Bratislava office market emerging from stagnation with 168,000m² in pipeline (SK)

|© JLL

After a significant period of inactivity the Bratislava office market is turning a corner with the imminent delivery of over 160,000m² of commercial space, according to a new report from JLL Slovakia.

 

Throughout 2015 the total area of office space in Slovakia’s capital has continued to hold steady at 1.54 million m², with no addition to the Bratislava office stock during the third quarter of 2015. This period of inactivity through the whole year 2015 reflects the recurring trend of 2014 that without pre-leased tenants almost no developer will start the actual construction.

 

However, change is afoot with a number of office projects currently under construction. Properties include – Twin City (HB Reavis), Stein (YIT), Panorama BC II (J&T), Blumental (Corwin Capital), Zuckermandel (J&T Real Estate), Rosum (Penta Investments), Uniq (Cresco). The anticipated completion of these projects will bring more than 168,000m² of new office space in the Slovak Capital. By the end of 2015, the first phase of Twin City is expected to be completed (with permit to use) which will add another 16.000m² to the market.

 

Meanwhile, leasing activity on existing properties in Q3 2015 was almost equally divided between new leases and renegotiations, following H1 2015 which was mostly dominated by new leases (Q1 – 71% and Q2 – 82% out of gross take-up). The total volume of closed transactions in Q3 including renegotiations (gross take-up) reached approximately 62,650m2. Compared to the previous quarter (Q2 2015) overall activity increased by 41%, with net take-up totalling approximately 34,000m². Almost 87% of all transactions in Q3 2015 was concluded in Bratislava II and Bratislava III district.

 

Whilst overall leasing activity has shown increase from quarter to quarter by approximately 40% (Q1–Q2 = 42% and Q2–Q3 = 41%) end year results are expected to be behind 2014 figures with over 80.000m² of gross take-up required – something JLL predicted unlikely to happen.

Dalibor Surový, head of office agency at JLL Slovakia, said: “We expect a lot of new projects to be placed on the market in near future and we also anticipate interesting race for new tenants among new projects and old buildings. In general, older buildings without any investment in reconstruction and modernization, simply cannot keep up with newly constructed office schemes which are not only more modern and attractive but also more efficient thanks to newer technology.”

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