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What does the coronavirus epidemics mean for the commercial real estate in Slovakia?

Currently, it is very difficult to predict how the coronavirus (COVID-19) pandemic will develop and estimate its’ effect on the economy. Extraordinary measures, introduced by the government of the Slovak Republic, are only sustainable in the short term due to the size and openness of the Slovak economy.


Economists agree on the fact that the main risks arise from the high integration of the open economies in the region with the European and global trade flows and supply chains. In Slovakia, where exports account for more than 80% of the GDP, sensitivity to possible disruptions is even higher with the biggest concern related to the tight trade links with Germany. The stop of the production in Volkswagen’s, PSA Peugeot Citroën’s and Jaguar Land Rover’s Slovak plants, with the other major employers ready to follow, will also have a substantial impact.

The measures adopted by the Slovak government are closely monitored by the crisis management teams of the large corporations operating in the country, which have developed plans for securing business continuity. Depending on the situation, those scenarios are revisited and updated.

The important question, however, lies in the aftermath of the event. Once the special government measures are abandoned, pandemic’s impact on the real estate market and the national economy will become clearer. It should be noted that the situation we are facing now is not the same as the economic crisis of 2008, caused by financial markets’ speculation. This time, under the burden of the essential emergency measures introduced by the state, which resulted in the closure of the majority of retail operations in the country, banks will be forced to react to a wider spectrum of clients at risk, incapable to repay loans. In these conditions, government support measures and banks’ reactions become of paramount importance.



Our experts present possible scenarios of the impact of the coronavirus (COVID-19) on the economy and on individual commercial real estate sectors.



Investors: The situation on the investment front is developing and changing rapidly. From today’s perspective, we expect the transactions currently being processed and those at the finalization stage, to be completed successfully. In case of the new transactions, the parties involved might choose to wait and see how the situation develops further. Reactions of the banks and the countries (national governments as well as the European Union as a whole) in addressing the situation are crucial in determining further sentiment. Adoption of the special government measures to mitigate the loss of sales of the retailers as well as the threats of production outage are expected, however it’s too early to assess such measures at the moment.

Banks: Some banks have already paused the assessment and approval of the new transactions, focusing solely on the transactions currently being processed. Others have not stopped the provision of the new loans completely but are currently waiting for the managements’ decision on this matter (expected by the end of this week).

All financial institutions have declared their will to help their clients to the maximum possible extent, focusing on the provision of the tailor-made individual approach. Some examples of such cooperation include providing deferment of instalments, lengthening of repayment periods, etc. Considering the situation, it can be expected that the banks will start to dedicate substantial capacities to restructuring processes, increasing caution and selectiveness for the new transactions.



Tenants are currently adapting to the situation, increasingly using ‘work-from-home’ option, wherever the circumstances allow to do so. Remote working and teams gain popularity, establishing themselves as a new trend, expected to be used as a backup system in future. Even though the new approach works well in general, it proves to be more demanding for families with children, as the teaching is also expected to be carried out from home.

In terms of the longer-term perspective, the situation highlights the importance of the remote work option, as well as the capability of forming and performing in virtual teams. Establishing effective virtual workplaces and backup systems will help companies to better adapt to crisis situations in future.

Landlords are also switching to the use of video conferencing systems, as well as start to offer virtual property tours.

Developers declare their interest to continue with their current pipeline projects, however, a substantial slowdown in delivery is expected.



Automotive: three car production plants in Slovakia, including Volkswagen, PSA Peugeot Citroën and Jaguar Land Rover, are currently stopping their production lines, following the example of the brands’ parent factories. The suppliers are expected to join, closing down either partially (if they have other production programmes), or completely, until the operation of the automotive manufacturers resumes.

This will naturally impact industrial real estate, as the affected parties will be forced to reassess their plans, including the revisit of the outlined widening of production and related physical space expansions. The situation can also be reflected in the increase of caution over the prolongation of the current rental contracts and well as in signing of the new ones.

Preventive measures introduced to contain the further spread of the disease are also considerably affecting the manufacturing sector.


Transport and shipping: as the brick and mortar stores shut down, B2C sector is booming. ‘Payment upon the delivery’ options are suspended in an effort to avoid personal contact as much as possible. Some of the home delivery value-adding services, such as ‘to the room delivery’ and installation are also temporarily banned with the deliveries taking place only to the ‘first lockable door’. The share of cashless transactions though the terminal is growing.

B2C segment, on the other hand, is facing a considerable slowdown, as the goods are not transported from warehouses to the shops, which remain closed (with the exception of the FMCG sector).

Lorry transport is slowing down with queues being formed at the large border crossings due to the checks of the drivers’ health status, priority is given to the transportation of medical equipment and drugs, as well as FMCG goods. The average waiting time at the border crossings is estimated at 1.5h – the figure substantially higher than the norm.

The situation as a whole is likely to further strengthen the position of e-commerce, resulting in even greater demand for new logistic centres and so-called ‘big box’ forms of commercial real estate.

According to our records, developers are stopping the pre-approved (but not yet in construction phase) speculative projects, which is a logical step given the rising investor uncertainty.



Tenants: along with the high saturation of the retail market in Slovakia (especially in Bratislava) the threat of the further spread of the disease brings in yet another uncertainty factor to the segment, which is already affected by the current emergency measures the most. The loss of sales is expected to translate into the inability to make regular rent payments (particularly, for small and medium-sized retailers counting of stable sales revenue flows and generally lacking contingency planning). Naturally, F&B and recreational schemes are also suffering from the current shutdowns.

Landlords: unfavourable revenue situation, affecting the rental payment flows, may in turn result in the inability to repay loans for those landlords using bank financing schemes. The initial step from the landlords’ side can include postponing the rent payments until the emergency measures are eased, after which subsequent negotiations of the debt repayment and the terms and conditions of the loans will take place. The best outcome can be achieved by the active participation of all the stakeholders, including the state, banks, landlords and tenants.


You can download pdf via the links: 

COVID 19 prediction_english

COVID 19 prognozy_slovak




“This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a “Global Pandemic” on the 11th March 2020, has impacted market activity in many sectors, creating an unprecedented set of circumstances on which to base a judgement.  This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. Given the unknown future impact that COVID-19 might have on real estate market supply, demand and pricing variables, we recommend that you recognise that our research and analysis is far more prone to market uncertainty, despite our endeavours to maintain our robust and objective reporting”

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International Real Estate Manager with more than 15 years of experience in the commercial property sector at top real estate companies,  delivering significant return on investment through strategic planning  and income-oriented approach across all asset types, including retail and office.  Richard is goal-driven leader able to apply superior administrative skills to achieve success across corporate firms and private equity investors.

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