You can get a cas­tle for a song—so what if the draw­bridge creaks and the moat leaks?

A Czech bro­ker­age list­ing only his­toric build­ings racks up sales “This is a busi­ness for dream­ers and en­thu­si­asts”

Bloomberg Businessweek (Asia) - - CONTENTS - −Ladka Bauerova The bot­tom line Natalia Makovik finds that be­ing a his­tory buff helps her sell Czech fixer-up­per cas­tles to wealthy Rus­sians.

The Libejovice chateau looks like some­thing out of a 19th cen­tury ro­man­tic novel: an el­e­gant, mus­tard­hued Re­nais­sance palace with tall win­dows and elab­o­rate bal­cony rail­ings bear­ing the noble Sch­warzen­berg fam­ily's coat of arms. Natalia Makovik will sell it to you for less than the price of some Man­hat­tan stu­dio apart­ments. The catch: Restor­ing the place, a two-hour drive south of Prague, could cost 10 times the pur­chase price. “I look at a ruin, and I see an in­vest­ment op­por­tu­nity,” says Makovik, founder of VIP Cas­tle, a real es­tate bro­ker­age spe­cial­iz­ing in his­toric build­ings.

There are plenty of such op­por­tu­ni­ties in the Czech Re­pub­lic, with its 2,000-plus cas­tles and chateaux, the legacy of a tur­bu­lent his­tory of feu­dal lords, royal dy­nas­ties, and mi­nor aris­to­crats. Makovik started her busi­ness in 2007, eight years af­ter she ar­rived pen­ni­less from her na­tive Be­larus. The his­tory buff had fallen hard for the run-down cas­tles she dis­cov­ered in the Czech coun­try­side. Lack­ing

the money to buy one, she de­cided to make them the fo­cus of her ca­reer— first as a tour guide and then as a real es­tate agent. Al­though it took Makovik more than five years to close her first deal, she says she now sells up to three his­toric prop­er­ties a month, priced from €12,000 ($13,000) to €4 mil­lion. She typ­i­cally takes a 3 per­cent com­mis­sion, which last year earned her about 4 mil­lion Czech ko­runas ($161,000). The 400 or so prop­er­ties she lists range from rel­a­tively mod­est brick and stone manors to pala­tial ex­panses with gar­dens, ball­rooms, and enough beds for the ball guests to sleep over. Be­cause many of the prop­er­ties are owned by mu­nic­i­pal­i­ties, she trav­els the coun­try speak­ing with may­ors and town rep­re­sen­ta­tives. Typ­i­cally it takes months of meet­ings to per­suade of­fi­cials to sell what many con­sider a part of their lo­cal her­itage.

Makovik faces com­pe­ti­tion from in­ter­na­tional real es­tate com­pa­nies such as

Cen­tury 21 and Re/Max, which are adding more his­toric prop­er­ties to their port­fo­lios. She says she has an edge as the only com­pany fo­cus­ing ex­clu­sively on such build­ings. And with her back­ground, she says she can bet­ter re­late to her clients—mostly wealthy Rus­sians or Ukraini­ans look­ing to park their money abroad. “To sell a cas­tle, you have to be more of a psy­chol­o­gist than a real es­tate agent,” she says. “It can take years to cul­ti­vate a client and find the right prop­erty.” Lenka Duskova, a bro­ker from

Lux­ent, an agency that spe­cial­izes in high-end homes in and around Prague, says sell­ing cas­tles is a chal­lenge. Clients love the idea of liv­ing in an el­e­gant his­toric manor, but it doesn't take long be­fore they balk at the costs of ren­o­va­tion and shy away from the re­al­i­ties of liv­ing in the big­gest build­ing in a tiny Czech town. “It's not an in­vest­ment,” Duskova says. “This is a busi­ness for dream­ers and en­thu­si­asts.”

