices have been rising steadily for several years. The fact that there is a long-term shortage of housing units in the Czech Republic, and especially in Prague, and in the pace of their construction due to extreme bureaucracy we belong more to the European average, is generally known and this fact will not change from day to day. Premium real estate then has the specificity that, compared to ordinary flats, clients are more often viewed not only for the purpose of housing, but also as a long-term stable investment. This led to an even faster growth of their prices compared to the average in times of economic boom.
And how did the pandemic affect its development and what is the current situation in it?
During the pandemic, the market was affected by several factors, such as low interest rates and cheap mortgages, significant savings that their owners wanted to protect from the crisis with stable investment, and excess demand over supply. These aspects further intensified this trend. Like everyone else, we are registering strong demand from monetary and fiscal policy. There is a lot of money on the market, favorable mortgages and low interest rates motivate you to buy real estate. At the moment, we can see real estate prices going extremely high, and people are realizing that their price will be even higher in a year due to accelerating inflation and the construction crisis. Czechs perceive the purchase of real estate as a safe investment and protection of their savings, as well as an asset that they can influence, take care of and value. Secondly, however, due to fiscal policy, people do not have much need to get rid of premium and luxury real estate, and there is a shortage of them on the market.
What development do you expect for the next short and medium term?
Unfortunately, I cannot predict this with certainty, probably like no one, but in the short term we can expect the current rate of price growth, which is around 5 percent quarter on quarter, and a gradual slowdown in demand, which will gradually respond to rising interest rates. In the medium term, the current trend is likely to slow down. A number of factors can contribute to this, in addition to the increase in the price of mortgages, as well as legislation and planned adjustments to real estate taxes. However, premium property prices are likely to continue to rise.
- 06. 10. 2021
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