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link to full pdf report: Report2018.pdf

 

REPORT ON THE SLOVENIAN COMMERCIAL REAL ESTATE MARKET 2018

 

MACROECONOMIC OVERVIEW

 

 

Economic growth

In the year 2018 Slovenia recorded a high economic growth of 4.1%. According to the UMAR forecast, relatively high economic growth will remain in 2019 and will slow in the coming years.

  • Lower economic growth will mainly result from lower foreign demand and lower export growth.
  • An increase in labour costs is expected
  • Amid the continuation of relatively strong growth in domestic consumption, the growth of imports will ease off more slowly than the growth of exports.
  • Growth is expected for all segments of investment activity,
  • Growth in government consumption is also expected to strengthen

Employment

The growth of employment will  under the impact of demographic change gradually ease - in spite of hiring foreign nationals.

Wage growth will be strengthening in the coming years, reflecting favourable economic developments and the increasingly limited supply of skilled labour.

Stronger wage growth is also expected in the general government sector, with the foreseen relaxation of the remaining cost-containment measures in the area of wages.

 

Inflation

Inflation will exceed the rate of 2% slightly in the next years, mainly owing to oil price rises and a gradual strength-ening of growth in prices of services.

 

Issued building permits

After a record increase in issued building permits in 2016 (based on commercial property surface), the number of issued building permits in 2018 decreased by 7.8%. During the same period of time, the number of issued building permits for residential property increased by 11.8%.

 

Construction services value

In 2018 the value of construction services for non-residential buildings increased significantly by 19.1%. How-ever, due to the decrease of building permits issued in 2018, we can expect lower growth in the value of construction services in the coming years.

 

Interest rates

Average interest rates rose in 2018, but remain at a low level. In the year 2018, fixed interest rates on new loans to corporate entities exceeding EUR 1 million amounted to between 1.7% and 2.5%, depending on loan maturity (1-10 years) and provided collateral.

 

 

 

OFFICE MARKET

 

      Ljubljana  Maribor 
LEASE   2017 2018 2017 2018
RECORDED DEALS          
  Average rent €/m2/month 9,8 10,9 5,9 7,1
  Number of rental deals number 932 830 139 110
  Surface of rental deals in total m2 124.000 87.000 8.100 6.900
  Deals for an infinite period % 22% 25% 60% 52%
  Average period of rental months 17 19 19 23
LISTINGS          
  Averege listed rent €/m2/month 10,2 10,7 9,5 10,2
  Number of listings number 876 662 77 84
  Listed surface in total m2 242.000 199.000 22.000 21.000

 

By far the most rental transactions happen in the office segment. In Ljubljana in 2018 average monthly rents rose by approx. 1 € / m2 or 10%, indicating that prices of commercial real estate follow the price increase of residential real estate. The same trend can be seen in Maribor, where monthly rents of office space in the same period increased by around the same amount of 1 €/ m2.

At the same time in Ljubljana and Maribor, the number of concluded rental transactions is decreasing. The average lease is concluded for a relatively small space - in Ljubljana for approx. 100 m2, and even much less in Maribor. The average period of rental is increasing.

The same trends are can be observed with listings: listed prices increased while the number of listings decreased compared to 2017. Trends are identical in Ljubljana and Maribor.

On average, twice as much office space is listed than annually leased -  indicating an oversupply. However  this is true for older office premises only. In Ljubljana, there is still a lack of modern office space at reasonable prices in well-accessible locations.

 

      Ljubljana  Maribor 
SALES   2017 2018 2017 2018
RECORDED DEALS          
  Average sales price €/m2 1.380 1.390 430 620
  Number of sales deals number 177 127 38 34
  Surface of sales deals in total m2 50.000 35.000 12.800 4.900
  Turnover mio.€ 69,4 47,9 5,6 3,0
LISTINGS          
  Average listed price €/m2 1.340 1.390 670 700
  Number of listings number 247 217 47 49
  Listed surface in total m2 98.000 92.000 20.000 24.000
  Value of listed sales mio.€ 130,6 127,8 13,3 17,0

 

The volume of transactions with office space is substantially lower compared to rentals. Apparently, companies give preference to renting premises before buying. The average size of an office space acquisition in Ljubljana is 280 m2 and is slightly higher than a comparable acquisition in Maribor.

