House-Builder Specializing in Starter Homes For Sale

Business description

Established in 2003, this family business, formed following the ease with which the current Owner of the business built his own house in the Czech Republic, offers an immediate stepping stone in to the Central European house building market.
Based in the Czech Republic, and combining excellent Czech and British management skills, this business has identified a clear need within the domestic marketplace for starter homes. With the central European economies growing at an excellent rate generating strong rates of employment, the fairly recent availability of mortgages combined with socio demographic changes driving residents to look for better quality accommodation than is afforded by the traditional, bleak Eastern European designed tower block projects the property market in the Czech Republic is booming as more and more people want to live in their own house with a garden. Recent surveys suggest new mortgage loans are increasing by 50% year on year as more and more people buy their own homes, fuelling an increase in property prices thought to be in the region of 30 – 40% per annum.

Having identified suburbia as not yet being a phenomenon in the Czech Republic, this business is already successfully marketing off plan, an initial 17 house linked starter homes project in an ideal location approximately 1 kilometre north of the land registry border of the City of Prague. Situated in the centre of a village, next to a lake and various leisure facilities, the development, which was originally designated as gardens in the official Municipal Plan is expected to receive full planning permission in October 2006. The services including gas, electricity, mains water and drainage and telephone are currently in process of being brought to the site. The average retail price is Czk 3.75m plus VAT (currently 5%) which equates to approximately £100,000 with sales currently outsourced to a local estate agency.

Buoyed by the undoubted success of this project the Owners of this business are keen to take full advantage of the excellent property development opportunities there are within the Czech Republic and other central European countries are now seeking significant partner investment. The underlying Business Plan is a very simple one – to build houses to meet the requirements of the largest sector of consumers in the Central European real estate market and to sell them.

This business offers an excellent blend of experience and expertise in project management and perhaps more importantly the management of very successful construction and real estate investment projects throughout Central Europe – together with an unrivalled knowledge of the local marketplace and the ability to identify the most appropriate sites for development. This is therefore a rare opportunity to invest in a housing construction business already established in the domestic market of the Czech Republic and a fast track entry in to one of Europe’s most rapidly growing housing markets.
Employees:
The business currently has three members of a Senior Management team with all other functions currently outsourced.
Chief Executive Officer:
Time served university educated freelance IT consultant with experience of project managing and consulting for large scale SAP implementation projects reporting to senior management in blue chip clients, implemented and project managed implementations of SAP components as a freelance consultant for Nestle (Germany), Johnson and Johnson (Belgium), Bombardier (Germany), Accenture (Germany), Nokia (Finland), Bank Austria Group (Austria) and LogicaCMG (Czech Republic).

Operations Director:

Time served university educated Civil Engineering Consultant with a proven and demonstrable background representing and reporting to large foreign investors in the due diligence and management of construction and real estate investment projects in Central Europe.

Recent projects have included Charles Square office complex (Prague), Prague Gate
office complex, Retail Mall, Office Complexes, Hotels projects in Slovakia and Latvia answering to investors in Western Europe and the USA.

Non-Executive Director:

Time served university educated Civil Engineer, former General Manager of 7000+ people civil engineering, construction and mineral extraction group in Central Europe. More recently operated as an independent civil engineering and construction consultant, working on a tunnelling project financed by the EU and awarded Czech Construction Project of the Year in 2005.

Other information

Expansion potential:

This business offers an investor a fast track stepping stone into the Central European house building market and access to immediate profits via its initial 17 house starter homes project which is already being marketed off plan.
Additional investment would accelerate the growth plans of this business enabling it to build up a land bank immediately and in turn developing into what could become Central Europe’s largest starter homes style builder. Additional opportunities have already been identified in Plzen, Brno and Ostrava in the Czech Republic, Bratislava in Slovakia, Warsaw in Poland and Budapest in Hungary.
By concentrating on converting land not originally designated for housing construction, land values can increase as a general minimum by a factor of two in the local marketplace, an appreciation in value notwithstanding that currently being seen as a result of the growing demand for building land generally. Greater levels of construction activity will generate economies of scale in building and enable services which are currently outsourced – sales and marketing for example, to be brought in – house with a further consequent impact on turnover and profitability.
Additional opportunities include the possibilities of selling Mortgages and Real Estate Finance, a Real Estate Agency side of the business and the possibility of tapping into the growing demand from property investors outside the area hungry for property investments in Central Europe – the UK overseas ‘buy to let’ market for example.

Reasons for selling:

Although the business is on target to enjoy a successful future through organic growth, the Owners believe that the financial and supporting backing of a larger partner can accelerate this growth and enable this business to take full advantage of the unique opportunities to achieve a dominant position that will only exist for a short period of time in the Central European property market.

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