Real Estate

The real estate sector in the Czech Republic is experiencing significant challenges as the effects of the global credit crisis continue to make themselves felt. The cost of finance is higher, and the availability is more challenging. There is evidence of yield decompression and decline in reported market values.

These trends have led many developers to significantly revise their strategies with the accent now being on suspending new development projects, finalising active projects, sourcing new funding options, managing operational assets and looking for opportunities to rationalise their operating structures and cut general and administrative expenditures.

Whilst transactions are still taking place the volumes have significantly declined. There is cautious optimism that this may slightly improve in 2010.

PwC has a dedicated network of tax, legal, corporate finance and assurance specialists combining global knowledge with local experience who can help investment managers and real estate companies turn challenges into opportunities in key areas including governance, risk management, financial reporting, cost cutting and operational effectiveness, raising capital and business development strategies.

Industry specific services

• Advice on tax beneficial holding company locations, financial structures, repatriation and exit strategies;
• Local tax structuring – sale and lease back transactions, lease incentives, rental contracts, financing and refinancing;
• Structuring advice for VAT exempt real estate investors, rental contract structuring in order to avoid post-acquisition repayments of recovered input VAT;
• Real estate transfer tax advice – structuring possibilities to manage the transfer tax liability;
• Due diligence review of target company acquired for the purpose of purchasing real estate;
• Due diligence prior to purchase of real estate property;
• Advice on fund structuring and establishment;
• Audit of financial statements prepared under Czech GAAP or various other GAAPS;
• Net operating income audits of operating assets to be acquired;
• Service charge audits, audits of turnover declarations;
• Real estate strategy;
• Financial modelling and finance raising;
• Corporate valuations.