Slovakia: The logistics real estate market is doing well

FM newsroom – logistics facility. The logistics real estate market remains dynamic on the supply and demand side. This follows from the market analysis of Alfa Group, according to which the best locations for logistics real estate in Slovakia are in and around the capital. Alfa also claims that the sustainable operation of buildings is increasingly important.

Key logistics

“Although the number of new leases across the country decreased only minimally on average, the occupancy of warehouses in or near the capital did not deteriorate. For example in the case of Alfa Group it is consistently above 95 percent,”- the real estate group told, adding that logistics is an area where interest in investments has not decreased.

According to Ohad Epschtein, Managing Partner at Alfa Group International, this is proven by the fact that the group planned contracts by the end of the year. “The same can be observed with other investors, while with the current decrease in total volume, the focus of the construction industry is shifting to logistics and energy renewal,” he said.

However, new buildings and planned projects are stagnating. “The price of new construction depends on labor and material costs, so it is forced to rise against the will of investors, while interest rates on loans discourage buyers.”- Epchstein pointed out.

Energy aspect

According to the real estate group, energy renewal is a particularly important aspect of the realty market. There appears to be a persistent gap between sustainable buildings with minimal overhead costs to operate and less energy efficient buildings – across all segments. The group also noted that the importance of cost-effectiveness manifests itself mainly in the market for office and warehouse space.

Other buyers – investment and those paying in cash – spend money almost exclusively on modern energy properties and take advantage of the current market situation, which is favorable for them, the investment group assessed.

“However, those who also use the loan tend to make compromises in terms of energy efficiency and buy a less modern, worse condition property for the same price, claiming that the property can be heated, but it is not very possible to expand it. However, this is a flawed approach, as this gap will continue to widen, leading to a loss of value, while the cost of energy recovery continues to rise,” – stressed Epschtein.


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