SWEDEN - Swedish bank SEB last week acquired the €37m Europeum Business Centre in Bratislava amid wider positive forecasts for the Slovakian market.
The seven-storey building, for SEB’s ImmoPortfolio Target Return Fund, was built in 2004 and is centrally located with transport links to Prague, Budapest and Vienna.
SEB identified its key reasons for the acquisition as the "balanced" lease structure and projected annual rental of €2.1m, because they offer long-term stable income with opportunities for rental increases.
According to Matthew Montagu-Pollock, publisher of the Global Property Guide, Slovakia is seen as the most attractive of Europe’s high-yielding housing markets – largely because of price rises in rival markets such as Estonia, which has seen house prices rise 246% in the past five years.
In addition, Slovakian rental income tax is relatively low, with no capital gains tax on long-term property holdings and low round-trip transaction costs.
House prices in the Baltics "are likely to rise more slowly than in the past", he said, with moderate yields and – in contrast to neighbouring Latvia, Lithuania and Estonia – regulators discouraging house price inflation.
"Slovakia was very lucky with its previous government, which had vigour and principles. It is much less lucky with its present government. How much damage they will do I do not know, but we are hoping that good sense will prevail and that they will not mess everything up," Montagu-Pollock told IPE Real Estate.
The fast-growing Slovakian economy is largely attributable to its capital city, which accounts for around 25% of GDP and half of foreign direct investment inflows.
" The flow of investment money into the country suggests that economic growth will continue strong and reform will remain on track," he said.
