// Novinky/ 20.02.07

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Financial Times issued a special report

Financial Times issued a special report covering Slovakia and also its capitals' real estate market under a title "Frenzied rush to grab a piece of the Bratislava action".

Quoting the article (short) : "The Bratislava property market is booming after spending the 1990s in the shadow of its more glamorous neighbours, Prague and Budapest. Skyscrapers and shopping centres are sprouting all over the city and instututional investors and even small buy-to-let speculators are rushing to grab a piece of the action.

According to one estimate about half of the prime office space of 700,000 sqm. has been built since 1995 and there are plans to build another 600,000 before 2010. Four shopping malls are also planned, which should triple the current 120,000 sqm. of modern shopping centre space. Despite the surge in supply, valuations have climbed because of strong demand from investors. Yields on prime offices have already almost converged with those of Prague and Budapest at 6 percent, a fall of 2 percentage points since 2004. Retail yields are even lower, at 5 percent, according to Spiller Farmer, the leading local property agency, and residential property has been increasing in value at 10 percent a year, with top-of-the-range houses doubling in price over two years. Ballymore properties of Ireland is investing €250m in the first phase of Eurovea project on the Danube river embankment to build a huge development - including a shopping centre, offices, a Sheraton hotel and luxury flats.

There are fears, however, that too many offices are being built for such a small market. Vacancies are low and average rents are stable at about 11€ per sqm. per month, cheaper than Prague or Budapest but similar to Vienna. However, this is half the level of a decade ago and there remains a question mark over whether the market can absorb all the planned buildings. Laurie Farmer, head of Spiller Farmer, is sanguine, pointing out that there is a shortfall of 60,000 sqm. at the moment and another 50,000 sqm. is needed annually. "If you have the right location you are pretty secure it will be a successful product," he says.
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