Ostrava Property Investment

Ostrava is the third largest city in Czech Republic, and as such is growing at a very strong rate.

It has a population of around 315 000, and with the completion of the D-47 highway the infrastructure capacity will greatly increase as well as the ease of travel. Travel time to the Czech capital, Prague, will be shortened to a little over three hours.

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The Ostrava - Mosnov International Airport is located 25 km from the city centre. It is the biggest regional airport in the Czech Republic with a capacity of more than one million passengers per year (current actual figures are just over 200 000 per year and expected to triple next year) and a runway 3500m in length and 63m wide, allowing it to accommodate the world's largest airplanes. Currently it caters to both domestic and international flights.

The Ostrava property market is growing due to the availability of finance and the shortage of housing, but also down to the strong industrial production has always had a strong factor in the economy of the Ostrava region. Mainly its been based on the excavation and processing of coal and on related branches - metallurgy, the coking industry, the chemical industry, electric power generation, civil engineering and heavy engineering. Metallurgy and heavy engineering remain the largest employers in the City.

Mittal Steel Ostrava a.s. Metallurgical production, manufacture of metallurgical and engineering final products 10 968

Ostrava, in recent times, received an 'A3' grade from Moody's Investors Service.

What does this mean to you as a potential investor in the Ostrava property market? What does this rating actually mean?

There are 25 rankings from Moodys in the investor services, an 'A3' is seventh from the top and is defined as an upper-medium grade. A similar grading company, Standard and Poors, also gave Ostrava an 'A' ranking based on their grading system.

Some investors will only look at cities with 'A' ratings. It is an indicator of the financial and fiscal health of the community.

Since the restructuring of the industry in the 1990s, the economic platform of the city has changed substantially. In fact, most of its incomes are no longer dependant on local economic conditions.

One of the other large factors influencing the Ostrava property and rental market is the presence of the new Hyundai plant in No�ovice. We feel this offers an excellent potential for foreign executives whose wives want easy access to a major center but are still within a reasonable commute distance to work. There are lots of related businesses to this Hyundai plant now relocating to the Ostrava area. Our rental agent has seen a large number of enquiries from Hyundai Japanese employees looking for larger apartments.

Prices are very good - and rising by around 15% per annum - but have a long way to go - this is the time to invest here!

1. Proximity to the centre � it is 12 minutes to the center and within close access to the new highway being built through Ostrava. We feel this holds very good promise for capital appreciation.

2. Price - CZK/m2 � the prices offered are between 27 000 and 28 000 CZK/m2 (total prices between 1 600 000 CZK to 2 900 000 CZK before VAT) � by comparison a similar project- Atrim Slezka :: http://www.atrium-slezska.cz/o-projektu-popis-projektu.php (in terms of location) is selling for 34 000 to 38 000 CZK/m2.

3. Payment plan � just 5% down! This allows excellent return on investment, and is why many investors have shown interest in multiple units!

4. Rentability � having a spectrum across 1 bedrooms to 3 bedrooms will allow better rent ability � we feel gross rental yields will be the same as Brno � 6 to 7% - perhaps 8% by the time the project is finished (March 2008) � the project is also about 37 km or 30 minute drive from the new Hyundai plant in No�ovice. We feel this is an excellent potential for foreign executive whose wives want easy access to a major center (shopping!) but it is still within a reasonable commute distance to work. There are lots of related businesses to this Hyundai plant now relocating to the Ostrava area.

Ostrava property offers an excellent potential to buy into a property market very much on the up, which is expected to follow in the footsteps of Prague, and Brno which is probably a year or two ahead.

There is strong levels of industry, a shortage of housing, and the fantastic mortgage market that the Czech Republic offers!For many investors, either entering the Czech Republic market, or looking to expand their portfolios in Czech Republic, Ostrava property makes excellent sense!

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