Another world player has entered the Czech real estate market. The network of real estate agencies Sotheby’s International Realty has opened its new branch in the country.
At the moment, it is offering four Czech properties only, but they make it clear what is the company’s target group. The cheapest housing currently on offer is a three-room flat worth CZK 27 million in Prague’s Bubeneč. For more demanding customers there is a furnished 200 square metre luxury flat for CZK 110 million in Prague’s Jewish Town.
The Czech unit of Sotheby’s International Realty is operated by Czech Republic Realty based on a franchise license. But also Sotheby’s International Realty itself uses its name based on a franchise license provided by the well-known British auction house Sotheby’s.
“We have just launched our activities in the Czech Republic, but we are already offering flats in the Pankrác skyscraper City Epoque,” the company’s spokesman Zdeněk Jakl. It’s these flats in the planned 30-floor building from the developer ECM that should constitute a major part of the company’s offer. The project is to be completed by 2011.
The new real estate agency counts on luring clients by similar properties abroad. And it can offer many of them thanks to a number of foreign branches. Apart from flats and houses at prices exceeding CZK 100 million, customers can also buy a generous marble residence in New York for CZK 1.5 billion. It is hard to say, though, whether there is currently demand for such properties in the Czech Republic.
The new chain is actually not entering the Czech market at the perfect time. Sales of luxury properties dropped in year-on-year terms, and even established real estate agencies focused on rich clients are experiencing problems.
The network Sotheby’s International Realty is a unit of the US group Realogy Franchise Group, which posted a loss of more than USD 250 million (over CZK 5 billion) in the first quarter of this year. The loss came mainly because of a fall in sales and in prices of US properties. Even the USD 100 million from franchises on new markets and hefty cost cuts reaching USD 310 million did not avert it. If it was not for the expansion and savings, the loss would have exceeded USD 670 million, or more than CZK 13 billion.
Realogy also includes the network Century 21, another newcomer to the Czech market, which wants to be a competitor to the Remax chain.