REPORT ON THE SLOVENIAN COMMERCIAL REAL ESTATE MARKET 2017

Transcription

1 REPORT ON THE SLOVENIAN COMMERCIAL REAL ESTATE MARKET

2 MACROECONOMIC OVERVIEW Economic Growth In, Slovenia recorded high 5% economic growth. After the IMAD spring forecast, the high and broad-based economic growth will continue in 2018 as well as in 2019, but in a slightly smaller extent. Key reasons of further high growth will continue to be: High growth of export, which is the result of improved competitiveness, Growth of domestic private consumption, Continuation of investments, also in construction, and Favourable conditions in the international environment Employment The growth of employment at the labour market will continue and will gradually start decelerating in the next year. Wage growth will continue in the frameworks of the foreseen growth of productivity. Wage growth will increase in the public sector according to negotiations between trade unions and government. Inflation Inflation will remain on a relatively low level, this will mainly be due to the relatively low prices of commodity. (Source: IMAD, Spring Forecast) In the Value of construction works of non-residential or commercial buildings has increased by 21.7%. Further growth might also be expected in the future, since the issued building permits per square meter of non-residential buildings have strongly increased over the last three years. (Source: Statistical Office of the Republic of Slovenia) Interest rates remain on a record low level. Fixed interest rates for new loans over 1 mio given to legal entities in, amounted from 1.0% to 2.3%, depending on maturity and collateral. (Source: Bank of Slovenia) Value of performed Issued building permits construction works 63.0% 21.7% 38.2% 9.9% -2.9% -7.4% -30.9% 9.7% 3.1% 9.7% 2.3% GDP, real growth 3.1% Unemployment 9.0% 0.2% -0.5% 3.9% 8.1% Inflation 0.5% Interest rates 2.6% 5.0% 5.1% 6.6% forecast % forecast % 1.8% 2.1% forecast %

3 RENTAL 1 st quart. OFFICE MARKET 2 nd quart. 3 rd quart. 4 th quart. LEASE By far the most concluded deals were in the segment of leasing offices spaces in. There were 933 of such deals concluded or recorded in and the leased surface was equivalent to m2 or 133 m2 per concluded deal. In the number of transactions in this segment was seven times lower compared to, and fifteen times lower according to the leased surface. The average rent of office spaces in amounts to 10/m2 and the average rent in is around 6/m2. In, the offer exceeds the actual demand since the average listed office surface ( m2) in exceeded the annual actual leased surface ( m2) by two times, and in even by three times. In, we noticed an increased demand for modern and energy efficient office spaces with parking lots. Vacancy rates in such buildings are below 5%. The opposite applies to older and energy inefficient buildings. Therefore the vacancy rate is high (approx. 20%) due to oversupply. The table below shows significant rental deals: there were no major leases of office spaces in. Furthermore in there were some major leasing deals over thousand square meters at the price of around 11 /m2 (without operating costs). The largest rental deal in was recorded in the building Slovenijales in Dunajska street 22, sized over m2. Demand for modern office space in remains high and will possibly be even higher in the following years due to insufficient supply. Total 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Number of rental deals number Average rent /m2/mon Surface of rental deals in total m Deals for an indefinite period % 23% 27% 19% 20% 22% 52% 56% 68% 69% 60% Average period of rental months Number of listings number No data Average listed rent /m2/mon No data Listed surface in total m No data Monthly Calculation rent surface [ ] [m2] Monthly rent [ /m2] Total Izbrane Selected transakcije transactions Date City of deal Dunajska cesta 160 LJ 42, No Dunajska cesta 22 LJ 82, No Letališka cesta 29B LJ 62, No Gregorčičreva ulica 15 MB 2, No Oper. costs

4 Yield Estimate : 8-9% : 9-10% OFFICE MARKET 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total Number of sales deals number Average sales price /m2 1,080 1,370 1,750 1,230 1, Surface of sales deals in total m Turnover mio Number of listings number No data Average listed price /m2 1,320 1,310 1,280 1,370 1,320 No data Listed surface in total m No data Value of listed sales mio No data In there were almost 70 million euros sales of office space in, which is 12 times as high as in the same period in, and even 4 times higher according to the surface. The average sale price of office space was 1,380 in and in 430 per m2. It is thereby necessary to emphasize that some major individual deals have had a strong affect on average values (see table below). In sales, the quantity of listed office spaces ( m2) is approximately twice as high as the year-round annual take up ( m2), similar as in rental deals. There were some major transactions in the previous year: by far the biggest deal was the sale of the administrative building at Davčna street 1, for the price of 25 million euros or /m2. The building was bought by the state owned D.S.U. (Property Management and Consultancy) from the company PRO REM in liquidation. The biggest transaction in also took place between government agencies: D.S.U. sold the court building for 3.1 million euros to the Republic of Slovenia. The only newly planned business-residential building is Šumi center, of which construction should begin in the first half of Construction of m2 modern office surfaces is foreseen in this centre. The beginning of construction for Emonika ( m2) is yet unknown and has already been postponed several times. Furthermore the initially planned project of the office building City Tower ( m2) would turn into a hotel. Selected Izbrane transakcije transactions Contractual price [ ] Calculation surface [m2] Price per surface [ /m2] Date of deal City Zaloška cesta 1 LJ 1,800, , Davčna ulica (FARS) LJ 25,000, , Štefanova ulica 5 LJ 500, , Slovenčeva ulica 22 LJ 3,905, , Ptujska cesta 95 MB 316, Cafova ulica 1 (Court) MB 3,117, Tyrševa ulica 15 MB 309,

