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November '06 News & Development Update Print E-mail
Thursday, 30 November 2006
We have reached a point where some of the first developments we assisted our investors to buy are either completing or nearing completion in the next few months - so we thought we'd give you a brief update.

Having been in the market for some time, we naturally have developed contacts in many different fields of the property industry here. With so many investors inquiring about resale or old property in Bratislava we have allowed one very trusted source to list their best properties on the Slovak Investments site to cater for our clients in that particular market. Please follow this link to our resale/old property section and use the online inquiry form to contact the agent directly.

We also have the latest news on the economy and take brief look at the developments we are currently researching.

News and Economy


The Slovak Statistics Office yesterday released the flash GDP estimate for the third quarter of 2006, which beat all the Slovak banks' expectations - the economy grew by 9.8%!
 
From a monetary point of view, the fundamentals behind this growth means it does not necessary call for a change in policy as the high GDP is a result of high industrial activity, which does not endanger the inflation outlook. Most commentators, including Tatra Bank, are sticking to their estimate of a 25 bps hike in November.

On Tuesday the Slovak koruna reached its strongest-ever level of 35.740 SKK/EUR - UniBanka dealer Tomas Kalavsky said the reason for the firming of the koruna was the positive mood and the strengthening of other currencies in the region. For foreign investors the additional investment return from a 4% per annum average currency appreciation cannot be overlooked, especially when your money is leveraged.

We have seen yet another good year of capital growth in real estate, and according to Knight Frank’s recent European report, eight European countries are inline for 12.5% property price growth in 2007 including the Slovak Republic, Croatia, Cyprus, Estonia, Malta, Poland, Romania, and Turkey.

Commenting on the sustainability of the recent and predicted high growth levels in Central Europe, Knight Frank said it believed “the underlying demographic, economic and financial fundamentals remain healthy, suggesting a hard landing is unlikely. What's more, in some central and southern Europe markets, limited mortgage penetration and strong economic expansion suggest a potential for further boosts in demand.”


Our First Deals Currently Completing


We are in the final stages of managing kitchen installations at the Karloveske Rameno development where we helped a number of our investors buy earlier this year. As i'm sure those of you who have been out here recently to inspect your apartment will confirm, the development is finished to an extremely high standard.

Being the only new development currently gracing the banks of the Danube and taking into account the price we all (my business parter and I included) bought our apartments at - we expect quite a decent rental yield. In fact, I am in the process of securing an 18 month contract for a tenant in my one bed apartment there and am off to Ikea this weekend to buy the furniture!

The Koliba Villas development, which, based on current comparables in the area, has seen value increases of at least 15%, is also coming along very nicely indeed. It was, however, due to complete in two phases; phase1 at the end of 2006 and phase2 in March 2007, but we have been informed that the full occupation license might only be granted for the entire project as a whole in March 2007.

While this situation is not ideal, you will still be able to spend the first couple of months next year finalising kitchens, furnishing and finding tenants. We have already assisted most of you with kitchen ordering and fit-out, so everything should be lined up nicely for March when your tenants move in. As you know, Tomas (Slovak Investment's  Slovak partner) also bought an apartment here, so is monitoring the progress very closely indeed.

 

New Development Opportunities


After another four months of research, in the next few weeks we should finalise negotiations with two developers on what we feel will be the best investment opportunities on the market in Bratislava. One development we are looking at is in Bratislava II's business district - Ruzinov, and the second is a high level housing project on the outskirts of the city where there is much planned in the way of commercial investment, future employers and infrastructure.

There is little point in elaborating at this stage as often we are very excited by a potential project only to find the flaw at the last minute - hence the four month wait! So, please bear with us until we have completed all our research and are sure the deal is good enough for our clients. 

River Park - Coming Soon


River Park


We are still getting a lot of inquiries about River Park - the J&T development that broke ground a few months ago. The developer is still not ready to market their apartments - but rest assured that we will be the first to bring you information when when J&T are ready.

We hope that this update has been useful and we look forward to speaking to investors in the coming weeks about the new developments and to answer any questions you might have regarding property investment in Slovakia.


Kind regards,

The Slovak Investments Team�
 
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