In addition to its expansion measures in Austria and Germany, conwert Immobilien Invest AG is pressing ahead with its growth activities in the neighboring CEE countries: conwert is reaching out to tap a new market in Slovakia. Investments, which have previously focused on the development of older properties, will increasingly be geared towards the creation of new residential properties in future.
In total, investments of around €110 million are planned for the CEE states by 2009. conwert will be revitalising or building around 1,200 apartments covering approximately 104,000 m². Around €43 million of the investment volume will relate to rented apartments, while apartments that will be sold after completion account for roughly €67 million of the total volume.
In Slovakia, real estate projects with a volume of around €29 million are being implemented in Bratislava and Zilina. conwert is planning investments of €81 million at its current CEE locations in the Czech Republic and Hungary by the end of 2009.
Maturing process feeding demand for high-quality apartments
The residential real estate market in the Czech Republic, Slovakia and Hungary has undergone a maturing process in recent years and is now offering attractive investment prospects. conwert is leveraging this potential on both the rental and the freehold residential property market, whereby the economic catch-up process has led to a tangible rise in demand in the high-quality apartment sector in particular.
"The market for high-quality apartments in good locations has become considerably broader, and hence more interesting, as a result of the rise in spending power. Naturally, the freehold apartment market, which is traditionally strong in these countries, is benefiting from this development. At the same time, the concept of renting instead of owning is becoming increasingly important, particularly for young people and business people who want to maintain their flexibility," commented Johann Kowar, Chairman of conwert's Management Board, on what he described as an ideal market environment and the formation of a professionally developed market for rental apartments.
Entering the Slovakian market
Having already operated successfully in the areas of older building development and the construction of new residential property in the CEE states of the Czech Republic and Hungary, the Company is now focusing on Slovakia as its third CEE market. A strong economic performance and the settlement of international businesses are generating increased demand for modern living space in line with Western standards. Various studies have confirmed the high growth potential of Bratislava combined with low levels of investment risk.
"conwert is taking advantage of this opportunity to position itself as a leading provider of high-quality residential property in Bratislava, as well as the up-and-coming economic area of Zilina," observed Kowar. In the next two years, conwert will invest a total of €29 million in Slovakia. While 152 apartments comprising total space of 16,900 m² are being constructed for sale in Bratislava and the classy suburb of Zahorska Bystrica, 202 rental apartments covering 11,000 m² are being built in Zilina.
Expansion of existing CEE locations
Over the next 24 months, total investments of €80 million will be made at the Company's current locations in the Czech Republic and Hungary: In the Czech Republic, 319 freehold apartments covering 24,731 m² and 40 rental apartments of 3,170 m² are under construction. In Budapest, 473 apartments intended for sale comprising a total area of 39,800 m² are under development.
In Brno and Pilsen, the residential property portfolio that previously primarily consisted of renovated older buildings is being expanded to include newly constructed residential properties. "In contrast, in Budapest, where we used to focus exclusively on building new apartments, we are now embarking on our first attic renovations in our core 'L