link to full pdf report: Report2018.pdf
REPORT ON THE SLOVENIAN COMMERCIAL REAL ESTATE MARKET 2018
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
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 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.
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.
|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|
|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.
|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|
|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.
|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|
|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.
|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|
|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.
|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|
|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.
|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|
|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.
|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