• A city centre location in Prague’s hottest district, Prague 7, with prices predicted to increase by more than 20% in the next 12 months
• Average 10% below market value, according to an independent valuation
• Low entry price of £77,179 (total property cost) for an apartment in a city centre location
• Kitchens included in the price, saving on VAT. A higher VAT rate is normally applicable if a kitchen is installed following completion. (For more info on Czech VAT rates see page 8.)
• Payment terms of 15/85, with completion expected in 18 months (June 2009)

Spirit Wharf is located in Prague’s Holešovice District, one of the most promising areas in the Czech capital according to the Czech Business Weekly. The ongoing process of regeneration in the district has also had a dramatic effect on property prices with growth levels of approximately 20–25% a year currently outstripping nearly every other district in the city, including the historic centre.

While property prices across the capital are accelerating in a second phase of rapid price growth, this relatively small district on the banks of the Vltava River recorded 10% growth between January 2007 and May 2007 according to the latest available price growth data. This represents the fastest rate of growth in the capital this year, along with the neighbouring district of Karlin.

The recent increase in growth has come from a relatively low CZK47,095/sqm (£1,208) in May 2007, compared to neighbouring Karlin, a similarly located district near the city centre where the average price was CZK49,785/sqm (£1,277). These prices, however, were closer to the overall Prague average of CZK44,233/sqm (£1,134), so it is clear that this area remains undervalued, considering its location in the city centre. Since then, comparable developments to Spirit Wharf have been valued at between CZK60,000 (£1,538) and CZK73,745/sqm (£1,891). This provides evidence that the local market has taken off in this district in a classic ripple effect, which should bring further price increases into 2008.

An independent valuation has valued units at Spirit Wharf, at an average CZK60,000/sqm (£1,538). Property Secrets has negotiated an average price of CZK54,000/sqm (£1,385), which places the apartments at 10% below market value. Capital growth in the 18 months before completion, in June 2009, is estimated at 30–35%.

The development is just 2.5 kilometres from the old historic centre and one of the key business districts in Prague. Transport links, both in to and out of the city, are excellent, with a journey time to the centre taking less than 10 minutes via the nearby Metro station, less than one kilometre from the development.

The Old Brewery, a former Property Secrets’ deal in the same area of Holešovice has already achieved 26% growth from March to November 2007.

The Czech Republic is one of the best performing property markets in Europe, offering a combination of good capital growth and the most established rental market of all the new EU member states. The Czech Republic is one of eight countries which joined the EU in 2004. Since then, its mortgage market has become the most sophisticated of all new member states, with up to 90% LTV available to foreigners.

One of the key selling points of this Spirit Wharf deal is the inclusion of kitchens and bathrooms in the cost of the units. This saves on VAT costs as the usual rate for a kitchen, following completion, is 19%. The cost of the kitchen will be included at a lower VAT rate. The inclusion of a kitchen will also significantly reduce the time taken to prepare the unit, thereby potentially reducing void periods. The total property price for a studio apartment with kitchen is CZK3,010,000 (£77,179), with a 15% payment on exchange and 85% on completion in estimated 18 months (June 2009).

Read All Updates