Slovakia Investment Property

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Slovakia Investment Property Newsletter
July 2005 - Issue # 10
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With the tourist season well underway and temperatures
reaching 40 Celsius, Bratislava is experiencing a new boom
of foreign visitors. A short walk through the historic Old
Town will reveal the ever increasing popularity the Slovak
capital is enjoying with visitors from Europe, US and the
Far East.

Despite Slovakia being known for its natural beauty as well
as historic heritage, traditionally there has been three
main attractions for foreign visitors - the capital Bratislava,
the skiing resorts of High and Low Tatras, and the country's
famous healing spas. And it is the spa tourism we will look
at today. Enjoy!

In this issue you will find:

1. Bratislava Tops EU 15 Average
2. For Healing Or Wellness, Head To Slovakia
3. Exceptional Old Town Apartments - Last Available!
4. Your Questions Answered (VAT)
5. Win a Bottle of 'Tokaj'! (Prize Draw)
6. Tell Us What You Think!

===================== FEATURE EDITORIAL =================

1) Bratislava Tops EU 15 Average

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Bratislava's living standards have now exceeded the EU 15
average. The GDP per capita in Bratislava stands at 110%
of the GDP (per capita) of the EU 15.

While Bratislava's economic success has been exceptional,
the gap between the capital and Slovakia's other regions
(most of them under 50% of the EU 15 average) is increasing.

* * *

While many Slovak regions have been receiving investments
involving large production facilities and industrial parks,
benefiting from the technically skilled and low cost labour,
Slovakia's capital has always attracted a different kind of
investment. More sophisticated, human capital oriented, and
intelligent from a future perspective.

Siemens Business Services and Alcatel were the pioneers who,
in the last decade, opened IT and software labs in Bratislava,
employing hundreds of programmers. However, it's been only
over the last few years that Bratislava started attracting
significant numbers of IT and research-oriented investments.

Slovakia, and Central Europe in general, offer important
advantages compared to another popular outsourcing
destination, Asia. High standards of general education,
good language skills, and cultural (as well as geographical)
proximity to Western Europe.

IBM and Dell are among the companies with largest service
and business process outsourcing (BPO) centres in Bratislava.
IBM is considering transferring another 700 positions from
its German centre to join the hundreds already working in
Bratislava. Dell's Bratislava centres employ over 700.

HP has opened its second customer service centre for Europe,
Middle East and Africa, with a staff of 300, to be extended
to 500 next year.

Accenture, with a staff of over 800 in Slovakia (half of
which are IT workers) has opened a new European BPO centre
in Bratislava last month. The centre, with currently 400
highly qualified employees (most of them accountants)
provides accounting and finance outsourcing services for
its business clients on three continents.

The sophisticated capital and investment brought by Accenture,
Dell, and others has further benefited Bratislava's workforce.
IT professionals, along with financial and telecoms sector
already among the highest paid, have seen their wages
increase by 14% over the last year.

More importantly, they are the foundation for Slovakia's
future development as a knowledge-based economy.

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2) For Healing Or Wellness, Head To Slovakia!

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Few countries are as rich in mineral waters as Slovakia
with its over 1200 springs (the warmest with a temperature
of 92 Celsius).

The Slovak territory has been renowned for the healing
benefits of its mineral and thermal waters for over
thousand years. In its modern history, spa towns such as
Piestany have been attracting visitors from all over
Europe and the Middle East.

However, over the last decades Slovak spas have seen most
of their revenues come from the Social insurance. With
over 2/3 of customers being Slovaks who had their treatment
(mostly for serious illnesses or recovery after surgeries)
paid by the Social health insurance, the spas weren't
concerned about investing into marketing, higher quality
rooms and food, or better service.

A severe awakening came in 2004, after changes in the
Social insurance. The numbers of patients dropped, in some
cases by 50%, and many spas have been fighting survival.

The times when all that mattered to visitors were healing
benefits of the waters and quality of the therapeutic
procedures are gone. Today, guests expect higher standard
accomodation, social life and events, and additional services.

Most Slovak spas have now realized the need to attract
self-paying guests, and started to invest in better
quality accomodation, wellness facilities, restaurants.

Many spas finally discovered the advantages of offering
wellness programs, stress relief programs for managers,
weekend wellness stays. In short, services in high demand
from wealthier Slovak and foreign visitors alike.

Beside private clients, Slovak spas are increasingly keen
to negotiate contracts with German and Austrian health
insurers who would send patients to Slovakia for the
excellent therapeutic and medicinal spa treatments.

Depending on the consistency of the water, each of the
Slovak spas is indicated for specific illnesses -
among others arthritic and rheumatic diseases, problems
of the kinetic apparatus, cardiac illnesses, neurological
diseases, digestive tract diseases.

The most famous Slovak spa in Piestany has been successful
in attracting clients mostly from Germany, Austria, Czech
Republic, as well as the Middle East.

Below is a list of Slovakia's most renowned healing spas.

Piestany (www.spa-piestany.sk)

Bardejov (www.kupele-bj.sk)

Rajecke Teplice (www.rajeckapohoda.sk and www.spa.sk)

Trencianske Teplice (www.slktn.sk)

Turcianske Teplice (www.turcslk.sk)

Bojnice (www.kupele-bojnice.sk)

Sliac (www.spa-sliac.sk)

Dudince (www.dudince.sk)

All over the country many other, smaller spas can be
found, built on mineral and thermal springs with proven
healing powers. As their owners start awakening to the
new business possibilities, it will be exciting to watch
the growth and improvement of these treasures, given to
Slovakia by mother nature.

