Investors invested almost €500 million into commercial real estate in Slovakia during the first half of 2018. This almost equals investments for the whole year of 2017, which amounted to €535 million, the data of the real estate consultancy company JLL indicates.
“This is a result of several medium-sized transactions carried out on the threshold of 2017 and 2018,” said Rudolf Nemec from the JLL investment consultancy department, as cited in a press release. “The increased liquidity and strong investment activity, which we see on the Slovak real estate market during last few quarters, also equally helped.”
During the first half of 2018, 17 investment transactions took place in Slovakia. The retail sector dominated, followed by offices. The industrial real estate sector brought only one more significant investment. This is a consequence of a lack of investment opportunities and strong activity over the last three years.
Investors are highly interested in retail real estate, i.e. shopping centres, according to JLL. They are not looking only for first-class centres, but also smaller retail schemes, whose offer is starting to be limited as there are not many smaller retail schemes.
In terms of concrete deals, the Romanian-Polish-South African investor NEPI Rockcastle increased its market share when it acquired the premium shopping centre Mlyny in Nitra from a local developer in the beginning of 2018. Another significant retail transaction was the sale of the project City Aréna in Trnava of Vladimír Poór, acquired by a Slovak private investor.
On the Bratislava office market, JLL registered strong activity and interest from quickly growing central-European investor Wood & Company. During the second quarter of 2018 it acquired the office building Lakeside Park (27,000 square metres) from the developer TriGranit with AT&T as the main tenant, and Aupark Tower (33 000 square metres) from Heitman. Among Aupark Tower tenants is the cyber security company Eset.
The industrial real estate sector has been the busiest sector during the last few years. However, during the first half of 2018, this sector was relatively inactive with only one bigger transaction.
“We expect that the second half of the year will bring another €300-€330 million on the Slovak investment market, especially in office and industrial real estate sectors,” said Nemec.
The record level from 2016, when investments into commercial real estate amounted to €850 million, may be exceeded if investors manage to sign one or two large transactions this year.
“But already now we can say with certainty that the total number of transactions will be higher than during the few last years,” said Nemec.
Almost €5.93 billion invested in real estate in the CEE region during the first half of 2018 means an increase by about 6.3 percent y/y. The Polish market accounted for more than one half (54 percent), followed by the Czech Republic (18 percent), Hungary, Slovakia and Balkan countries (8 percent each) and Romania (3 percent).
The prestigious architecture award Arch went to the Vallo Sadovsky Architects studio for the Nádvorie (Courtyard) project in Trnava involving reconstruction and extension of a set of historical buildings in the city centre.
After more than a 10 year break, construction work on the derelict skeleton of an unfinished shopping centre in Nitra will resume. The developer Living Park will rebuild it into a complex named Promenáda Living Park, combining shopping with housing. It has already obtained a construction permit, the SITA newswire reported.
Aupark, one of the first modern shopping centres in Bratislava, is to extend its premises. A new block, for which it has already obtained permissions, should add a new parking lot as well as extension of the retail area, the Trend weekly informs on its website dedicated to real estate.
The construction industry is a huge consumer of energy and generator of greenhouse gases. Thus, it is important to pursue green building to reduce these negative impacts. In Slovakia, green buildings and ecological construction make up 20-25 percent of all newly built real estate commented Martin Pribila, an expert in construction and green building in the discussion programme Tablet TV, hosted by the TASR newswire.
Despite geopolitical uncertainty and a slow down in the economic cycle, investment in the global property market has seen a significant rise of 18 percent year-on-year to a new record high of $1.8 trillion, up from $1.5 trillion in 2017. Cushman & Wakefield, which examines global commercial real estate investment activity, assessing cities by their success at attracting capital, came to this conclusion in their latest report.
Fewer than 3,000 new apartments are available on the market of new residential buildings in Bratislava, which is the lowest figure for the past two years. As demand for new apartments is still relatively lively, prices for new units continue to grow slightly, the TASR newswire cited the real estate agency LEXXUS.
The Austrian company Soravia has opened a new retail zone in Liptovský Mikuláš in northern Slovakia, the Retail Park Liptovský Mikuláš. It is 9,000 square metres and is the first investment by the Austrian developer outside Bratislava. The investment totalling €22 million has created 100 jobs so far.