Prices for office space in Ljubljana in 2018 were similar to prices from 2017, while prices in Maribor increased. Turnover with office space declined in both cities.

On the supply side the situation is similar: advertised prices in Ljubljana remain unchanged, in Maribor they are increasing. Office space prices in Maribor are still far behind the price level in Ljubljana.

 

 

 

RETAIL MARKET

 

      Ljubljana  Maribor 
LEASE   2017 2018 2017 2018
RECORDED DEALS          
  Average rent €/m2/month 15,3 14,9 5,7 6,2
  Number of rental deals number 162 129 24 30
  Surface of rental deals in total m2 16.600 18.900 6.200 9.900
  Deals for an infinite period % 61% 47% 42% 60%
  Average period of rental months 25 29 22 32
LISTINGS          
  Averege listed rent €/m2/month 13,0 13,8 6,4 6,2
  Number of listings number 52 57 21 17
  Listed surface in total m2 8.000 9.600 3.400 2.400

 

Based on presented data, the retail property market in Ljubljana seems to be quite stable: the average rents remain unchanged at approx. 15 €/m2. The volume of rental transactions in Ljubljana also remains relatively stable. The volume of new rentals in Maribor, however, is much lower compared to Ljubljana. Statistics for 2018 for Maribor suggest that rents for retail space increased as well as number and volume of transactions. Rents are expected to be the highest for smaller lots in major shopping centres and in the historical old city centre of Ljubljana, which can reach the price of 100, and in Maribor up to a maximum of 50 €/m2.

 

Retail space in less desirable locations which is more difficult to rent is usually advertised more aggressively – this explains why actually realized average rents exceed listed rent prices.

The biggest rent deal in Ljubljana in 2018 was concluded in BTC: 480 m2 were leased for 85 €/m2. The second largest deal was renting 2,300 m2 retail space on Brnčičeva cesta at the price of 7,8 €/m2. In Maribor the most significant deal was a showroom rental on Avtomobilska ulica, size 1,160 m2 at a price over 10 €/m2.

 

      Ljubljana  Maribor 
SALES   2017 2018 2017 2018
RECORDED DEALS          
  Average sales price €/m2 1.500 1.620 330 730
  Number of sales deals number 47 47 13 22
  Surface of sales deals in total m2 5.800 4.200 6.400 2.700
  Turnover mio.€ 8,7 6,8 2,1 2,0
LISTINGS          
  Average listed price €/m2 2.060 2.020 650 830
  Number of listings number 40 38 29 31
  Listed surface in total m2 9.100 6.400 6.600 5.000
  Value of listed sales mio.€ 18,7 13,0 4,3 4,1

 

Sales and listed prices of retail space in Ljubljana remain stable, while in Maribor, due to a low number of transactions, data are less reliable. Major transactions with commercial real estate are not always covered by the subject statistics.

 

The largest recorded transaction in Ljubljana in 2018 was the acquisition of 165 m2 of prime retail space on Cankarjevo nabrežje 1 at a price of 4,800 €/m2 or 790.000 €. No other major acquisitions were recorded. In Maribor, the largest deal was worth € 470,000 - 765m2 of commercial space was acquired on Jadranska cesta.

 

INDUSTRIAL&LOGISTICS

 

      Ljubljana  Maribor 
LEASE   2017 2018 2017 2018
RECORDED DEALS          
  Average rent €/m2/month 3,9 5,2 1,5 1,9
  Number of rental deals number 72 74 63 64
  Surface of rental deals in total m2 35.000 25.000 75.000 81.000
  Deals for an infinite period % 21% 19% 13% 23%
  Average period of rental months 21 16 30 11
LISTINGS          
  Averege listed rent €/m2/month 5,3 5,5 4,0 3,4
  Number of listings number 102 84 16 15
  Listed surface in total m2 72.000 84.000 14.000 14.000

 

Rents increased also for industrial premises. In Ljubljana, rents increased by approx. 0.5 €/m2 or 10%, the same increase is observed in  Maribor. Average rents in Ljubljana remain approx. three times higher than the rent of industrial premises in Maribor.

