In the last few years, the real estate market has been stagnating in Slovakia and Europe, affected by the global economic crisis. This year, however, the commercial real estate market began waking up and the investors showed their interest to invest. The volume of investments on the Slovak commercial buildings market reached approximately EUR 100 million in the first six months of this year. It was Colliers International that executed two-thirds of these transactions on behalf of our clients.
Investors now more active
Colliers International expects the increased activity on the investment commercial property market to continue in the second half and predicts that the volume of investments will climb to EUR 200 million. “We are seeing greater demand on the market, particularly for quality commercial buildings that are characterised by long serviceable life, low operating costs and have creditworthy tenants contracted for a long term," Ermanno Boeris, a Company Director, explains the situation.
New players coming to the market
The market recovery was confirmed, among others, by the activity of new institutional investors such as Generali Group or Nepi. The largest Czech insurance company, Českápojišťovna, a part of Generali Group – the Europe’s leading insurance group, bought two buildings in the Apollo Business Center IV office complex. This major transaction took place at a price implying a net rate of return for the buyer slightly above 7%. (Note: price = net operating annual revenue from the building / net rate of return).
HB Reavis is the developer and marketer of this office complex, spanning a total leasable area of 32,400 square meters. “This is yet another investment transaction confirming our own forecasts, namely that this year the volume of investments in Slovakia will reach the level seen in 2008,” said Ermanno Boeris, a Director of Colliers International consulting company that represented the new owner of the building (Generali Group) in the sale process.
Interest also seen in quality real estates outside Bratislava
The manufacturing plant in the Sučany Industrial Zone near Martin also changed hands in the first half of the year. Ingsteel, spol. s r.o. sold the building with a total floor area of 17,000 square meters to Tatra Asset Management. The value of this transaction is in the yield of 9.1 percent. Colliers International represented the seller of the building in the sale process.