Report | Intelligent Investment

Slovakia Real Estate Market Outlook 2024

February 7, 2024 14 Minute Read

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Macroeconomics

The 2024 economic outlook for Slovakia is brighter, but still cautious due to higher interest rates. Risks include geopolitical concerns and ongoing inflation. Expectations are positive mainly for the second half of the year.

 

Investment

Anticipated improvement in interest rates is expected to boost investment activity in the second half of 2024. Better capital market conditions will create favorable opportunities for transactions. However, the recovery is expected to be gradual, as the financing environment is projected to remain tight.

 

Office

In 2024, we expect a gradual decrease in vacancy rates, largely due to the low construction of new projects. Rental activity should remain stable, with an anticipated increase in rent driven by inflation. We also anticipate a higher proportion of people physically in offices, which has been confirmed last years since the beginning of the pandemic.

 

Industrial & Logistics

The record leasing activity of 2022 was surpassed when more than 800,000 sq m of industrial and logistical space was leased during 2023 in Slovakia. However, in terms of take-up, it was a slightly weaker year. In 2024, we expect demand to slightly cool down after two years of robust activity. We anticipate that after this period of double-digit growth, the headline rent in 2024 should continue to increase, but at a much slower pace.

 

Retail

The combination of lower inflation and increasing real wages is expected to enhance consumer fundamentals, consequently positively impacting retail sales. While e-commerce is projected to continue its growth, it is anticipated to do so at a more moderate pace.

 

Sustainability

Surveys examining the adoption of ESG principles reveal that the primary driver behind the implementation is safeguarding the present and future values of properties and our broader environment. There's a growing emphasis on meeting the objectives outlined in international agreements, with 2024 anticipated to see even greater dedication to these goals.

 

Living

The year 2023 was primarily affected by the increase in interest rates, resulting in low sales of new apartments. The supply of apartments remained at the same level throughout 2023 as it was at the end of 2022. We anticipate that the lower sales of apartments will lead to higher demand for rentals, which is expected to slightly increase in 2024.