The figures published today for the Czech Republic prove that the discount for Novy Medlanky was not genuine. Orco overly inflated the list price to make the deal look better. It just goes to prove you must do your due dilligence on the deals and not take the discounts at face value. I'm happy with the other properties I bought into with property secrets. But I always suspected that this one did not stack up as well. On this occassion property secrets got it wrong and the list price stated in the prospectus did not reflect the market value of the properties in this area of Brno in March 2005 (or in October 2006!). Thankfully this seems to be a one off. The other deals in the Czech Republic and Poland seem to all have good discounts. Shame I invested in this one and not one of the others!

Presumably Orco won't consider reducing the price to compensate us for this blunder?

I agree with Martin.....it has been 19 months since the deal was done and the figures show that there has been a growth of -12%(Deal vs. Market - without discount) and 1%(Deal vs. Market - with discount). If the discount was genuine, this means is that the demand in the Nove Medlanky development has dropped by 12% (which I doubt). The list price was not genuine either.....1% growth in demand in 19 months? Unless there were some other unforeseen events that occurred around the Novy Medlanky area that had an effect on the demand within the last 19 months, then it can only be presumed that Orco pulled a fast one and PS never saw it! Even if there was a increase in supply this doesn't warrant only a 1% increase. By the way, does anyone know what the schedule for completion for this set of apartments?

Or Finders Fee Refunded!!!!

Conor, I totally agree with your comments. My suspicion is the list price quoted in the prospectus was the expected list price for December 2006 (the original completion date). The development is now going to be ready in April next year I was told today. Maybe it will be worth the list price by then! Martin.

I suppose that was probably their strategy all along....the added value that is generally given to the buyer when buying off plan just isn't here in this deal. You might be able to understand this because Orco is seen as a reputable property developer (which means less risk on the buyer side) and this usually gaurantees the completion of the building phase on time. Taking this into account, it still doesn't justify the lack of added value. Also, in this case they have failed to keep to their schedule and it will be over two years between the commencement date and the completion date (April 2007). At the moment these figures makes PS look bad, but hopefully the fact that the apartments have not hit the secondary market yet means that these figures are not accurate. I would suggest that when PS has the chance to retrieve these figures, they post them as soon as they can! Or, if there are any similar developments in the area which may be valued now to mirror what Nove Medlankys value is, then that should be pursued also!

Here are two web sites:- www.reko.cz - Another company who have been building in Novy Medlanky. No lift in this development aparantly. www.ipbreal.cz - Orco's web site. The prices of the flats they are selling are lower than the valuation but aparantly they are lower down the hill and not as high quality. I hope this is the case! It would be interesting to hear your interpretations of the prices on these sites compared to our units.

A quick response... As this is a public forum we will not respond to questions about the legal status of the agreements between an individual client and PS on this or any other deal. Therefore, any questions of this nature should be raised directly with PS via our Client Services Team - or directly with the deal broker who sold him the unit. Richard is on holiday at the moment but will be back on the 30th of October. Our selected investments are not guaranteed to perform or perform evenly. We could offer guarantees - but that would be at a substantial cost. Equally, these deals were sold on the basis of medium and long term performance - the prospects for which are very still good. Lastly, as the project reaches its final stages we may well see further price rises - but that is not guarenteed. I will ask Richard to respond more directly to these concerns, but as he is on holiday at the moment I'm not sure when that will be.

Ben, We are not expecting the deals to have guaranteed performance. We are looking for three things. 1. Genuine Discount. 2. Easily rentable property / reasonable yield. 3. Medium to long term capital growth. I understand you cannot guarantee growth. But I would expect you to guarantee the discount. But with regards to Novy Medlanky what is done is done. It's too late now. I know in more recent deals you always have independant valuations which is an extra safety net. Hopefully we will get rentability and growth on Novy Medlanky and it will in the medium to long term be a good property. Martin.

Hi Martin I've had a quick chat with Richard (tracked him down!) and basically and he's told me the following: 1) The units that Orco are currently selling (ie, the Current Market Price) are not comparable to the units you bought through PS - they are at a much lower elevation and are not of the same standard. In fact, Orco are not yet marketing comparable units to those sourced by PS, so the figure we have used is perhaps a little misleading - but all we've got! You should see much better performance that will help prove the discount was genuine when we next review them. 2) As always, this is a medium to long term investment, where you should only really judge it after 7-10 years. 3) The Czech Republic is clearly not growing as fast as Poland currently is, it is a slow burner - but we're still very confident that the growth is both sustainable and worth the investment. Yes, including Medlanky! I hope this helps, Martin.