Century 21 owner: Real estate prices have nowhere to go

After two years of negotiations, the director of the financial consulting company 4fin Holding recently took over the Czech master franchise of Century 21. And he wants to build it into the market leader. He intends to connect the financial and real estate segments into one functional unit. “The market is starting to wake up. Merchants are starting to do well again. We expect that this year we will grow by perhaps thirty percent year-on-year,” says Tomáš Martinovský, CEO of 4fin holding, in an interview.

At the beginning of the year, you took over the Czech master franchise Century 21. How long did the negotiations with the investment company RSBC, which owned it, take?

The transfer itself took significantly longer than we imagined. Because acquiring a master franchise is very complicated in terms of permitting on the US side. The process eventually dragged on for almost two years. For a long time, we perceived a huge opportunity in the synergy of a real estate broker and a financial consultant. However, our real estate agency, which we founded in 2019, was rather small. We had something like 60 real estate agents and an annual turnover of roughly 50 million. But these days, you can’t do business when you’re small. In order for a company to develop, it needs some size. The Century 21 master franchise seemed like an ideal choice for us.

We manage 25 billion of client money

Abroad, Century 21 is one of the strongest. Why is this not the case in the Czech Republic?

Yes it’s right. However, it was the fact that its position on the Czech market did not correspond to its global position for a long time that we were able to obtain a master franchise. We consider the possibility of building the brand number one on the domestic market a great opportunity. And owning it for us also means a strategic advantage for growth in the financial segment. And conversely. The value is that we have built up not only a large stock of brokers, clients, but also the data associated with it. I see it as very important that we have acquired a huge professional team with many years of experience in the market.

Do you see real estate as an investment that makes more sense than financial products? Why did you enter the real estate market?

I think it’s more about portfolio diversification. There is simply no such thing as the best save. And if someone tells you that, I’d be wary. However, from the position of 4fin, we want to become the largest asset manager within five years. We currently have about 25 billion of client money under management. We believe that within five years it could be up to 100 billion. It is clear from the logic of the matter that we must have properties in our portfolio and we must learn to take care of them for clients. A large, stable brand that provides the best possible service for real estate management should help us to do this, be it sale or purchase.

We want to become the biggest management company

Will it remain with the administration or are you perhaps still thinking about development?

Within the 4fin holding, we already have a division that I wouldn’t call development, but it’s close to it. It is more about buying, renovating and returning the property back to the market. Because, of course, with such a large network of real estate brokers, you often come across interesting offers. However, we are at the beginning in this regard, with the fact that we see quite a lot of potential in the future.

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Jakub Střeštík, after a long career in management positions of companies with a turnover of billions of euros and thousands of employees, decided to change direction. He became a partner in Skyo Capital, which primarily deals in real estate shares. “This decision was a turning point in my life. Although I deal in real estate, I had to learn a lot, it was a new challenge,” says Střeštík in an interview for Newstream.

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What type of real estate is it?

Our typical project is, for example, a family house, which we divide into four housing units, renovate them and return them to circulation.

For the past two years, the real estate market experienced a sort of freeze. Do you expect this to change and your business to grow?

We actually did not experience a major freeze between 2021 and 2022, we had results similar to the previous years. Of course, I would like us to grow in the order of tens of percent, but if you look at the numbers from the market, they are good results. Despite the difficult situation, we managed to maintain the turnover we had the previous year. Currently, I am happy that the market is starting to wake up. Merchants are starting to do well again. We expect that this year we will grow by thirty percent year-on-year.

Czechs are returning to buying real estate

Will there be shopping?

Certainly. It is already being bought and the interest is, let’s say, double, sometimes even multiple. That is, in terms of the number of visits. Last year, no one even came to look at the properties. I don’t think it was because of the price, just that people didn’t feel the shopping sentiment.

How will property prices develop?

Well, I’m not a forged expert, but of course I’m watching it. I honestly don’t think prices should drop any further. Much depends on the region and the type of property. But I’m certainly not a fan of catastrophic scenarios. I expect that with falling interest rates and inflation, people’s desire to buy will return.

Tomas Martinovsky

He is the CEO of 4fin holding. He has been doing business in finance for more than 16 years. At the head of the 4fin holding company, he will manage not only a network of financial consultancy, but also real estate mediation and development of construction and renovation of apartments.

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Luděk Sekyra is one of the largest Czech developers. It is currently developing three large areas in the capital, in Smíchov, on Rohanský island and at the former freight station in Žižkov. In all three of these places, completely new urban districts are growing under his direction. In total, it is more than a million square meters of land that is completely changing its face.

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