Since the beginning of this decade, Czech Republic has shown notable growth in the real estate crowdfunding market. A couple of new platforms emerged in the country, including Occollo, Upvest, Ronda Invest, and most recently Investown, providing the opportunity to invest in properties with lower initial amounts. These platforms have earned space in the market due to providing an alternative type of investment, which frees the investor of the stress and responsibility of owning one or more properties while still allowing access to these assets.
Real estate crowdfunding provides you with more control over where your money is going, giving you transparency throughout the entire process. Traditionally partial investing in properties is conducted through property investment funds where your investments are distributed among a pool of different properties that are not from your selection. Property crowdfunding has become a highly attractive alternative to bonds or funds and is popular for investors who prefer direct management of their portfolios.
So, what is the status of real estate crowdfunding in the Czech Republic? We discussed with the CEO of Occollo, Maroš Breda, to learn more about alternative investments in the Czech Republic and what plans he has for his platform.
Maroš has spent more than 20 years working in real estate worldwide, including long-term experience in China and the US. He has developed expertise in research team management, strategy, business transformation, and operations during these years. Most recently he decided to take on a new venture with the ambition to innovate ways of financing real estate. Maroš founded Occollo in August 2018 to embark on a new journey.
What do you think about the state of real estate crowdfunding in the Czech Republic? Has this market changed during Occollo's existence?
Real estate crowdfunding in the Czech Republic is at the beginning. There are few platforms like Occollo in the market and we are making history about real estate crowdfunding in the Czech Republic. In our opinion, our market is finally moving forward inspired by the West. Thanks to inspiration abroad, we get new opportunities, and we think that is why real estate crowdfunding is so popular. We believe that real estate crowdfunding will be increasingly sought after in the Czech Republic in the next 2-3 years. Those who are already working on it will experience a great boom.
Crowdfunding into real estate is a very attractive alternative to bonds or funds that invest in real estate and it is a clear form where the investor can download the documents for the project in advance and evaluate them himself. The European Union is currently drafting a regulatory law for crowdfunding platforms, which should be discussed by our government at the end of November this year. Thanks to this regulation, the concepts should be unified and thus all inconsistencies should be clarified.
In your opinion, is Real Estate Crowdfunding already gaining wider awareness?
Nowadays, the concept of crowdfunding tends to reach the younger generation, which has long followed this concept on platforms such as Kickstarter, Fundlift, etc. Crowdfunding in real estate is something new, engaging, but we cannot say that it is in everyone's mind. We think it will certainly gain in mind as an alternative investment option. I believe that investing in real estate through crowdfunding might evolve towards a blockchain.
Thanks to the "token", you will be able to see transparently what happened to the property, who owned it or how the price developed. This option could also speed up the sale of real estate, which is unfortunately now very slow due to the outdated building authority.
Can you tell us a little bit about Occollo's history? How does a typical day in Occollo's office work for you?
Occollo originated from my idea. Before I lived in China, my first experience with real estate was from Australia. But in China for many years working on large projects such as department stores, office complexes I've experienced real development, besides dedicating time for my vineyard. After 10 years, I decided to move to the Czech Republic with my wife and used my long-term experience in marketing, real estate, retail, homebuilders, and crowdfunding to create Occollo in August 2018.
A current day in Occollo starts with coffee and emails. Our tasks vary during the day. Sometimes it is necessary to go to running projects or go for new projects which we would like to complete the acquisition. Other days I sit with the legal and financial team to deal with financing, audits, or project matters. Last but not least, I deal with property management and the investor base, where we focus on proper communication and service to a specific investor.
What type of investment opportunities does Occollo offer? How does the investment process work on your platform?
We offer investments in residential or commercial projects through a special-purpose loan. This means that the investor gives us money and then receives a quarterly return. After the investment horizon, we will pay their money back in full. We have no entry or exit fees.
It is very easy to start investing with Occollo. The first step to follow is to do the basic registration on the website. Once the user decides to become an investor then needs to provide additional documentation required by regulation and the Occollo platform must approve. The investment itself is easy after evaluating the project business plan and deciding on the investment amount the contract is electronically signed with SMS confirmation. The contract will be sent and you must confirm that you read it and like to sign via SMS. The signed contract is sent via email and is possible to download anytime in the personal dashboard. Dividends are payable on a quarterly basis.
How do you find new investment opportunities? How much money have you raised on your platform so far?
We have our analytical team in charge of the technical side, financial and accounting matters, and thanks to that we can select effectively. Specifically, in Prague, it is very difficult to find good deals but we receive between 200 and 250 projects per year. On average we only choose 1% of projects to proceed with and we develop one project per quarter.
In the past two years, Occollo has raised 42 million CZK and the average yield for investors is 6% p.a. For the year 2021, we are expecting to raise around 40 million CZK.
By choosing to invest with Occollo, what advantages does that give investors?
Our investor is usually a person who already has a portfolio and wants to invest more alternatively than usual. Their most frequent investment is around 100,000 CZK and investors invest in almost every project. The first advantage is transparency. We prepare extensive presentations, analyzes, and videos for each project to help the investor to decide. Another advantage is the quarterly report, in which the investor sees what is happening with the money he has lent us. It shows what we did in this quarter and what we plan to do next. Thirdly, we offer our investors the opportunity to see their potential investment with their own eyes. Often we organise open houses or when we were fundraising an investment for a hotel, the investors were able to visit with their family for an extended weekend!
When you are not engaged in developing Occollo - how do you recharge your batteries in your free time for the next working days?
I focus mainly on my family. I also really like sports, for example, I sometimes ride my bike to work. Last but not least I have developed a true passion for wine-making. Since the time I lived in China I have been devoted to my local vineyard Chateau Nine Peaks and I’m proud to say we’ve had some interesting results there!
Learn more about Occollo here.
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