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News Release

Bratislava

Slovak industrial market - over 150,000 sq m of industrial and logistics space under construction.

97% located in the Greater Bratislava region.


​As of Q2 2016, the total modern industrial stock in Slovakia stood at 1,58 mil. sq m. Second quarter bought over 12,680sq m of newly constructed industrial and logistics space when Goodman completed construction of its logistic halls (units B1 and B2) in Senec with a total area of 12,680 sqm. Approximately 50% of the space was leased to logistic company Kuehne Nagel.

The Greater Bratislava region is continuously the largest Slovak industrial region with over 60% share of the country´s supply. Currently we see increased development activity on the market with approximately 157,000 sqm of industrial space being under construction. 97 % of new development is situated in the Greater Bratislava region and only 3% in the Western Slovakia. The largest portion of the ongoing development in Bratislava surrounding is located in Lozorno (42%), followed by Senec (28%), Malacky (18%) and Bratislava (12%).

Within the above mentioned 157,000 sqm of industrial space under development, two industrial halls are in Devínska Nová Ves (18,000 sqm) and new build-to-suit hall for automotive supplier PTG in P3´s Lozorno park (16,750 sqm).

In the second quarter, we have recorded no development activity outside of the Greater Bratislava and Western Slovakia regions. We expect change in the construction as P3 plans speculative development in the Central Slovakia within their existing park in Žilina.

Samuel Šporka, Head of Industrial Agency JLL Slovakia, comments: “The improving economy and strong market confidence is being reflected in the industrial real estate market from the start of the year. The current economic situation supports expansion of existing tenants and we also see increased demand for production facilities from companies that are entering the Slovak market. With this positive outlook, we expect to have another record end of the year in terms of leasing activity and new development.”

Transactions

Leasing activity in Q2 2016 was characterized mostly by new leases (new take-up). Almost 50,000 sq m was transacted in new contracts which represents app. 66% of the gross take up. In the leasing structure, renegotiations also played stable part with approximately 20,000 sq m in Bratislava and the Western Slovakia region. 

The total volume of closed transactions in Q2 2016 exceeded 75,000 sqm which represents almost 43% increase compared to the same quarter last year (Q2 2015) and approximately 7% decrease to the previous quarter (Q1 2016). 

As for the lease renewals, over 11,000 sqm were renegotiated in the Prologis Park Nové Mesto and almost 10,000 sqm in the CTPark Bratislava. Majority of leasing activity was recordered in the Greater Bratislava region, followed by several small transactions in the Central Slovakia.  

Investment activity 

The total investment volume in H1 2016 reached approximately 310 million Eur. We have seen new market entrants in all commercial markets. Blackstone entered the Slovak industrial market through its Logicor platform via acquisition of LogCenter Nove Mesto, a prime 25,000 sq m logistics scheme from Immofinanz.

The Slovak developer 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.

60,000 sq m of vacant industrial and logistics space across Slovakia

At the end of Q2 2016, the vacancy rate stood at 3.81%. Majority of vacant industrial space within existing logistics parks is located in the Greater Bratislava region (over 48,000 sqm), followed by the Western Slovakia with 9,000 sqm, Eastern Slovakia with 2,000 sqm and Central Slovakia with only 1,000 sqm available.

Rental levels

Headline rents across the country remain stable during Q2 2016. Current market situation in the Greater Bratislava region favours tenants as they may experience one of the most favourable lease conditions over the last few years. Mainly in Senec area potential tenants profit from lower effective rents due to better incentive bonuses provided by developers. This is done due high competition within the area. In other regions situation is different as there is no speculative development announced and demand is continuously increasing. This plays in favour of landlords as rental levels are slightly growing.