Free WordPress Themes



June 2016

Slovakia has the fastest growing economy in Central Europe and an attractive industrial and retail market, experts claim.

Slovakia is considered a fairly new country in Europe. Its formation in 1993, following its split from Czechoslovakia, has enabled the country to write its own economic growth story. And it’s quite an interesting one. Today, Slovakia is one of the Eurozone’s most financially sound states and popular with foreign investors, particularly car makers.

As the fastest growing economy in Central Europe, Slovakia is considered one of the most attractive investment locations in the CE region. In fact, since its inception in the European Union in 2003, Slovakia has become an established and attractive destination due to the availability of financing, interesting portfolio offerings, favourable market conditions and attractive pricing when compared to other CEE markets.

Despite recent political challenges resulting from Prime Minister Robert Fico’s anti-refugee rhetoric, experts maintain that Slovakia’s economy won’t take a hit and will continue to attract investment.


Following an amicable split with the Czech Republic in 1993, two new countries emerged out of what was then Czechoslovakia; Slovakia and the Czech Republic.

According to a recent report by Oxford Economics, in the aftermath of the split Slovakia struggled in comparison with Czech Republic. But it was under Prime Minister Mikuláš Dzurinda’s regime that a turning point came for the country in 1998. He remained as premier until 2006 and began to implement positive economic changes. According to the report, it was under Dzurinda’s regime that Slovakia began to embrace economic liberalisation and re-engage internationally, joining the Organisation for Economic Co-operation and Development (OECD), NATO and the EU.

“It is only recently that the country has been placed firmly on the convergence path with its richer neighbours – economic reforms mandated by EU accession requirements helped to establish an open, market based economy that enabled Slovakia to take advantage of catch up-potential,” says the Oxford Economics report.

In 2013, GDP per head measured at purchasing power parity is estimated to have stood at 76.5% of the EU average – up from 57.5% in 2004.

Recent economic success has been built on large inflow of FDI. Between 2001 and 2007, net FDI averaged USD 2.8 billion a year (around 7.5% of GDP), according to Oxford Economics. Slovakia’s automotive and electronics sectors benefitted and these sectors continue to dominate the country’s exports.

In 2015, the Slovak economy grew by 3.6 percent, the strongest pace of expansion since 2010. “Slovakia was one of the fastest growing Eurozone countries and although some of the impetus came from a surge of EU funded investment, we believe this is going to continue in the coming years,” says the Oxford report.


Foreign investor appetite for Slovakia is also visible in the real estate sector.

“In 2015/2016 Slovakia recorded the highest investment volumes since the crisis,” says Rudolf Nemec MRICS, Senior Investment Analyst, JLL Slovakia. “Foreign real estate investors are again very active in Slovakia, attracted to higher yields when compared to larger CEE countries,” he adds.

Currently, says Nemec, Slovakia is the only Eurozone member from CE countries with no currency risk and is perceived as the core CEE market among foreign investors, particularly capital from Europe America and Africa.

“We have witnessed that foreign investors are buying successful existing industrial, retail and office schemes, while domestic developers dominate the office and the residential development market. International investors look to industrial players and dominate the warehousing industry,” he says.

Aneta Lendvayova, Head of Valuation at Cushman and Wakefield, agrees saying the real estate market has achieved pre-crisis levels and that international investors are capitalising on the industrial real estate opportunities.

Jaguar Land Rover, as the fourth international car producer present in Slovakia (after Volkswagen, Peugeot and Kia), will open its factory in 2018, “motivating car suppliers to establish their new plants in Slovakia as well,” says Lendvayova.

In terms of retail, JLL claims that there is very strong interest in prime and secondary retail from both local and foreign investors.

Total retail stock comprises approximately 1.6 million sqm. More than 76% of Slovakia’s modern retail space is accounted for by shopping centres, the remainder consisting of retail parks, department stores and other types of retail premises, as per JLL.


According to JLL’s recent Bratislava City Report for Q1 of 2016, most development activity can be found in the industrial and retail sector.

“Several new premises are under construction with a total leasable area of more than 100,000 sqm all located in Greater Bratislava,” says the JLL report.

Nemec of JLL says that PPP projects are the largest developments in the country. Cintra, owned by Ferrovial is one of the largest private developers of transport infrastructure in the world and is most likely going to build new outer city ring highway around Bratislava.

In the commercial real estate market, all three major Slovak developers (HB Reavis, J&T Real Estate and Penta Investments) are heavily involved in developing a new CBD located next to the old city centre and the embankment of the Danube River.

“The new CBD will feature a vast retail scheme from Benoy and residential towers from architect Zaha Hadid, among others. We are also thrilled to follow the evolution of Ellon Musk’s Hyperloop that would connect Bratislava, the Slovak capital, with Vienna, the capital of Austria. The bullet capsule would make the 60 km distance in less than eight minutes, changing the property market and living in these two cities forever,” says Nemec.


The outlook for Slovakia is overwhelmingly positive, despite some downside risks, linked to regional geopolitical tensions and the potential reinstatement of Schengen border checkpoints.

Although, Nemec of JLL is confident that investors are paying close attention to the market and as a result entering and expanding their exposure in the country.

Lendvayova of Cushman and Wakefield agrees. She says that while the positive effects of EU investment funds will fade in 2016, the economy is still forecast to achieve robust growth of 3 percent, as rising wages and low inflation boost private consumption.

“The planned cuts in corporate taxes and increased social spending are expected to go ahead adding further impetus to the economy over the medium term,” Lendvayova says.

Surely these are positive signs for the real estate market going forward.

To stay on top of the latest real estate news, subscribe to Cityscape Magazine.