Similar to the office space segment, total listings of industrial premises decreased in Ljubljana in 2018 and slightly increased in Maribor. Due to a more favourable price level, the rental market for industrial real estate in Maribor remains much larger compared to Ljubljana. The number of transactions in Maribor is unchanged.

 

In 2018 there were no major changes on the supply side: in Ljubljana, the supply of industrial premises continues to exceed demand (three times more industrial areas are listed than rented annually). In Maribor, the situation is reverse: much less industrial real estate is on the market than as annually rented. In Ljubljana, the listed prices remain almost unchanged, while in Maribor the average advertised rent in 2018 is slightly lower. The largest deal in Maribor in 2018 was concluded for an industrial premises on Limbuška road, size 26.700 m2, rented at a price of 0.7 €/m2.

 

      Ljubljana  Maribor 
SALES   2017 2018 2017 2018
RECORDED DEALS          
  Average sales price €/m2 580 540 160 140
  Number of sales deals number 19 23 12 17
  Surface of sales deals in total m2 9.000 33.000 59.000 40.000
  Turnover mio.€ 5,1 18,0 9,6 5,8
LISTINGS          
  Average listed price €/m2 710 900 380 430
  Number of listings number 46 29 21 16
  Listed surface in total m2 32.000 26.000 28.000 18.000
  Value of listed sales mio.€ 22,7 23,6 10,8 7,6

 

The number of transactions with industrial premises is relatively small. In addition not all transactions are recorded, the statistics presented is therefore rather incomplete and less reliable. Statistics shows a moderate decline in prices of industrial premises in Ljubljana, as well as in Maribor. The largest recorded deal in Ljubljana was the acquisition of the industrial complex Mladinska knjiga on the Dunajska cesta in Ljubljana, size 11,900 m2 for approx. 300 €/m2. Transaction volume with industrial premises is probably higher in Maribor compared to Ljubljana, due to a considerably lower price level. However, Ljubljana is still lacking modern logistics facilities.

 

The number of listings of industrial premises declined sharply in 2018, while the average listed prices were higher. This applies to Ljubljana as well as to Maribor, indicating that in 2018, the prices of industrial real estate aligned with the market.

 

LARGEST TRANSACTIONS

 

