The total volume of commercial real estate transactions in Slovakia in 2020 amounted to €502 million. This is an 27% decrease compared to the previous year, which is due to increased investor caution and, in part, a reduced appetite for retail assets due to uncertainty about the impact of the pandemic on their future development.
Cushman & Wakefield records several transactions started in the second half of the year, which did not manage to close by the end of the year. Almost three quarters of the transactions were carried out in the Bratislava region, followed by the Trnava region with approximately an 9% share of investment activity in the country.
More than 18% of the investment volume were intra-group transactions, i.e. transactions between entities belonging to a common corporate group. Industrial real estate recorded an increased volume of international portfolio transactions.
As much as 49% of the volume of transactions was recorded in the industrial real estate sector, which represents a significant increase compared to an average of 37% between 2016 and 2019. Approximately 37% of the total investment belonged to office real estate (compared to 29% between 2016 and 2019) and only about 11% of the total investment activity was carried out in the retail sector. The remaining 3% of investments belonged to the hospitality sector. As much as 90% of this year's property transactions were closed in the first half of the year.
The largest completed transaction in Slovakia in 2020 was the sale of the Goodman industrial park portfolio in Senec and Košice to the Singaporean GLP fund with global operations, which now ranks fifth among industrial property owners in Slovakia with a total of 167,000 square meters of leasable area. The fund thus joined the five most important companies leasing industrial property, including Prologis, CTP, P3 and the Chinese CNIC. Cushman & Wakefield acted as an advisor to GLP on the buy-side of this transaction, which also covered properties in Poland, Czech Republic and Hungary.
The industrial sector is experiencing a surge in foreign demand, which is currently limited only by the supply of modern, well-located properties that have not yet been sold in previous years. Proof of this is the sale of the Palmira Senec logistics park, which was sold by Palmira Capital Partners / Apollo Global Management into the hands of the Singaporean sovereign fund GIC and represents approximately 127,000 square meters of leasable area. These properties are now managed by P3, which is currently the third biggest industrial player in Slovakia by the volume of areas managed.
The Czech fund REICO, which bought two warehouses in Sereď in the first quarter from the Russian developer PNK Group, also strengthened its position on the Slovak logistics market. The warehouses offer a total of approximately 44,000 square meters and have direct access to the R1 expressway, which feeds into the D1 motorway.
The total volume of transactions in the industrial sector reached over €248 million in 2020, most of which took the form of portfolio transactions.
Significant office transactions this year include the sale of the Rosum building belonging to Penta Real Estate with a total leasable area of more than 22,000 square meters to the German private fund ECE. The building was built in 2016 at the intersection of major city roads on Bajkalská and Ružinovská streets and has a green LEED Gold certification.
Significant office transactions took place not only in Bratislava, as evidenced by the purchase of the BCT-1 business centre (over 17,000 sq m) in Košice by the Slovak group Occam Real Estate from the developer Penta Real Estate.
„The office sector reached a total volume of transactions of €183 million this year, and we expect an increase in investor interest in this segment after the completion of several upcoming projects after their successful lease. At the same time, we also record several larger, pending transactions in this sector at various stages of the transaction process“, said C&W.