In its first move into smaller, tertiary cities in Slovakia, GE Commercial Real Estate has closed on a new shopping center in Trnava, for €14.2 million from the developers Euromax and SlovakiaMax, a 100% equity deal. GE also contracted to buy new centers in Poprad and Trencin, both expected to close soon.
The Trnava max center, comprising 10,000 m², is anchored by Billa, an Austrian supermarket chain, and includes a multiplex cinema and 65 stores. The Poprad and Trencin centers are both achored by Hypernova Supermarkets, which are operated by Ahold. "With our experience in Slovakia, we feel very comfortable buying in tertiary cities," Karim Habra (pictured), managing director, GE Real Estate Central Europe, told CPN. "We like these cities because their retail pipeline is not large, giving us limited competition. In the smaller centers the key for us is the supermarket anchor, which gives us additional security. And, Slovakia is perhaps the most dynamic economy in Central Europe and more outside retailers are moving in." Habra pointed out that in a tertiary city, "we also get a nice premium in the yield." Initial yields in Slovakia are moving downward very quickly. For prime shopping centers and office buildings in Bratislava, the cap rate is 7%. In secondary cities, the yield is more than 8 percent. The three max centers are the only modern shopping centers in their respective cities, Habra noted. "They are all located in midtown in the midst of residential areas. We plan to contract for more Max centers from the developers."