Bratislava City Report, Q3 2012

Report Summary:

ECONOMY/INVESTMENT

Slovak Economy: Although Slovakia faces some current financial risks, the country is seen as one of the healthiest economies in Emerging Europe. Despite its high export dependence, the country has so far managed to avoid a significant deterioration amid the ongoing Eurozone debt crisis. Indeed, data for the first part of 2012 indicated that Slovak industry and exports have continued to hold up remarkably well, despite some unevenness from month to month. This success is partly thanks to Slovakia’s reliance on Germany as a key trading partner. Economic risks relate to the country’s ability to sustain more balanced regional development, while keeping public finances under control.

OFFICE MARKET

Supply: As at the end of Q3 2012, the total office stock in Bratislava stood at 1,508 million m2. Of the existing stock, 60% are A class properties, the remaining 40% are B class. There were three new projects added to the market during this quarter – Reding Tower II (7,000 m2), Digital Park III (19,800 m2) and the first green office building Bratislava Business Center 1 Plus (14,600 m2), which is a significant increase in the amount of new supply in comparison with the two previous quarters, when only 1 scheme was delivered to the market.

RETAIL MARKET

Supply: During the third quarter of 2012, only smaller retail schemes were added to the market, mainly in the Slovak regional cities. Shopping centre Triada, located in Humenne, opened its doors for customers in September and delivered around 2,000 m2 of lettable area. Kocka (Cube), the Slovak original concept based on the reconstruction of small local shopping centers owned by M-Market, opened three of its unique local shopping centers in Senec, Velky Krtis and Turcianske Teplice. Twelve buildings of uniform design and building character should be delivered within 5 years.

INDUSTRIAL MARKET

Supply: The total industrial stock in Slovakia amounts to 1,160,832 m2. There were four new developments delivered to the market during Q3 (24,500 m2 by Prologis and 12,000 m2 by Karimpol – both in the Bratislava region, 10,000 m2 by Immorent in Kosice and 6,000 m2 by Pointpark in Zilina) and there are still some projects under construction in the Bratislava region. The vacancy rate in Q3 increased to 7.82% in comparison with 4.97% in Q2 2012, mainly due to the delivery of new premises. Almost all new supply in 2012 will be built speculatively.

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