Stock & vacancy evolution in Slovakia
Demand evolution in Slovakia
Demand by sector in Slovakia in H1 2020
The I&L market in Slovakia is concentrated mainly in the Bratislava region (more than half of the stock). Other popular locations include the Western part of the country, which is strategically located and well connected by the D1, D2 and R2 highways.
Regions with emerging popularity include Nitra, the development of which largely relates to the new Jaguar Land Rover production facility.
Increasing interest is also appearing around the city Dunajska Streda (Trnava region), which, being in close proximity to Bratislava, provides a higher availability of land plots with necessary zoning permits, as well as a more favourable labour market situation.
The market is dominated by 5 developers/investors: Prologis, CTP Invest, P3, CNIC Corporation Limited and GLP. Together they control around 61% of the total market share. This share is expected to increase once their pipeline projects are completed.
Supply, demand & vacancy
At the end of June 2020, the total stock of modern industrial space in Slovakia reached 2.64 million m2 , more than half of which (1.4 million m2 ) was located in the capital city - Bratislava.
In the first half of the year, developers in Slovakia delivered ca. 72,000 m2 of new warehouse space to the market. Around 175,900 m2 of additional industrial space was under active construction at the end of June 2020. Most of the ongoing projects were located in the Bratislava (29%), Nitra (27%) and Kosice (19%) regions. Around 51% were speculative developments.
Tenants’ activity in Slovakia during the first six months of the year experienced a downward trend compared to the corresponding period of 2019. The total transaction volume reached 196,700 m2 , while in H1 2019 it was 295,700 m2 .
In the leasing structure, renegotiations and new agreements dominated and constituted 41% and 40% respectively. The remaining transaction activity consisted of expansions. In terms of tenant sectors, the vast majority were companies operating in the distribution sector (97%).
Rental rates & lease conditions
Lease agreements by type in Slovakia in H1 2020
Prime rental rates in Slovakia remain stable and at the end of H1 2020 ranged between EUR 4-4.4/m2 /month in the warehouse sector. In case of logistics and distribution, the rates were a bit lower and accounted to EUR 3.7/m2 /month.
Average lease lengths for logistics and warehousing in Slovakia are 3 years, while for production and manufacturing it is ca. 5 years. Developers offer incentives to tenants which can include 1-2 months of rent-free per year of lease.
I&L landlords in Slovakia are becoming increasingly more focused on the clients’ needs and try to increase the competitiveness of their projects by offering more attractive incentives packages (i.e. longer rent-free periods, higher fit out contributions). We can see the I&L market in Slovakia becoming more and more tenant oriented.
Top 5 lease agreements
|Company name||Region||Park Name||Size (m2)||Sector||Lease Type|
|Confidential Client||Bratislava||Prologis||14,052||Distribution||New lease|