Slovak Industrial Market Overview
Stock & Supply
By the end of the third quartal of 2023, the total modern industrial and logistics stock in Slovakia stood at almost 4.16 mil. sqm. Greater Bratislava (incl. Bratislava city) has the highest share at the level of 44% of total stock, followed by Western Slovakia with 38% share and Central Slovakia with share of almost 10%. The smallest share of stock is recorded Eastern Slovakia (8%).
By the end of Q3 2023, the average vacancy rate was at 1.85% which represents the second lowest number in our history of data collection since 2009. Currently, majority of vacant industrial space within existing logistic parks is located in Greater Bratislava and Eastern Slovakia.
There is almost 263 thousand sqm of new logistic space currently under construction. Approximately 80% out of total under-construction space is already pre-leased.
The developer's decision not to support speculative construction has resulted in vacancy dropping below 2%. Due to a growing shortage of industrial space in Slovakia, prices are rising. Higher financing rates combined with the cost of new construction are driving up headline rents, which are now reaching up to 5 € per sqm.
In the past 12 months (Q4 2022 – Q3 2023) gross take up in Slovakia reached 681,110 sqm. In Q3 2020 we have recorded gross take up at the level of 187,300 sqm. In last 12 months, approximately 45% of the gross take up was registered in Greater Bratislava & Bratislava city, followed by Western Slovakia with 35%, Central Slovakia with share over 17% and Eastern Slovakia with share almost 3%.
The industrial and logistics asset class in Slovakia remains a promising sector for investment with wider pool of investors currently active compared to office or retail asset class.
Despite continuous interest, there has been no closed transaction since the beginning of the year up to Q3, although a few deals are ongoing, and we expect at least one transaction to close by the end of the year. Other deals are in different phases of transaction processes, hence, and it remains to be seen whether these deals will close throughout next year as sellers and buyers’ different view on pricing remain different.
Forecast for H1 2024
The turbulent period in all sectors has been stabilized. We expect similar growth in warehouse space in H1 2024 as in the first half of 2023. The increase in prices should be more moderate than in 2023.
The forecast for 2024 is slightly positive in terms of the rental of logistics and industrial real estate.