In Prague there’s only a handful of well-established, professional real estate agencies that focus on an international clientele.

One is Hanex Group, which entered the market 10 years ago and is set to expand this year. Owned by Frank Hanečák, a returned Czech-Canadian expatriate, the company is planning this year to expand into Slovakia and start selling properties as investment opportunities in Southern Europe, including Spain. It’s also negotiating with undisclosed investors to take part in the development of residential projects in or around the capital.

Hanečák claims that with EU entry and the current boom in apartment development, the local market offers even more opportunities for real estate agencies than it did in the mid-’90s. Developers such as Orco Property Group and Unistav are now asking Hanex Group to find buyers for their increasing supply of new flats.

Hanečák said that new apartments no longer sell “off the plans,” or immediately after the design is complete, as they previously did. “Now, if 80 percent of an apartment project is pre-sold five months before getting the final building approval, it’s a great success,” he said, adding that increased business for established real estate agencies will come as soon as big developers like Central Group and Skanska start using agencies to sell newly built flats.


Targeting the luxury customer

Hanex’s first steps this year to improve its services include adding German- and Spanish-language versions to its Web sites, which are already in Czech and English, and changing the domain from .cz to .eu. Some 55 percent of Hanex’s clients are foreigners, mainly Irish, Israeli, English, and North American.
Hanex started cooperating with developers in 1999 and now offers flats in around 5 development projects each year. About 80 percent of Hanex Group’s activities are sales of luxury flats and villas in and around Prague. The company, which usually charges commissions between 2 and 5 percent, also offers residential leases no lower than Kč 15,000 (€ 525) per month, arranges office leases and acts as a property consultant. Hanex typically offers flats worth between Kč 3 million–8 million and family houses between Kč 7 million–20 million. Properties offered by Hanex include Orco’s Dubový Mlýn luxury villas, apartment building Kavalírka in Prague 5, and Associated Construction Group’s City Seven residential project in Prague 6 – Břevnov. One of the largest current deals is the sale of a Kč 100 million luxury villa on Holečkova street, Prague 5. Hanex sells or leases between 600 and 1,000 properties per year.


Lawsuits to come

Hanečák boasts that professionalism is the company’s main asset; he says that only about a half of the several thousand real estate agencies on the market treat their clients professionally. He also calls for stricter regulations, and claims that here, unlike in North America, “virtually anybody can run a real estate agency” without a license or training. Another flaw Hanečák sees is that real estate agencies aren’t obliged to have liability insurance. He said the lack of regulations means that many agencies offer shoddy services. For example, several agencies might offer the same property but advertise different features and sizes; a client who buys the property and finds that it’s different than advertised may not be able to do anything about it.

Hanečák said poor service is still tolerated, but he anticipates that the unregulated situation will lead to a wave of lawsuits in the next few years, “when courts become more flexible and clients learn that they can demand professional services and sue agencies.”

Hanečák himself holds a brokerage license that he earned in Canada, and has participated in several courses on the property market including those organized by the Toronto Real Estate Board (TREB). Hanex is a member of the Association of Real Estate Offices (ARK ČR) and as a member must have liability insurance.


Learning at Re/Max

Following EU accession, the arrival of international real estate agencies like Re/Max in the Czech Republic means new competition for those serving an international clientele. Hanečák isn’t concerned that the U.S. franchise could affect his business, and says it will take several years for the brand to establish itself here. He already knows the competition intimately; Hanečák worked for Re/Max in Toronto for 11 years as an associate broker and later as vice president. Six years ago, Re/Max asked him to launch the franchise here, but he declined. “At that time the concept was too sophisticated for the Czech market, which wasn’t ready for it.”

Hanečák, who left then-Czechoslovakia in 1967, returned from Canada in 1995, when consultant European Privatization & Investment Corporation (EPIC) offered him a job in Prague as a consultant and real estate manager. After he launched EPIC’s new department for marketing and evaluation of assets, he decided to set up his own business. “I saw a gap on the market as there weren’t many professional real estate agencies focusing on international clients,” he said. Starting with a team of three in 1996, Hanex Group increased its sales every year by 40 percent and now has a staff of 11. This year, Hanečák plans to enlarge his team by three, take on a business partner and possibly change the limited liability company into a joint stock company.
http://www.cbw.cz/phprs/2006013010.html