Skip Ribbon Commands
Skip to main content

News Release

Bratislava

H1 2016 characterized by new entrants on the Slovak capital market.


Slovakia´s economy rose above expectations in H1 2016. Stockbuilding, net exports and private consumption were the main contributor to the increase in GDP. The unemployment rate has continued to decline boosting private consumption which is being helped also by current low inflation.

For the second half of the year, GDP growth is predicted to be 0.3% lower than previously expected due to the result of the UK referendum. Although Slovak exports to the United Kingdom represents only 4% of total merchandise exports, indirect and second-round effects (particularly via Germany) will likely have a negative impact. On the other hand, the economy is likely to be boosted at the level of 0.7% (according to the central bank) thanks to the new investment - arrival of Jaguar Land Rover.*

Real estate market in H1 2016 - characterized by the arrival of new market entrants

The total investment volume in H1 2016 reached approximately 310 million Eur. We have seen new market entrants in all commercial markets – retail, office and industrial:  

  • At the very beginning of the year Central Shopping Center, a prime modern 36,000 sq m retail scheme, was sold by established local developer Immocap to Allianz Real Estate for reported 175 mil. Eur.
  • Blackstone entered Slovakia through its Logicor platform via acquisition of LogCenter Nove Mesto, a prime 25,000 sq m logistics scheme from Immofinanz.
  • In the second quarter HB Reavis divested its 130,000 sq m  warehouse & light production industrial portfolio, which was acquired by MIRA, part of Australian Macquarie group for reported 79 mil. Eur. The outlined portfolio consisted of 4 parks – two in Bratislava, one in Prešov and one in Ostrava, Czechia.
  • Cearus Investment Management also entered Slovakia when it acquired Cubus, a 22,000 sq m HQ of Dell shared service centre in Bratislava for undisclosed purchase price, from SEB Investment, part of Savills IM .

Miroslav Barnáš, Managing Director and Head of Capital Markets in JLL Slovakia, says: "The number of deals and investment volume are expected to outperform last year´s levels as we still feel positive about the investment climate in the rest of 2016. Market entrants as well as already established local and international players are expected to further increase their exposure."

In H1 we have also recorded country transparency ranking moving upwards (according to the JLL Real Estate Transparency Index**) and now shares the "transparent" ranking with other Central European and Scandinavian countries.  In 2016 it is clear that Slovakia has become an established and attractive investment destination offering favourable market conditions and attractive pricing when compared to other CEE markets and the Western Europe.

"In retail we are witnessing strong investor interest across geographies and asset class. Investors are also carefully watching offers and price expectations in the office segment mainly in the capital. In the industrial sector, large portfolios were sold last year, so investors wishing to deploy their capital into warehouses and light industrial parks started to look at single asset regional opportunities, and even secondary assets," adds Barnáš.

Yield level

In alignment with the mast situation in other parts of CEE, and as a result of improving market conditions, yields have already compressed and come down further in H1 2016. Our view on prime yields stands at 7.00% for offices, dropped to 6.00% for shopping centres, also compressed to 7.75% for industrial & logistics, and also decreased to 7.75% for retail warehousing.

CEE region

At ca. €5.1 billion, H1 2016 represented a 69% increase over the same period of 2015 and is the highest first half year in CEE regional investment volume since 2007 (€5.7 bn). . Our forecast for 2016 remains unchanged and we expect to record full year volumes of over €10 billion.

The first half year breakdown saw Poland pull in an impressive H1 volume to bring its share to 40%, followed by the Czech Republic (18.5%), Hungary (18%), SEE (other CEE) markets (10.5%), Romania (7%) and Slovakia (6%).  

The Slovak Investment team at JLL is a market leading advisory service which helps investors, sellers & buyers to accommodate their acquisition and disposal requirements. In last 12 months, the JLL Investment team advised on transactions exceeding €400 mil.