Slovakia real estate market view
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Loading... - Tobias Collin
- 29 Sep 2022
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A regular update on the commercial real estate market in Slovakia.
The Slovak economy is a relatively energy-intensive economy compared to other EU economies. Therefore, increasing energy prices represent one of the main drivers of the recent increase in inflation to double-digit figures. However, its growth was significantly slower than in previous months. Notwithstanding, Slovakia's commercial real estate market experienced a successful H1 2022.
The total volume of investments in Slovakia exceeded €600 million in the first half of 2022, making it the strongest half-year in the last 20 years. Although there are several pending transactions on the market, we expect decreased investment activity in H2 mainly due to uncertainty associated with rising inflation and interest rates as well as surging operating and construction costs.
With the pandemic nearing its end, one of the worst periods for the retail market has also passed. As soon as most of the measures relating to restrictions on movement were lifted, people naturally moved from the internet environment into the shops. Consequently, e-commerce is going through a slowdown as consumers are no more limited only to online shopping. The ongoing war in Ukraine did not fulfill the fears of cooling consumer spending, but on the contrary, it brought a lot of opportunities associated with the influx of new consumers and various brands that show interest in entering our market. As a result, this meant increased turnover for several retail establishments compared to the same period before the pandemic.
Office sector went through a major change as reclassification of office buildings took place. One of the causes of this was the separation of the most cutting-edge buildings into the newly established category. Lack of current up-to-date standards was another issue addressed in the reclassification process since attitudes toward ESG and technology advancement have not been taken into account. We recorded an unchanged vacancy rate of 11.8%. However, fewer completions and persisting volumes of leasing activity on the market could even reduce the vacancy in the second half of 2022. Read More...