5 RETAIL MARKET LEASE RENTAL 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total Number of rental deals number Average rent /m2/mon Surface of rental deals in total m Deals for an indefinite period % 50% 38% 75% 72% 61% 0% 71% 33% 40% 42% Average period of rental months Number of listings number No data Average listed rent /m2/mon No data Listed surface in total m No data Most of rental deals of retail space are concluded in bigger shopping centres. Rents in these are as a general rule significantly higher than rents on other locations. In s shopping centres the rents depend on the size of the rented unit, and retail premise reach the price of over 100 /m2 for smaller lots. In shopping centre BTC in Hala A the typical rents range between 7 and 20 /m2. Similar conditions apply in shopping centres in. Very high prices are expectedly reached on selected locations in the city centre ( high street ). Top locations are typically not advertised, therefore the average listed rents (on less interesting locations) are lower than average realised rents. The statistics of recorded rental deals is therefore difficult to compare with the statistics of listings. Despite the general belief that Slovenia has too many commercial surfaces, it is impossible to rent or purchase bar and retail premises on best spots without waiting for several months. Izbrane Selected transakcije transactions Monthly Calculation Monthly rent surface rent Date Oper. City [ ] [m2] [ /m2] of deal. costs - Mercator Center Šiška - 5 deals LJ No - BTC Hala A - 25 deals LJ No Kristalna palača, Ameriška ulica 8 LJ 7, No Čopova ulica 7 LJ 17, Yes - Mercator Center Tabor - 3 deals MB No OBI, Tržaška cesta 65 MB 7, No Mercator, Tržaška cesta 14 MB 7, No Tržaška cesta 2 MB 4, No

6 RETAIL MARKET 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total Number of sales deals number Average sale price /m2 1,080 1,250 1,970 1,680 1, , Surface of sales deals in total m Turnover mio Number of listings number No data Average listed price /m2 1,830 2,070 1,950 2,040 1,970 No data Listed surface in total m No data Value of listed sales mio No data Sales of retail premises are very low. The recorded transactions of retail premise sales in the centre of stand out at the sale price of over 7.000/m2 at Mestni trg and on Miklošičeva street at the price of /m2. Retail spaces at less attractive locations are priced significantly lower. The largest recorded sales transaction (bankruptcy auction) of the vacant commercial property in was the sale of the former Merkur shopping centre sized m2, which will not serve for retail purposes in the future. The expansion and construction of the following retail facilities is planned in in the year 2018: Shopping centre SES - Spar next to Celovška street in Šiška with m2 retail space. Expansion of the shopping centre Supernova Rudnik for m2 of gross area. Furniture centre Ikea BTC m2. Furthermore, the construction dates of some major shopping centres in Stožice ( m2) and Emonika ( m2 of retail and office surfaces) have not yet been specified. Yield Estimate : 8-9% : 9-10% Selected Izbrane transakcije transactions Contractual Calculation price surface [ ] [m2] Price per surface [ /m2] Date of deal City Mestni trg 8 LJ 390, , Rožna dolina, Cesta IX 17 LJ 1,000, , Mestni trg 15 LJ 350, , Miklošičeva cesta 14 LJ 870, , Šmartinska cesta 145 LJ 1,669, , Former Merkur, Trebušakova ulica 5 MB 1,280,

7 INDUSTRIAL & LOGISTICS LEASE RENTAL 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total 4 th quart. 2 nd quart. 3 rd quart. 4 th quart. Total Number of rental deals number Average rent /m2/mon Surface of rental deals in total m Deals for an indefinite period % 20% 32% 15% 15% 21% 3% 10% 14% 44% 13% Average period of rental months Number of listings number No data Average listed rent /m2/mon No data Listed surface in total m No data Rental of industrial premises in ranges between 4 and 6 /m2. In the second quarter stands out the recorded lease of industrial premises in the size of ca m2 on Letališka street 29 at the price of 0.8 /m2. Without considering this transaction, the average rent in would be 5.3/m2. The average size of a leased warehouse in is 500 m2, and in m2. The market of industrial premises is bigger and more active in, the rental prices are significantly lower from the comparable ones in and range between 1.5 and 2.5 /m2. Similar as in office market, we detect a bigger demand for larger modern high-rack warehouse surfaces in. Appropriate offers of such buildings are not on the market. The listings of older industrial premises in is comparable to the listings of other older office spaces: the listed surface ( m2) is two times bigger than the annual actual leased surface ( m2). The situation is different in : the average listed surface is lower than the actual leased annual surface. Lease contracts are mostly concluded for a shorter period of time: in average for two years in, and in the average period of renting warehouse premises is 3,5 years. The share of deals concluded for an indefinite period of time is low. Selected Izbrane transakcije transactions Monthly Calculation Monthly rent surface rent Date Oper. City [ ] [m2] [ /m2] of deal costs Letališka cesta 29 LJ 9, No Središka ulica 21 LJ 9, No Leskoškova cesta 11 LJ 16, No Tržaška cesta 39 MB 5, Yes Ob Železnici MB 20, No Zagrebška cesta MB 8, No Prerodovičeva ulica 44 MB 5, Yes

