Slovakia Real Estate Industry Update Quarter 3 2012

  • June 2014
  • -
  • Business Monitor International
  • -
  • 60 pages

Includes 3 FREE quarterly updates

The Slovakia Real Estate report examines the Commercial Office, Retail and Industrial sectors throughout the country in the context of a industry stymied by regional weakness.
With a focus on the principal cities of Bratislave, Kosice, and Trencin, the report covers the rental industry performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate industry, while minimising investment risk and exploring the impact of regional dynamics on a industry ,which looks set to comparatively outperform its peers. Investor sentiment, the business environment and infrastructure are also explored. Rents for commercial real estate in Slovakia generally rose in H111. Businesses pushed Slovakia's commercial property segment into a recovery in 2010 and this continued in 2011, as vacancy rates fell and supply stood still. Nevertheless, full-year 2011 data reveals that all is not yet rosy with only the industrial sector seeing a positive yearon- year (y-o-y) performance. Key factors for 2012 that will dictate the performance of the segment are the economic situation both regionally and domestically, political stability and the fate of the construction segment .
Key Points - We continue to expect Slovakia's economy to grow by 1.5% in real terms in 2012, with growth largely driven by exports and investment. We expect household consumption to recover marginally, though only towards the end of the year when the effects of fiscal austerity measures wane and the labour industry improves.
- Risks of fiscal slippage remain high, particularly given the election of a Smer-SD majority government. While we believe that the Robert Fico-led administration will broadly respect its fiscal commitments to the eurozone, we expect Slovakia to struggle to hit its targets on its current trajectory. We therefore projection a fiscal deficit of 4.6% of Gross Domestic Product in 2012, before this narrows to 3.3% in 2013.
- We have revised down our real Gross Domestic Product growth projections for 2012 and 2013, which we now projection at 1.5% and 2.3% respectively. Our revision is predicated on our view for the eurozone to contract in real Gross Domestic Product terms by 0.5%, weighing on Slovak exports.
- Downside Risk To Growth Outlook: Slovakia's heavy dependence on the external segment for its economic growth presents a key downside risk to our projections . A significant slowdown in external demand, in particular from Germany, would hit Slovakia's export-led economic recovery.

Table Of Contents

Executive Summary ....... 5
Industry SWOT Analysis ..... 6
Slovakia Real Estate/Construction SWOT........ 6
Slovakia Political Environment and Risk Analysis .... 6
Slovakia Economic Environment and Risk Analysis . 7
Slovakia Business Environment SWOT .. 7
Real Estate Industry Overview .. 8
Market Analysis - Office ........ 12
Rents and Yields ..... 12
Data : Historic Rents - from 2010 to 2011 (EUR per m2/month) ... 12
Data : Net Yield, from 2011 to 2012 (%) ......... 12
Data : Terms of Rental Contract/ Leases - Mid-2011 ....... 12
Supply and Demand ......... 13

Market Projection Scenario ... 13
Data : Projection Rents - (EUR per m2/month) 13
Data : Projection Net Yield, from 2008 to 2016 (%) .... 13
Market Analysis - Retail ........ 14
Rents and Yields ..... 14
Data : Historic Rents - from 2010 to 2011 (EUR per m2/month) ... 14
Data : Net Yield, from 2011 to 2012 (%) ......... 14
Data : Terms of Rental Contract/ Leases - Mid-2011 ....... 14
Supply and Demand ......... 14

Market Projection Scenario ... 15
Data : Projection Rents - (EUR per m2/month) 15
Data : Projection Net Yield, from 2008 to 2016 (%) .... 15
Market Analysis - Industrial .. 16
Rents and Yields ..... 16
Data : Historic Rents - from 2010 to 2011 (EUR per m2/month) ... 16
Data : Net Yield, from 2011 to 2012 (%) ......... 16
Data : Terms of Rental Contract/ Leases - Mid-2011 ....... 16
Supply and Demand ......... 17

Market Projection Scenario ... 18
Data : Projection Rents - (EUR per m2/month) 18
Data : Projection Net Yield, from 2008 to 2016 (%) .... 18
Forecast Scenarios ...... 19
Infrastructure Report .. 19
Data : Slovakia Construction And Infrastructure Market Data . 19
Data : Slovakia Construction And Infrastructure Market Data . 20
Construction and Infrastructure Market Projection Scenario ....... 21

Macroeconomic Data ....... 23
Data : Slovakia - Economic Activity .... 24
Real Estate Risk/Reward Ratings ... 25
Real Estate/Construction Risk/Reward Ratings .. 25
Data : Real Estate/Construction Risk/Reward Ratings (%) ......... 25
Slovakia’s Business Environment.... 25
Data : BMI Business And Operation Risk Ratings ... 26
Institutions ... 27
Data : BMI Legal Framework Rating .. 27
Infrastructure ......... 29
Data : Labour Force Quality ..... 31
Market Outlook ...... 32
Data : Emerging Europe - Annual FDI Inflows ....... 33
Data : Trade And Investment Ratings .. 34
Data : Top Export Destinations . 35
Security Risk 36

Competition Overview ......... 37
Company Profiles ......... 40
Ballymore .... 40
Convergence Capital ....... 41
Cresco Group ........ 42
Metrostav SK ......... 43
Orco Property Group ....... 44
TriGranit...... 45
Euro MAX .... 46
Demographic Data ........ 47
Data : Slovakia's Population By Age Group, 1990-2020 ('000) ... 48
Data : Slovakia's Population By Age Group, 1990-2020 (% of total) .... 49
Data : Slovakia's Key Population Ratios, 1990-2020 ........ 50
Data : Slovakia's Rural And Urban Population, 1990-2020 ........ 50
BMI Methodology ......... 51
How We Generate Our Market Projections .... 51
Construction Market ...... 52
Bank Lending ......... 53
Real Estate/Construction Business Environment Rating .... 53
Data : Weighting Of Indicators . 54
Sources ........ 56

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