Slovakia’s commercial real estate market is expected to reach an all-time high in its investment activity this year, according to a market research conducted by Colliers International.
Following a record investment performance in 2016, the number of transactions closed in H1 2017 has fallen. Despite the trend, experts are forecasting that the sum of investment transactions at the end of 2017 will be much higher than the long-term average of €290m per annum between 2009 and 2015. The estimate is based on the expected number of transactions at the end of the year, favourable macroeconomic conditions and availability of competitively priced quality stock.
Most of the 2017 transactions were attributed to the sector of industrial and logistic buildings followed by offices. The largest investment transaction in the first quarter of 2017 involved the sale of Lozorno logistics park with the total area of 118,000 sqm. The transaction took place between CPI property group and White Star Institutional investor, whose market share in Slovak industrial Class A thus increased to 6 %.
“Slovakia’s commercial real estate market remains attractive for both local and institutional investors despite the fact that the supply does not reach the levels of the neighbouring markets,” says Ermanno Boeris, Managing Director at Colliers International Slovakia.
Office real estate market
In H1 2017 the total stock of office buildings for rent increased by approximately 69,000 sqm with the completion of Phase I of the project Blumental, blocks B and CA of Zuckermandel, the building UNIQ at Staromestská ulica in Bratislava, and Panorama Busniess Center II. As a result, the vacancy rate of office buildings in H1 2017 fell to 6.77 %.
The total stock of modern office buildings in Bratislava exceeded 1.7 million sqm. H2 2017 is expected to bring another 40,000 sqm of office space. There are currently approximately 234,000 sqm of office premises under active construction.
The majority of this segment’s transactions were pre-leases. The office real estate market in Bratislava is dominated by professional services, IT, pharmaceutical and medical sector.
Industrial real estate market
The development of Slovakia’s industrial and logistic real estate is positive. The majority of industrial and logistic spaces are still concentrated in the capital of Bratislava and the western part of the country. There are several projects planned for Eastern Slovakia as well. Speculative development aims at the regions of Senec, Nové Mesto nad Váhom and Žilina.
The market remains favourable for developers, since the high degree of competition is pushing rents down despite the low vacancy rate fluctuating around 2.2 %.
Retail real estate market
The retail real estate market continues to be one of the most attractive sectors. The retail stock demand is driven by the growing GDP, historically low levels of unemployment and rising real wages.
In H1 2017 the total retail stock in Slovakia amounted to around 1.66 million sqm. Traditional shopping centres made up 71 % of the total stock whereas 29 % were represented by specialized shopping centres (retail parks and big box retail). More than 180,000 sqm of retail area are under active construction, which will manifest in a higher number of shopping centres in the foreseeable future.
Retail space (sqm) / 1000 inhabitants. Source: Colliers International
Despite the fact that Bratislava is the most saturated with retail areas, even more than the average of major European cities, more projects will appear in the next few years. These include an extension of the shopping centres Eurovea and Aupark as well as a new building of the Mlynské Nivy bus station. A retail park in the new residential area Slnečnice is also under construction.
LPP is expanding its presence in Romania with the opening of four new stores in Iulius Mall Suceava. Reserved, Mohito, Cropp, and House stores will occupy a combined 3,100 sqm and are slated to open in H1 2025, as part of an expansion project implemented by Iulius.
Romanian delivery firm FAN Courier has leased 4,800 sqm in the ELI Park Bacău logistics project, developed by local group ELI Parks.
ARM Hungary has leased the entire 9th and 10th floors of Millennium Gardens in Budapest. iO Partners represented ARM Hungary in the transaction.
New appointments
Maciej Müldner has been appointed as the new Chief Financial Officer (CFO) of MLP Group. An experienced executive, he has spent nearly 20 years contributing to the development of the Skanska Group in Central Europe.
Panattoni Income Fund has appointed Olaf Bruns as Managing Director Business Development DACH. Earlier this year, the fund’s team was also strengthened by Piotr Boruc, who took on the role of Head of Finance and Reporting.
CBRE has named Hristo Karakostov as Head of Advisory & Transactions Office Services Department for Bulgaria, within its Southeast Europe (SEE) office. He succeeds Monika Gajewska, who will continue to lead the Occupier Business Development efforts for the SEE.
Speedwell Development has appointed Maria Jianu as its new Leasing Director, tasked with growing the tenant portfolio and strengthening strategic partnerships for projects such as Queens District, SpacePlus and Paltim.
Facility management company Atalian Romania has announced a 26.5% increase in turnover compared to 2023, reaching €29.5 million, while its net profit amounted to €1 million.
According to the Savills European Industrial and Logistics Occupier Markets report, the industrial real estate market is expected to experience a breakthrough year, potentially leading to a significant market recovery. Stabilisation of demand and gradual absorption of speculative warehouse developments completed in the past year is expected in the Czech Republic.
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