In 2010, Sergei Ch­er­nichkin, a

Rus­sian en­tre­pre­neur, swooned over a 16th cen­tury ruin in Kynsperk nad Ohri, a town of 5,000 near the Ger­man bor­der. Makovik was of­fer­ing it on be­half of the mu­nic­i­pal­ity for 300,000 ko­runas. Ch­er­nichkin couldn't re­sist and de­cided to re­store the prop­erty to its orig­i­nal use as a brew­ery; beer has been made in Kynsperk since 1595. He cre­ated a brand called Kynsper­sky Za­jic and built a restau­rant serv­ing lo­cal spe­cial­ties such as roast pork and dumplings. Next up: a ho­tel and a spa where guests can in­dulge in beer baths and malt skin treat­ments. “The place had a 400-year his­tory of brew­ing, and I was re­ally in­trigued,” says Ch­er­nichkin. “I would have never been able to do any­thing like that in Rus­sia.”

Price is a big part of Makovik's sales pitch. Cas­tles in the Czech Re­pub­lic are a bar­gain com­pared with Bri­tain, France, Italy, or Ger­many, where sim­i­lar prop­er­ties typ­i­cally cost 5 to 10 times more. Rel­a­tively in­ex­pen­sive la­bor makes ren­o­va­tions more af­ford­able, and Czechs have no in­her­i­tance taxes and will give tax breaks to own­ers who re­store his­toric build­ings.

The ask­ing price for the 54,000-square-foot Libejovice chateau and its over­grown 80-acre park in bu­colic south­ern Bo­hemia is €1.25 mil­lion. From a dis­tance, the place looks op­u­lent. On closer in­spec­tion, it's a wreck: Icy wind whis­tles through bro­ken win­dows, the roof sags, and ripped-up par­quet floors are partly cov­ered by cheap linoleum. A flo­ral-pat­terned stucco ceil­ing is ob­scured in places by crude plas­tic flu­o­res­cent lights. The 90 bed­rooms share just four com­mu­nal show­ers.

It tells the story of 20th cen­tury Europe. The Sch­warzen­bergs (the fore­bears of the re­cent Czech for­eign affairs min­is­ter and pres­i­den­tial can­di­date Karel Sch­warzen­berg) lost the cas­tle in a land re­form in 1923. The palace was used by the Nazi-era Hitler Youth dur­ing the Ger­man oc­cu­pa­tion, then by the Soviet army in com­mu­nist Cze­choslo­vakia. Each group in­flicted its own dam­age, and com­mu­nist in­dif­fer­ence to aris­to­cratic her­itage did the rest. For the dream­ers who make up

“To sell a cas­tle, you have to be more of a psy­chol­o­gist than a real es­tate agent. It can take years to cul­ti­vate a client and find the right prop­erty.”

—Natalia Makovik

most of Makovik's cus­tomers, the her­itage and even the di­lap­i­da­tion are all part of the al­lure. “Th­ese peo­ple al­ready have ev­ery­thing—cars, pri­vate planes, beach houses,” she says. “But when they see a his­toric chateau, their eyes light up. It's like a fairy tale for them.”

▶ Chateau Mos­tov Built 17th cen­tury Fea­tures Has been re­pur­posed into a ho­tel, with 100 guest beds, plus a dun­geon €1,500,000 ◀ An­ces­tral cas­tle of Ernest Solvay Built Late 19th cen­tury Fea­tures 50 rooms, pool, cinema, sauna, and bil­liard room

▼ Fortress Kun­zov Built 1907 €450,000

▶ House of Geydl Built 1557 Fea­tures A Re­nais­sances­tyle man­sion with two apart­ments and a pas­try shop €425,000

▶ Cas­tle of Count Thurn Built Late 17th cen­tury Fea­tures Price in­cludes ad­ja­cent sum­mer res­i­dence; brew­ery and wine cel­lar also avail­able for pur­chase €3,000,000

€270,000

▲ Fort of Olo­mouc Built 1853 Fea­tures The prop­erty is sur­rounded by a moat €450,000

▲ Kolovratsk­y Cas­tle Built 1595 €19,000

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