The fact is that in 2022, the largest volume of investment in history was invested in the Slovak real estate market. Therefore, it is not surprising that CBRE experts predicted that investment volumes will decrease in 2023.
"In 2023, a total of 664 million euros were reinvested in Slovakia. Although this is a 41 percent drop year-on-year, Slovakia is still an attractive destination for investors. In addition, neighboring Hungary (-67%), Poland (-65%) and the Czech Republic (-16%) also recorded a decrease in investment volumes," explains Ľubor Procházka, sales director of CBRE Slovakia. He also stated that compared to the last five years, it was an average year in terms of investment volume.
"At the same time, the fact that Slovakia has had the highest volume of investments from domestic investors for a long time is also positive. It was no different even in 2023, and domestic investors took care of 58% of all investments," added Ľubor Procházka. Poland had the fewest domestic investments among the V4 countries, namely only 7%.
The latest data from CBRE also showed which regions in Slovakia were the most attractive for investors. Traditionally, the biggest overinvestment was in the Bratislava Region, up to 72%. It was followed by the Trenčín region (16%), in which investments were made exclusively within the industrial sector. The third most dominant was the Žilina region, which gained 8%, mainly through investments in the office sector.
The demand for industrial space in the regions is growing
In 2023, the rental level within the industrial and logistics sector reached up to 818,000 m2 of rented space.
"This is a year-on-year increase of 12%. Lease contract renegotiations were responsible for approximately one third of the total rental activity. The newly-leased area (the so-called take-up) rose to the level of more than 500 thousand m2," says Michal Cerulík, director of the industrial and logistics real estate leasing department at CBRE Slovakia. He added that the vacancy rate reached a record low level and was 2.64% at the end of the year.
In the year 2023, a long-observed trend, the so-called "nearshoring", was also clearly visible, when the share of manufacturing companies increased significantly at the expense of logistics ones.
"In 2023, manufacturing companies reached up to 54% of the total newly leased area, which represents the highest share in history. Just for the sake of interest, in 2020, when there was a high demand for logistics spaces, the share of manufacturing companies was only 14%," continues Peter Slovák. He added that in terms of newly leased space, CBRE sees a significant increase in leased space in central and eastern Slovakia. The share of these regions was a total of 9% in 2020, while in 2023 it was already 33%.
The highest amount of rent reached the level of €5.75/m2/month, which is 17% more year-on-year.
Predictions of experts for 2024
Experts from CBRE predict that this year investment volumes will again slightly decrease. They estimate their total volume at the level of 400-600 million euros.
"We also expect revenues to remain stable, with investments coming in from investors from the V4 countries. However, we also assume that in 2024 we will again witness an increase in the amount of rent, precisely because of indexation," concludes Ľubor Procházka.
In the area of industrial and logistics real estate, CBRE expects a slight decrease in newly leased space, which was already indicated in 2023. The amount of rent will probably continue to grow, but much more slowly. The production sector should be more dominant, in central and eastern Slovakia we will witness a higher number of new leases.
