Economic boom drives investments in real estate

The arrival of Jaguar Land Rover is impacting the industrial as well as residential real estate market.

The new bus station in Bratislava is under construction.The new bus station in Bratislava is under construction.(Source: TASR)

With the economic growth that Slovakia is experiencing, investors are increasingly turning to the real estate sector again.

Slovakia remains one of the fastest-growing economies in the eurozone, with an expected growth of 4.1 percent of GDP in 2018, driven by the launch of production in the brand new plant of the British Jaguar Land Rover in Nitra. The automotive industry and its suppliers continue to fuel the current demand for new industrial premises while the positive development in the labour market drives further demand for office space. Growing wages drive retail sales and make the retail real estate sector more interesting for investors.

Find the right product

The total investment volume reached just under €500 million during the first half of 2018 in Slovakia, a significant amount compared to the €535 million for the year of 2017 and the record-breaking €850 million in 2016. Real estate consultancy company JLL Slovakia sees this as the result of several mid-volume level deals slipping from the end of 2017 to the first half of 2018, as well as increased liquidity and investment activity on the Slovak market.

Read also:Automotive industry gets a boost but also faces challenges

“The investment market is boosted by the increased demand from Slovak and CEE-based investors, currently buying mainly core assets,” said Rudolf Nemec of the capital markets department at JLL Slovakia. “There is also an ongoing appetite for value-added products at distressed prices, which is a very scarce product.”

Moreover, more money is heading towards the regions outside Bratislava. While this trend started in the retail and industrial sectors, it is now arriving in the office space.

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