Arete Invest, a Czech rapid-growth fund focussed on real estate investment, plans to invest about EUR 30 million in Slovakia in 2018. It is considering new developments in industrial zones which it already owns, as well as potential new acquisitions. Arete Invest sees immense potential in the Slovak market.
Arete Invest will invest EUR 30 million on the Slovak market, and the amount may yet change. “The Slovak market is advantageous for us for several reasons: stable economy, openness, European Union, standard legal process, and a similar mentality,” says Lubor Svoboda, co-founder and member of the administrative board of the Arete Invest fund.
According to Mr Svoboda, studies have shown that there is less competition and most certainly higher pressure on demand for industrial properties in Slovakia than in the Czech Republic. Arete Invest is considering investing into two areas. Firstly, new construction at the compounds which it already owns, which would also lead to the creation of new job positions. Arete has also pinpointed certain investment opportunities and is in negotiation with parties on the purchase of new acquisition opportunities, which are already standing and generating revenue. “It will most likely be a matter of new acquisition, which we are currently negotiation,” discloses Mr Svoboda.
“We are creating new production capacities, new job positions. We can also offer interesting investment opportunities for Slovak investors, who are seeking above-standard returns of up to 11% with ongoing investment pay-out, for investors who are looking to distribute risk into real estate not only in Slovakia, but also within the Czech Republic,” adds Mr Svoboda.
At present, Arete owns two class A facilities in Slovakia: an industrial compound very close to the Kia automobile factory near Žilina, which is completely leased to the automobile component supplier Grupo Antolin; and the second industrial and logistics compound Arete Park Nové Mesto, which is located near Nové Mesto nad Váhom and which includes other lots designated for building development.
The National Bank of Slovakia also assesses the development of commercial property as positive. “Industry and the commercial real estate sector have seen a rapid growth of loans, with their year-on-year dynamic attaching 15% in the first quarter of 2017. This development further increases the importance of these sectors, in particular the sector of commercial property,” states the central bank in its Financial Stability Report.
Demand for office space and logistics centres is supported by the good performance of the corporate sector. “Based on rising trends in the commercial real estate sector, the growth of prices for commercial properties has continued, impacting the decline in profit from investments into this sector. However, investments into commercial real estate still offer interesting revenues and are an attractive opportunity for investors. The volume of investments in 2016 far exceeded the historical maximum from the pre-crisis period, and based on current trends, continued investment activity may be expected in the forthcoming period,” forecasts the National Bank of Slovakia.
