Interview with Brent Watkins - Svoboda Williams Investment Management

Prague “is not a financial center.” But there is “a juicy bit of revenue” in the center of the city

The Canadian Brent Watkins established Svoboda Williams Investment Management (SWIM) with Prokop Svoboda, the co-owner of the SVOBODA & WILLIAMS real estate agency, at the beginning of this year with an eye toward helping a particular group of people. These people belong to an emergent investor class here in the Czech Republic, have considerable money, and are looking to invest in the valuable “hard asset” of real estate. Watkins says his ideal client is someone who is “not trying to double [their] money,” as do those he calls profiteers and speculators, but someone who understands the benefits of a long-term investment with low (but sustainable) yield.

Watkins speaks quickly and passionately about the industry in which he’s built his career. Born in Vancouver in an area he facetiously describes as boasting “two long buildings and a horse,” he came to the Czech Republic in 2000 to work for Colliers International before spending a few years at Deloitte. His decision to pair with Svoboda for his new investment advisory business, which is a division of the real-estate company Svoboda founded with Marion Williams in 1993, was informed by his belief that they “fit together well.” Watkins doesn’t speak Czech and needed the help of a native, while Svoboda benefitted from his partner’s decades of experience.

Watkins believes their timing couldn’t be better. To illustrate the development of the real estate investment market and the new breed of domestic investors, he points to the fall of Communism, the Czech Republic’s acceptance into the European Union, and “the stability of this economy [amid] the instability of Europe,” as factors that have bolstered a banking sector that is now so strong that Watkins is moved to call Prague “probably the best market” in Eastern Europe. Not to mention, he says, the city’s real-estate market is friendly to both the East and the West as that oft-cited gateway between the two regions.

Given recent events in CIS, Greece and elsewhere in Europe, Watkins believes another financial crisis is imminent, but that “there’s no reason to think the Czech economy will collapse.” However, prudent investors should take care of their assets and consider long-term sustainability of ‘real assets’.

He cites the financial crisis of seven years ago. People all over the world suffered its effects, and yet they “were still coming to Prague. Everywhere speculators with borrowed funds were affected dramatically, but true investors with good assets were spared.”

“The historical center of Prague has been the focus of tourist's interest for 1,000 years,” he explains. “Nothing is going to change those buildings’ attractiveness to tourists, to retailers. [Their] profit might be lower short-term” than the profit enjoyed by other spaces, “but they will attract huge footfall forever.”

Watkins does admit that Prague “is not a financial center.” But there is “a juicy bit of revenue” in the center of the city. The aforementioned architecture charms not only foreign tourists, but also Watkins’ clients, and even Watkins himself.

The real-estate investment advisor is particularly excited about SWIM’s upcoming Renaissance Collection. He and his team have been charged with advising on the sale of several historic buildings located in the city center on streets with such familiar names as Vinohradska and Dlouha. The word “renaissance” as Watkins uses it has nothing to do with the medieval period of artistic revival, but rather refers to the modern rejuvenation of these structures.

“What is the best use of this building in 2015?” Watkins asks of the Renaissance Collection. A hotel, a store, a museum? “These beautiful, historic buildings are just under-utilized.” Many are currently being used for purposes seemingly at odds with the aesthetic grandeur of their designs. Watkins says he likes to speculate on the feelings of whichever long-deceased aristocrat first requisitioned them. These men surely “didn’t imagine” their buildings would ever be used to house, say, a tacky crystal or sex shop, and would likely be appalled at such developments.

Having studied urban planning and economics, Watkins likes the idea of using these buildings as art galleries or other “social spaces that fit the contemporary society and its consumers and residents.”

“Prague is a city of culture. So more places should be created to house those things.”

That is why he is “seeking those type of investors who are not doing things solely for commercial reasons.” He enjoys working with private clients, and “self-made people” in particular. “They’re honest and they’re real,” he says.

His clientele is roughly half Czech and half foreign. Among the former, Watkins has been fortunate to have worked with many restituents, or people who were wealthy before the rise of Communism, who lost much of their property during the regime, and whose wealth is now being restituted. He also has private clients that have been very fortunate in the past two decades as professionals in good industries and have amassed substantial family wealth.

Their concerns are mostly “about preservation and slow-growth,” he says. This attitude appeals to Watkins as someone who champions conservative deals.

As a practical matter, both restituents and self-made individuals and families “make good clients for us” precisely because their interests often align so closely with Watkins’ own concerns. They prioritize long-term plans and low yields of perhaps only 3 – 7 percent.

More importantly, they make for successful business relationships because they are the people Watkins is the most motivated to help. He likes “people who are fascinating to me… Wow, your grandparents left the country? Your parents were penniless? How did you make your money?”

“I look forward to meeting people and hearing their stories,” he says. “I get into the human side” and in this way he looks forward to long-term client relationships.

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