How Do We Select and Implement Projects
How the selection of the projects and its subsequent implementation takes place.
1. We actively search for potential investment opportunities and also receive project proposals from our partners.
2. The first step in assessing any project proposal or promising investment opportunity is quick analysis to determine whether it even makes sense to devote time and resources to detailed evaluation. If initial calculations show good results that meet our investment criteria, we conduct further analysis and detailed calculations.
3. Feasibility Study – includes analysis of market conditions & prices in the given locality, analysis of competition, zoning plan and territorial regulations such as land development, floor and green areas coefficients, availability of utilities, their capacity and connectivity options, related project costs, project financing options and an estimate of the duration of the permitting process and the whole project implementation. The outcome of this process is a comprehensive financial and business model of the project.
4. LUI Request – Land-use Planning Information (hereinafter ‘LUI’) informs us about the possibilities and limits of construction in the area.
5. Massing Study – Setting up the right business project concept is a key step in a development project. In this phase, we determine the main parameters of the buildings such as the number and size of apartments, the usability of indoor spaces, the number of communication cores, or the organization of parking. It is the appropriately chosen concept of the project that determines its feasibility and profitability.
6. Indicative Project Financing Offer – gives us information about the number of funds we can obtain from the bank which also determines our own funds needed to finance the project. Moreover, from the terms of the offer, we can infer how the bank evaluates the feasibility of our project.
7. Negotiations with the Seller – if the project is feasible and economically profitable, we begin the transaction process. The transaction begins with an indicative offer to the seller, often before the official start of the due diligence process. Usually, there are several rounds of negotiations focusing not only on the price but also on other important conditions of the transaction. The negotiation process also includes the preparation of contractual documentation.
8. Due Diligence – we conduct thorough legal, technical, and economic-financial due diligence for each project. We carefully analyse the land or real estate, engineering networks and their capacities, connection points, access roads, and transport connections, legal relations, and possible burdens on land.
9. Acquisition of Real Estate – signing of contractual documentation for the purchase of land or real estate, or the purchase of ownership shares in the project companies represents the official beginning of the project.
10. Architectural Tender – after the successful acquisition of land or real estate, an architectural tender is announced to obtain the best architectural design of the project. In this phase of the process, we define details of the strategic direction and determine the exact business concept of the project and its visual side.
11. Permit Process – includes several time-consuming steps such as obtaining a binding opinion of the municipality or city district, the process of environmental impact assessment (EIA), obtaining a zoning decision, building permit, and all other permits needed for construction.
12. Financing – after obtaining all the necessary permits for construction, we assess and determine the appropriate forms of financing for the project. In addition to our resources, we also usually use bank loans, which we can obtain in favourable conditions thanks to our wide portfolio of successfully completed projects.
13. Marketing – In the case of residential real estate projects, it is essential to set marketing mix, target clientele, advertisement form, project brand, and sales time schedule at the very beginning of the project. In the case of industrial real estate, the search for the tenant is an important part of the preparatory process for the project since tenants often have specific criteria for the premises that may affect parameters relevant for the permit process.
14. Sale – sale of real estate or signing a lease contract with tenants is a key element of successful completion of each project so it is necessary to think about it before the actual acquisition of land or real estate. One of the most important parameters is the location of the project itself, which we always carefully consider. Another important factor is the optimal pricing policy and marketing of the project to a selected target clientele.
15. Construction – we carry out the construction works on projects either through the general contractor or by subcontracting to individual construction and operating units. Both approaches have their advantages, so for each project, we carefully consider the appropriate form of construction.
16. Final Building Approval – obtaining final building approval from authorities is one of the most important milestones for the project. In the case of residential real estate, obtaining final payments from buyers is contingent upon reaching this milestone.
17. Handover – after the successful approval of the building, premises are handed over to new owners or tenants. This is a joyful milestone especially for new owners of flats in residential real estate projects that receive keys from their new flats and can already furnish and decorate their apartments.
18. Exit – this is the final step in the project. In the case of residential real estate projects, it includes repayment of bank loans and realizing the return on investment. In the case of industrial real estate, a successful exit involves the sale of property or project company. This is a demanding and time-consuming process, but also very satisfactory after the final signing of all contracts. Subsequently, a bank loan is repaid, and return on investment is realized.
We have prepared a yearly report for 2019, in which you'll find a lot of interesting information about the world of finance and investment.