General Cautions

We would like to point out that inexperienced investors are always advised to consult a trusted financial expert before investing. You should never “put all your eggs in one basket” and examine our range and the risk profiles of the investments in detail. You should never invest more than 5% of your net assets in individual products with a high risk profile. FINMA, the Swiss Financial Market Supervisory Authority, offers support and assistance on how to properly evaluate offers from individual and non-regulated providers. You can contact us at any time if you feel unsure or have any questions. We are always there for you!

The investor becomes a shareholder in an operating, independent and fully fledged company. The company does not guarantee a minimum return or liquidity. Your capital is subject to risks and there may be a complete loss of the invested capital. The terms and conditions are exclusively as set out in the official prospectus, which can be obtained from Residence Victoria on the “Invest” page. Before deciding to invest, please read the risk information carefully or, if in doubt, consult a financial expert you trust. Please note that historical or projected performance data is not a reliable indicator of future gains or losses.

General Risk Warnings:

Acquiring a co-ownership interest in a property generally carries the same risks associated with acquiring sole or full ownership of a property. The advantages of acquiring co-ownership of a property are offset by additional risks. These include in particular, but are not limited to, restrictions arising from the co-ownership community, such as obligations to make additional payments, the achievement of certain voting majorities for certain investments, changes in the co-owners’ holdings (in particular if the right of first refusal is not exercised) and the requirement of joint external action, in particular vis-à-vis the property management, for which the finding of a majority can be difficult. Every interested party is required to familiarise himself or herself with all the risks associated with the acquisition of real estate in general and the acquisition of co-ownership in particular before he or she decides to acquire a property or co-ownership in a property.

Like all other forms of investment, real estate can be subject to considerable fluctuations in value and involve unforeseeable risks. In extreme cases, even a total loss cannot be ruled out.

Assumptions, guesses, estimates, forecasts:

Our website under the category “Investing” contains statements regarding future financial and operational developments and results as well as other forecasts, all of which are forward-looking or contain subjective assessments. All such statements are made on the basis of estimates, assumptions and presumptions that Residenz Victoria believes to be accurate or reasonable at the present time.

Forecasts of future value developments cannot fully cover all economic, tax and legal developments, even with conservative estimates and calculations.

The following risk factors, among others, must be carefully considered. However, this list is not exhaustive:

a) Long-term investment character

Real estate investments are long-term investments. Investment performance depends on a number of factors, including economic, legal and tax factors, which can change for better or worse during the investment period.

b) Dependence on economic developments

Investment in real estate, in whatever form, is, like any investment, subject to general economic conditions such as economic growth, inflation, changes in interest rates and general income trends.

c) Valuation risk

The valuation of real estate is based on the balance sheet date and is associated with the risk that the values determined change from then on and cannot be realised in the event of a sale of the real estate or the co-ownership share in it. The future development of the relevant valuation factors is subject to uncertainty. Although the valuation is carried out according to professional guidelines, it is associated with the risk that the values determined cannot be realised in the event of a sale, as the price depends on the market conditions at the time of realisation. This is influenced by the economy, interest rates, vacancies and supply and demand in general. In addition, the valuation does not take into account possible tax consequences in the event of a later sale of the property. Taxes due on the sale can also reduce the proceeds from the sale of a property.

d) Changes in the real estate market

The real estate market is subject to fluctuations in supply and demand. For example, the simultaneous realisation of several new construction projects in one location or in the vicinity may lead to an increase in the supply of rental space or even to an oversupply of rental space or tradable real estate. Excess supply of residential and commercial properties or rental space may lead to an increase in the vacancy rate and thus to a reduction in rental income and property prices or valuations and thus to the profitability of the investment and any sales proceeds.

e) Market risk regarding rental income

The income consists largely of the seasonal rental income from the properties. It is possible that the seasonal rental income will not be fully covered. This can have a negative impact on the profitability of an investment in real estate, but also on the liquidity of this investment. In addition, rental income can also decline due to the changing or disappearing creditworthiness of tenants. As a result, there is a risk that distributions of returns will be lower than planned.

