A record year for investment properties

The region is in the focus of big real estate firms, which may contribute to an increase in foreign investments in near future.

(Source: Courtesy of Central)

The activity on the Slovak market of investment properties broke records in 2016 when the volume of transactions increased 94 percent to €853 million.

“We notice an increase in interest of global investors in the central European region, and also Slovakia,” said Marián Mlynárik, head of the investment properties department at CBRE company, as quoted by the SITA newswire.

The region is in the focus of big real estate firms, which may contribute to an increase in foreign investments in near future, he added.

This is mostly the result of enough liquidity in the global market and interest in higher yields which this region offers. The Slovak market may in this respect offer more interesting investment opportunities than its neighbours, Mlynárik said.

Slovakia generates on average 1-1.5 percent higher yields that the Czech Republic or Poland, while the macroeconomic risks in these countries are very similar, he added.

“The significant importance is the liquidity and the size of the market which causes this difference,” Mlynárik said, as quoted by SITA.

He also pointed to the fact that while in the past, foreign investors focused mostly on the Czech Republic and Poland, in 2017 the investment may move to Slovakia, Hungary and Romania.

“The restricting factor, however, is the limited number of quality investment opportunities,” Mlynárik said.

Regarding the total number and volume of completed transactions, the retail sector dominated in 2016 with 11 retail objects costing altogether €417 million, 188 percent more than the previous.

Among the most important transactions was the sale of Bratislava-based shopping centre Central for €175 million and the sale of shopping centre Laugarício in Trenčín. The sales are set to continue in the coming years, mostly in regional capitals, according to CBRE.

Also the office buildings sector grew last year, with transactions amounting to €118 million, an increase of more than 10 percent compared to 2015. The most important transactions concerned the sales of Dell headquarters, the office building Europeum on Hodžovo Square in Bratislava, and the Twin City A building, also in Bratislava.

The industrial real estate sector was dominated by the sale of logistics parks belonging to HB Reavis company to the portfolio of Australian Macquarie Capital Group for €79 million, SITA reported.

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