Passive ownership of real estate is not enough. The key lies in active decision-making and accurate reporting.
The real estate market is being put to the test. Mária Janušková, Partner at TPA, a trusted advisor to major real estate projects for over 30 years, explains why simply buying and holding property is no longer enough—and why precise reporting, a well-structured tax framework, and the ability to anticipate legislative changes have become critical success factors in today’s market.
Is real estate today shifting from a stable investment to a riskier discipline?
Real estate is no longer automatically a “safe and stable haven.” We are seeing pressure from interest rates, greater valuation volatility, rising operating costs, stricter regulation, and increased scrutiny of impairment testing. Investors are conducting much more thorough due diligence on tenant quality and the long-term sustainability of cash flows. The investment remains attractive, but it requires active risk management rather than passive ownership.
What are CFOs and CEOs dealing with differently today compared to a few years ago?
Instead of relying on a single forecast, they are now working with multiple scenarios for interest rates, costs, and occupancy levels. While growth was the dominant priority in the past, today the focus is on stability and resilience. In transactions, the focus is no longer solely on the acquisition itself, but on its long-term sustainability.
Which factors have the greatest impact on investment decisions today?
Interest rates, access to financing, and the regulatory environment are among the most influential factors. From an accounting perspective, the valuation methodology applied to assets is crucial, as it directly affects both the balance sheet and future financial statements. Tax considerations are equally important—particularly the depreciation structure, the VAT regime, and the choice between an asset deal and a share deal, all of which can significantly affect the overall return on an investment. Last but not least, a key consideration is whether the company has the capacity to manage the property efficiently and sustainably over the long term.
Is the market becoming more defensive, or is the appetite for risk returning?
The market is more cautious today. In the past, investors were more willing to pursue rapid growth and take on higher levels of risk. Today, however, the focus has shifted toward stable returns, high-quality tenants, and long-term sustainability. Risk is not avoided—it is managed. The appetite for risk is returning, but only selectively—primarily in segments with strong underlying demand, such as logistics.
Where do companies make the biggest mistakes in real estate transactions?
Real estate transactions are among the most complex business operations, and underestimating their complexity often leads to unnecessary risks and higher costs. In practice, several common mistakes tend to recur. One of the most common mistakes is an unclear transaction structure. From the outset, investors should have a clear understanding of whether they are acquiring the property itself or the company that owns it.
Another common issue is insufficient due diligence. A superficial review of legal, tax, accounting, or technical aspects can result in unexpected liabilities, additional capital expenditures, or restrictions on the future use of the asset.
Proper tax structuring also plays a crucial role. Incorrectly assessing VAT implications, tax exemptions, or transfer pricing requirements can result in financial consequences that persist long after the transaction has been completed.
Companies also tend to underestimate the importance of contractual protection. Missing warranties, unclear handover conditions, or inadequate treatment of tax implications can significantly increase risk—particularly for the buyer.
Finally, investors sometimes fail to account for future regulatory developments. Increasingly stringent environmental requirements may lead to higher operating or refurbishment costs in the future.
How do taxes influence investment decisions?
Investors primarily focus on the macroeconomic environment. However, tax considerations play a significant role in structuring a transaction and, in some cases, can have a decisive impact on investment returns or the final sale price.
Which legislative changes have the greatest impact on the real estate sector?
These include the new Building Act and changes to permitting procedures, the proposed amendment to the Civil Code affecting ownership and lease relationships, as well as increasingly stringent EU legislation on the energy performance of buildings. Government consolidation measures also have a significant impact, particularly the higher VAT rate, the introduction of a financial transaction tax, and new fees affecting the construction sector.
Where do the biggest challenges arise in accounting and reporting?
Most commonly, issues arise from the incorrect classification of properties, asset valuation, and the timing of revenue recognition. There is often a lack of alignment between the legal, technical, tax, and accounting perspectives. The result is inconsistent reporting, which undermines the confidence of both investors and management.
Is the quality of data and reporting a competitive advantage?
Yes. It enables faster and more accurate decision-making. A CFO needs to be able to respond almost in real time. Banks are also scrutinizing the quality of reporting far more rigorously than in the past. Companies with well-structured processes gain a clear advantage in negotiations with investors.
What happens when a company approaches real estate from only one perspective?
Blind spots emerge. A comprehensive view is missing, which can lead to poor decision-making. Real estate is a combination of cash flow, regulation, market dynamics, and people. If any one of these elements is overlooked, a project may be sound on paper yet economically unsustainable.