8 INDUSTRIAL & LOGISTICS 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total 1 st quart. 2 nd quart. 3 rd quart. 4 th quart. Total Number of sales deals number Average sales price /m Surface of sales deals in total m Turnover mio Number of listings number No data Average listed price /m No data Listed surface in total m No data Value of listed sales mio No data Sales of industrial buildings are very low. The recorded sale prices for industrial premises are ca. 580/m2 in and 160/m2 in. The offer strongly exceeds the demand: e.g. continuously there are listings in, but only a few sales are quarterly realised. Predominantly smaller and older surfaces are sold. In in two transactions of older industrial surfaces stand out: in Limbuš, the size of m2 at the price of 130/m2, and in the former TAM ( Automobile Factory), the size of m2 at the price of 210/m2. In the biggest transactions of industrial surfaces did not exceed m2, but the achieved prices were significantly higher. The market of industrial real estates is undeveloped due to the shortage of modern logistical facilities. Owners of bigger facilities typically built facilities for own use, almost never has there been a logistic project developed speculatively for the market. The development of modern and larger logistical premises in are withheld by the shortage of large scale vacant land, high land prices and long procedures for obtaining permits or rezoning. Such activity is therefore increasingly spread and developed in regions outside (e.g. area of Airport Brnik). In 2018, the company Mercator plans the beginning of construction of its new m2 logistical centre in Moste, in. The company Magna began with the construction of a new manufacturing plant in. Major foreign logistic companies and developers continue to search for appropriate opportunities in. Yield Estimate : 9-10% : 10-11% Selected transactions Izbrane transakcije Contractual Calculation price surface [ ] [m2] Price per surface [ /m2] Date of deal City Ptujska ulica LJ 1,267, Glonarjeva ulica LJ 1,488, Cesta k Tamu 33 MB 4,680, Limbuška cesta MB 3,884,

9 SOURCES AND CALCULATION METHODOLOGY: - Recorded deals are summarised according to the record of the real estate market through the application Trgoskop. - All deals are consolidated, incomparable deals are excluded. - Only the transactions on the open market, including the voluntary public auctions, are taken into consideration. - All comparable rental deals are included in rental deals: with and without operating costs, furnished and unfurnished. - All values are without VAT. - Recorded contractual surfaces are taken into consideration. Parking areas, archives, warehouses and other secondary surfaces are adjusted. - Indirect sales of real estates through sale of companies shares are not included (are not the subject of the real estate market record). - Listings for each quarter are summarised by publicly published listings from the web portal - Possible multiple/recurrent advertisements of the same real estate are not excluded. Information, contained in this report, are obtained from sources, which we consider as reliable. RE/MAX Commercial cannot assume responsibility for their regularity. We advise the users of this report to consult experts before taking a decision on the basis of this report. RE/MAX Commercial, part of the world s most productive real estate network, is a leader in the commercial and investment arenas. Whatever the property and whatever the transaction, RE/MAX Commercial delivers a level of awareness, trust and confidence that competitors simply can t match. More than 3,000 RE/MAX Commercial Practitioners work in more than 50 countries and territories. The RE/MAX network includes more than 550 Commercial officers and divisions and closes more than $11 Billion in total commercial volume from over transactions annually. In also a RE/MAX Commercial office has been opened in Slovenia. In Slovenia the RE/MAX team consists of small team of highly experienced professionals and provides, in cooperation with partner RE/MAX Commercial agents, a wide range of commercial real estate services. OUR SERVICES: Buyer Representation Seller Representation Tenant Representation Landlord Representation Corporate Advisory Real estate valuations Restructuring Business Brokerage Property Management Market research Copyright RE/MAX Commercial, RMC d.o.o All rights reserved. Use or reproduction without the approval of RE/MAX Commercial RMC d.o.o. is not permitted. All content, published in the report, is in the ownership of the company RE/MAX Commercial, RMC d.o.o. and is the subject of copyright protection and other forms of protecting intellectual property in the legally approved framework. All reproduction or samples of the content of this report must also keep the indicated labelling of copyrights, other notifications of intellectual property rights or notifications regarding other rights ( 2018 RE/MAX Commercial RMC d.o.o All rights reserved).