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).
Company owners are searching for more effective solutions for managing their companies. One of such solution is shared office space; as much as 80 percent of companies using this solution put cost reduction as the reason. This way they save especially on costs needed for acquisition of offices and rentals, as well as repair and maintenance costs, a survey conducted by International Workspace has confirmed.
Extensive reconstruction of Mlynské Nivy Street in Bratislava and construction of a brand new central bus station, including an adjacent high rise office building, are progressing. Currently almost 450 workers of various professions and 18 cranes are working on it, the biggest construction site in central Europe at 4.4 hectares large. The developer HB Reavis still promises to launch the new bus station in late 2020.
In the former industrial zone on Račianska Street in Bratislava, next to the Lidl retail store, stands an old brick smokestack and concrete beams. These are the remnants of a long defunct parquet factory. Developer Corwin plans to replace the remnants with Guthaus, a residential complex with a new vision for housing quality.
Good office spaces keep employees happy at work, while having a modern, healthy and attractive office is also an efficient tool for recruiting new talent. Companies in Slovakia are aware what influence the working environment has on their employees and design their offices accordingly, show results of an annual competition organised by the real estate consultancy CBRE.
European commercial real estate investment volumes reached a record high of €312 billion in 2018. This represents a 0.3 percent increase on 2017, which was previously a record, when total investment volumes reached €311 billion, according to the latest data from leading global real estate advisor, CBRE.
Germany is the sixth European country in which the Slovak developer HB Reavis is active. In mid-February it announced two major acquisitions in Berlin and Dresden totalling 3.5 hectares. The announcement followed only a few days after media reported on the sale of some HB Reavis projects in the Czech Republic.
The oldest shopping mall in Bratislava, Polus City Center in Bratislava’s Nové Mesto borough, is undergoing major reconstruction. With an investment of €4 million euros, the interior and exterior of the shopping mall will undergo radical change.