  Predmet nakupa City Building surface Land surface Seller Buyer Sales price excl. VAT [€] Date
Office Tivoli center Ljubljana 8.000 - VB Nepremičnine KD Skladi 13.000.000 apr.18
  Stekleni dvori - south Ljubljana 8.700 - Centrice KD Skladi 12.700.000 jul.18
  NPU Dimičeva Ljubljana 10.600 - HETA Delta Team 7.300.000 dec.18
  Par of object, Trubarjeva Ljubljana 2.560 - - CGS 6.738.000 okt.18
  Stekleni dvori - North Ljubljana 4.700 - KD Skladi n.a. 5.738.000 apr.18
  Poslovni objekt Miklošičeva Ljubljana 4.400 - AHA Skupina, v steč. Elements Skladi 5.248.000 jan.18
  Nama, Slovenska Ljubljana 1.900 - Republika Slovenija Banka Slovenije 3.800.000 feb.18
Retail Shopping malls 10x Slovenija 109.000 - Mercator Supernova Holding 116.600.000 okt.18
  Shopin malls 3x  Maribor, Krško, Ptuj 22.000 - MID Group Immofinanz AG 90.500.000* nov.18
  Shopping mall - Arcadia Domžale 11.000 - MID Group KD Skladi 16.200.000 okt.18
  Shopping mall Slov. Bistrica 3.385 - CP Nepremičnine Lidl 4.500.000-5.000.000 feb.18
  Shopping mall - Velenjka Velenje 31.000 - WG Projektiranje Erste Bank - dec.18
Industrial & Former Litostroj Ljubljana - 73.000 Litostroj Jeklo (DUTB) LTH Castings/Ulitki 11.500.000 nov.18
logistics Logistic center Goodyear Kranj 17.900 30.800 Immorent Epsilon Mlado 5.200.000 jul.18
  Industrial complex, Celovška Ljubljana 2.800 13.400 A1 nepremičnine Davidov hram 5.030.000 nov.18
  Inidustrial building, Tržaška Ljubljana 8.700 17.000 Semenarna Geoprodukt 4.500.000-5.000.000 okt.18
  Industrial building, Limbuška Maribor 31.000 53.800 Pololes pohištvo,v steč. Gorenje 3.675.000 jun.18
  Mladinska knjiga, Dunajska Ljubljana 11.900 4.900 Elsner Glen 3.650.000 apr.18
  Industrial building, Brnčičeva Ljubljana 5.450 3.400 Nep Trade n.a. 3.494.000 maj.18
  Industrial building Pivka 8.700 32.100 Verde Proizvodnja RZ Pellets 3.178.000 feb.18
Hotels San Simon Resort Izola 406ležišč   Hoteli Bernardin KAD/Modra zavaroval. ca.10.000.000 nov.18
  Hotel, Šumi Ljubljana 151 sob   KD Kvart Brtprule 9.000.000 sep.18
  City Hotel Ljubljana 204 sob   Elephant Group Družini Tatić/Sikima n.p. apr.18
Car parks Car park Šentpeter Ljubljana 472 PM - Reitenburg List Slopark 14.550.000 feb.18
  Car park City Maribor 810 PM - F City GMG Naložbe 4.500.000 jun.18
  Car park Modri Kvadrat Ljubljana 396 PM - Parks 1 Nakamoto investicije n.p. apr.18
Other Marina Portorož Portorož - - DZS Avantura Holding/Glen ca.21.000.000 okt.18
  Arena Bonifika, part of building Koper 7.300 - - n.a. 3.809.000 apr.18
  Golf court Cubo Smlednik 1.800 41.900 Sberbank Cubo Golf 3.739.000 apr.18
  Residential house Golovec Ljubljana 900 3.100 Fizična oseba Fizična oseba 3.142.500 jul.18
Land plots Land plot, Šmartinska Ljubljana - 12.700 Imobilia GBK Kostak 4.130.000 maj.18
  Land plot, business park Brnik Brnik - 57.600 Raiffeisen Leasing Iskra mehanizmi 4.034.000 nov.18
  Land plot, Šmartinska Ljubljana - 6.200 Zavarovalnica Triglav Trgograd 3.771.000 jul.18
  Land plot, Celovških dvorih Ljubljana - 7.000 DUTB Corwin 2.700.000 mar.18
                 
*The price includes 8 malls in Slovenia, Croatio and Serbia with a total area of 68.000m2      
Vir: Trgoskop, Land register, daily press, GURS, internal sources.            

 

In 2018, many large real estate transactions were carried out. The Biggest transactions happened in the retail sector: sale & lease back of 10 Mercator shopping centres by Supernova Holding for the price of 116 million € stands out. Followed by the acquisitions of 8 shopping centres by the Immofinaz Group and the purchase of the Arcadia Shopping Centre by KD Skladi.

Apart from that, in 2018 Slovenian real estate funds headed by KD Skladi were actively investing in several cash generating properties. For the first time IT/Crypto companies appeared in the market – investing their cash surpluses in real estate (Mlado, Brtprule, Nakamoto, ...). Popular in 2018 were also car park acquisitions in Ljubljana and Maribor.

Significant investors were also foreign companies (such as Supernova Holding, Immofinanz, Elements Funds, List Slopark, Corwin, Cubo Golf), which mainly acquired investment property and less undeveloped projects. Acquisitions of undeveloped land by foreign investors were relatively rare.

 

Some companies also purchased real estate (primarily industrial) for their own use , such as LTH Castings / Castings, Geaprodukt, Gorenje, etc.

The largest recorded transaction of a residential unit was the sale of a luxury residential house on Golovec/Ljubljana for over 3 million €.

 

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 the statistics: with and without operating costs, furnished and unfurnished.

-All values are without VAT.

-Recorded „contractual surfaces“ are taken into consideration. In the office market statistics parking areas, archives, warehouses and other secondary surfaces are adjusted (multiplier 0,5).

-Indirect sales of real estates through sale of company shares are not included (are not subject of the real estate market record).

-Listings are summarised from published listings from the property web site www.nepremicnine.net.

-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.

 

LJUBLJANA, MARCH 2019

 

 

link to full pdf report: Report2018.pdf

 

 

 

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