f) Force majeure

The effects of force majeure (e.g. natural hazards such as fire, storms including heavy rain, hail and lightning, flooding and high water, landslides and landslides, earthquakes as well as snow pressure and avalanches, but also war or terrorist events, acts of sabotage, etc.) may have a negative impact on the value of the investment property (and any sales proceeds) and/or the business, financial and earnings situation of the property (and thus the profitability of the investment) despite corresponding insurance policies.

g) Contaminated Sites

Polluted sites within the meaning of environmental protection legislation can have a negative technical, operational and financial impact on the execution of a construction project as well as on existing buildings. Contaminated sites unknown at the time of purchase and valuation and which may occur later can never be ruled out. Therefore, it cannot be ruled out that remediation will be necessary after the construction phase, which will cause corresponding expense and accordingly reduce the return on the investment. It may even be necessary to bring in new equity capital for the renovation. Depending on when a property is sold, the proceeds from the sale may also be reduced.

h) Dependence on developments in legislation

Future changes in communal, cantonal, national and international laws and other regulations may have an impact on property prices, costs and income and thus on the business result and the value of the respective property. There is a risk that investors will not receive permission to acquire the investment property or that the approval process will take further time. This can happen in particular if insufficient detail can be provided to show that no persons abroad have an interest in a property in accordance with the Federal Act on the Acquisition of Real Estate by Persons Abroad (FL, SR 211.412.41) and the associated Ordinance (FL, SR 211.412.411). Although Residence Victoria endeavours at all times to disclose in detail all documents necessary for the acquisition of the property to the competent authorities, there is nevertheless no guarantee that the application and/or any permit will be processed smoothly.

i) Tax risks

Changes in legislation, case law, the practice of tax authorities (including the revocation of an existing practice by tax authorities) or agreements with tax authorities (tax rulings) may have adverse consequences for the business, financial position and results of operations of the respective real estate investment. This applies in particular to changes in the basis of assessment of taxes, tax rates and tax bases. This may also affect past financial years that have not yet been definitively assessed.

j) Location-related influencing factors

The real estate market is subject to location-related influencing factors, so that the value development can vary greatly. The location factors of a region, such as Bulgaria (Burgas), can deteriorate considerably over time, for example due to a crisis in an industry that is heavily concentrated in this region, and thus have a negative impact on the performance of a property.

k) Damage, Maintenance and Settlement of Properties

Despite careful preliminary examination of a property, unforeseen damage events with the corresponding damage repair costs as well as maintenance and renovation requirements with the corresponding maintenance and renovation costs may occur. The maintenance and, if necessary, repair of existing properties may require considerable investment, which – if at all – will only generate income after a certain period of time and may require further, fresh equity capital. If renovations or repairs are necessary, there is a risk in extreme cases that no return can be distributed. In the case of higher costs, it can happen that no return can be distributed during the entire term of the investment and even further fresh equity must be brought in. Depending on when the property or a co-ownership share in it is sold, the proceeds from the sale may also be reduced.

l) Economic devaluation

Environmental and infrastructural factors as well as regulatory factors in the immediate or wider vicinity of the investment property – such as urban and road development measures (e.g. new motorway or road) or, for example, the determination of flight routes – can lead to a reduction in the return on the property in question because the property can no longer be let or can no longer be let on the same terms or a considerable investment must be made in order to ensure letting (e.g. noise remediation). The proceeds from the sale of such a property or of co-ownership shares in it may also be lower.

m) Property risks

Depending on the age of the property, the quality of the building and the type of use, there is a risk of hazards emanating from the building that can primarily cause property damage to the building itself, but in the worst case can also cause personal injury. Although such risks are usually covered by appropriate insurance policies, it cannot be ruled out that certain damages, and in particular the costs of repairing the damage, may nevertheless have financial consequences for investors, for example by reducing the rental income and thus the return during the repair of the damage.

n) Limited liquidity in the real estate market

The Bulgarian real estate market is characterised by limited liquidity, both for the acquisition and the sale of real estate or co-ownership interests in real estate, especially for properties located in certain regions and/or for certain types of properties. This may have a negative impact on property prices. Depending on the market situation, the short-term purchase or sale of real estate or real estate shares may be impossible or only possible with large price concessions and, in extreme cases, may lead to a total loss for the investors.