Arete Invest, a Czech investment fund focused on real estate, plans to invest around €30 million in Slovakia in 2018. It is considering new construction on industrial premises it already owns as well as new acquisitions. The company sees great potential in the Slovak market.
“The Slovak market is advantageous for us for several reasons,” said Lubor Svoboda, Arete Invest co-founder and board member, as cited by the TASR newswire. “These are chiefly its economic stability, openness, the European Union, standardised legislative procedures and a similar mentality.”
Several studies have shown that there is less competition in Slovakia and definitely higher demand for industrial real estate than in the Czech Republic, pointed out Svoboda.
Arete Invest is considering investing in two fields. The first one is a new construction project on premises that it already owns that would bring new jobs. At the same time, it has mapped out some investment opportunities and is currently holding talks with certain entities on purchasing new plots that have already been built up and are profitable.
The investment fund currently owns two class A premises in Slovakia. The first one is an industrial area in close proximity to Kia’s automotive plant near Žilina. This plot has been completely rented out to car component supplier Grupo Antolin. The second one is an industrial and logistics park called Arete Park Nové Mesto, located near Nové Mesto nad Váhom (Trenčín Region), part of which is made up of further plots of land designated for construction development.
The National Bank of Slovakia has also positively evaluated the development of the commercial real estate sector. Both the manufacturing industry and the commercial real estate sectors have posted strong growth in loans, with the quarter-on-quarter rate attacking a level of 15 percent during the first quarter of 2017. The aforementioned development continues to increase the importance of sectors that can also be described as relatively sensitive to economic development, reads the central bank’s latest Financial Stability Report.
After existing and potential clients showed an eminent interest in central Slovakia, the biggest logistics real estate company in Slovakia, Prologis, began to look for suitable land for the construction of a new industrial park in the desired locality close to Nitra, Banská Bystrica and Zvolen. It found it in Žiar nad Hronom.
The developer YIT Slovakia has launched the sale of apartments in the second building of the fifth, last, phase of the Tammi Dúbravka development. The new block of apartments will provide 42 apartments. It will be connected to the second building of the fifth phase with a community park. The sale of apartments in the first building was launched in September 2017.
The first weeks of 2018 indicate that the high interest in new warehouses in Slovakia is continuing. Developers are responding to the demand with the preparation of expansion phases for their successful projects as well as plans for new industrial premises and parks. The latter may start during the first half of 2018 and so developers would be able to offer new spaces in late 2018.
The developer Merius has brushed up its Semiramis Residence project which it plans to build in front of the Nové Mesto railway station and opposite Kuchajda lake in Bratislava. Its first attempt three years before failed as the local council did not grant it construction permission. The re-worked project with a price tag of €47 million is now undergoing an environmental impact assessment (EIA).
Prices of apartments in Bratislava have increased to their highest level since the crisis, the real estate agency Lexxus has discovered. Based on its latest residential real estate analysis, Slovaks are prepared to pay still more for apartments. This is because they fear further increases in real estate prices as well as the impact of measures taken by the National Bank of Slovakia (NBS). These may worsen accessibility of housing for the middle classes from January.
Although Slovakia has so far been able to attract new investors, in the not so distant future it may have problems with the placement of further investments. The reasons for this are the steadily declining availability of labour, the very slow development of road infrastructure and the lack of readiness of land suitable for the development of industrial parks, according to Martin Varačka, director of the industrial real estate division of the real estate consulting company CBRE in Slovakia.
Foreigners coming to Slovakia to work for the manufacturing industry try to live as economically as possible. They often do not arrive with their families and only work for a short period of time.