PL

Slovak investment below EUR 600 mln

Investment & finance
SLOVAKIA The total investment volume in Slovakia for 2017 was recorded by JLL at just under EUR 525 mln, which was below the company’s EUR 600 mln expectation, since several deals failed to close before the year-end and will be completed in 2018.

According to JLL, Slovakia does not currently provide many opportunities to invest in product of prime quality with a core risk profile as such assets have been mostly traded in the recent past. On the other hand there are higher-yielding subprime properties available that have not been already traded in the current property cycle. Investors are currently looking at A-class value-add industrial assets, B-class retail assets in secondary and tertiary locations as well as core+ and value add office opportunities in Bratislava.


The industrial sector was once again the most active with four new investors entering the Slovak market. Logistics Park Galanta- Gan, sold by Prologis and acquired by CNIC, was the largest single asset industrial transaction ever closed in CEE both by investment volume and leasable area (240,000 sqm). Another significant deal included GLL’s acquisition of Amazon’s return centre in Sered, Western Slovakia; a 60,000 sqm prime asset which set a new price benchmark for Slovakia. Other notable transactions included the sale of LogCenter Nove Mesto – part of a large platform deal – acquired by China Investment Corporation (CIC) and Karimpol’s sale of Logistics Park Senec to Palmira.

The retail sector is seeing strong investor demand for both prime shopping centres as well as smaller regional assets across the country, despite a limited availability of product. In 2017, the KLM Real Estate Fund of Prva Penzijna, the real estate asset management branch of Postova Banka, increased its exposure to the retail sector through the acquisition of several retail warehouses across secondary Slovak cities, as well as through the forward funding of the newly constructed edge-of-town Eperia shopping centre, a 20,000 sqm retail scheme of regional importance in Prešov, Eastern Slovakia.

The office sector in Bratislava is also seeing increased demand from investors, although H2 2017 only saw the sale of Western Tower from CTP to Wood&Co. and the acquisition of Reding Tower II by an Israeli-based investor. Both buildings are below 10,000 sqm GLA and are located in non-core office locations in the outer city belt. A number of mid-sized and larger transactions are to close in H1 2018.

“For 2018, we expect the total investment volume to reach EUR 650 mln. The record for Slovak investment volume of app. EUR 850 mln in 2016 could be within reach if one or two large trophy assets are traded. However, the total number of deals is likely to be similar to those in the previous year, which results from market liquidity and a rise in transparency,“ says Rudolf Nemec a senior investment analyst at JLL.

The yields for Q1 2018 according to JLL come to 6.5 pct for offices, retail warehouses: 7.5 pct, shopping centres: 6 pct, high streets: 7 pct, Industrial and logistics with a standard weighted average unexpired leasing term of 3-5 years at 7.5 pct and prime hotels operating in the capital at 7.25 pct.

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Edition 3 (286) March 2024

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