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3) Exceptional Old Town Apartments - Last Available!

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You now have a last opportunity to acquire a top quality
brand new apartment in Slovakia's most prestigious location,
the first district of Bratislava (Old Town).

The 2 and 3 bedroom apartments overlooking a city park are
proving hugely popular in Bratislava, and many have been
reserved by local families even before an official release.

So, don't wait...this is your chance to get the best of
both worlds - a luxury new apartment yet in the most
prestigious 1st district, the historic Old Town.

Right on your doorstep you will find all Bratislava is
famous and loved for - historic palaces, museums, countless
restaurants and cafes, shops and designer emporiums,
theatres, opera, entertainment and leisure.

Within a short walk are all of Bratislava's 4-star, as
well as most 3-star hotels, offices and company HQs,
banks, universities, government offices and embassies.

And, if you are buying for investment, you will be pleased
to know that...

* Bratislava's Old Town is the area of highest rental
demand in Slovakia, and good quality properties let fast
with steady yields of 6-8% for long term lets (and over
10% for short lets to business and tourist visitors)

and, what's more...

* Bratislava's 1st district has seen the highest capital
growth in the country (20% p.a. over the last two years)

And, while any better quality properties in the Old Town
are in very high demand for both sales and rentals, having
a new built apartment in this area comes close to hitting
the lottery.

So, act now and grab your piece of the best Bratislava
has to offer - at prices 10 times lower than you'd pay
for a comparable property in London or Paris!

Plus...you will also benefit from an exclusive offer we
have negotiated for our (20) units and have your apartment
delivered inclusive high standard fixtures while the other
units are being sold to locals as shell apartments.
This represents a discount of up to 10%!

The last apartments are available...Don't let this
exceptional opportunity slip through your fingers!

Call us NOW if you wish to secure one of the remaining
properties...whether as an investment or your dream
home in a vibrant historic city, you deserve the best!

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As a registered member of Slovakia Investment Property you
will always receive first notification of developments and
first opportunity to choose and reserve your preferred unit.

If this email was forwarded to you by a friend and you are
not a registered member, please remember that you need to
register in order to be able to receive notifications and
view our deals.

To join FREE of charge, please follow the link below:
http://www.slovakiainvestmentproperty.com/register.php

PLEASE REMEMBER:
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Slovakia Investment Property is not your typical UK
company of UK nationals claiming to be foreign property
experts. Not only have we teamed up with the best local
experts in Slovakia, we are Slovak nationals with first
hand experience of the Bratislava market. And yes, we
also put our own money into the opportunities offered.

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4) Your Questions Answered

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"I heard VAT is charged on all new property purchases in
Slovakia. Is this true?"

Indeed, Slovak (19%) VAT is payable on all new and
recently built property (up to 5 years after completed).
When buying a new property, VAT is always included in
the purchase price.

However, this does not mean the 19% is money lost.
It's not an expense, but rather part of the property
price. The reason is that VAT is only paid once.

If you have purchased a property from a developer, you
have paid 19% VAT. Yet when you come to sell, neither
yourself nor your buyer will pay VAT again. (Unless
you as the vendor are a Slovak VAT payer, in which case
you would have to pay VAT to the government, and could
charge it to your buyer; this however, would hardly work
if your buyer is a non VAT payer.)

So, let's suppose that you are a private buyer (meaning
not a Slovak VAT registered business) and you purchase
a new built property at GBP 100,000.

>From the 100k you paid to the builder, 19% was VAT (that
the builder, as a VAT payer, paid to the government).
If you sell in say, 2 years, and there has been no
capital growth, your buyer will pay you GBP 100,000
for the property. VAT is not paid again.

Therefore, while VAT is payable on new property, it
simply forms part of the property value, and is NOT
an expense or money you lose on a transaction.

If you have any question you want to see answered here,
please send it to us: contact@slovakiainvestmentproperty.com

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5) WIN a Bottle of 'Tokaj'! (Prize Draw)

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As every month, it is again time to give one of you the
chance to win a bottle of some of Slovakia's most popular
wines and liquors. This time, a bottle of the famous Tokaj
(or Tokay as it is known internationally) wine awaits a
lucky winner.

The lucky June winner is Ms. S. Hanson. Congratulations!

All you have to do to be entered into the prize draw is email
your answer to our Question of the Month before 15 August to:
competition@slovakiainvestmentproperty.com.

It's as easy as that! We will contact the winner to obtain
the postal address. Good luck!

Question: Are you planning to buy residential property
overseas through SIPP after April 2006?

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6) Tell Us What You Think!

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We would love to hear what you think of this issue of our
newsletter. We hope you find the information useful and
wish you best success in your investment activities.
And of course, if you have any suggestions for upcoming
issues that you'd like to share with us, please send them!

Just e-mail us at: contact@slovakiainvestmentproperty.com

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We are looking forward to seeing you next month. In the
meantime, if you have any questions or would like to
request further information, please contact us at
info@slovakiainvestmentproperty.com or at
+44 (0)207 152 4014.

Best of success,

Petra Gajdosikova
Managing Director
Slovakia Investment Property
www.slovakiainvestmentproperty.com

Slovakia Investment Property is a trading name of
Alpha Real Estate Investments Limited