Market Trends of Slovak Republic Facility Management Industry
This section covers the major market trends shaping the Slovak Republic Facility Management Market according to our research experts:
Growth in demand of Office and Building Spaces and Leasing Activities
- During the COVID-19 pandemic, the businesses operating in the country were slowed. However, post covid the office market has shown strong year on year growth. The public sector in the country has led to the office demand in Bratislava as a significant rise in new leases supports the trend of occupiers seeking newly built office buildings to relocate. As a result of relocations, the developers are refocusing on leasing second-hand office spaces in the upcoming year.
- Moreover, According to Property Forum, the leasing transactions in offices increased in the fourth quarter of 2021 and reached a total of approx. 98,000 sqm, representing a 124% increase in leasing activity compared to the previous quarter.
- The expansion initiatives of commercial and office buildings in the countries support the growth of facility services in the country. For instance, Eurovea 2 obtained one of the largest real estate loans of Euro 116 million in Slovakia in recent years to construct the extension of the Eurovea shopping center and the adjacent Pribinova X office building.
- Furthermore, one of the largest IT companies has picked New Apollo, which is under construction by HB Reavis in Bratislava's New Nivy zone, for its operation in Slovak and occupies 30,000 sqm of the building. Such initiatives will showcase the demand for a wide range of facility services in the country.
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Commercial End-User is Expected to Hold a Significant Market Share
- According to Property Forum, the total investment in commercial real estate in Slovakia reached EUR 478 million in the first half of 2021, equal to the entire volume of investment during the year 2020, which shows an increase of 6% over the year.
- This is mainly due to increased interest in the retail property segment. The pandemic has also brought increased interest for assets with fewer tenants over longer lease terms to retail investments. These include retail parks and warehouse units, which provide a similar level of risk as industrial warehouses.
- Despite the pandemic, the office sector is gaining investment in modern projects from international investors in the country. Hence, the demand for new office buildings is expected to continue.
- The increasing investment by the international investors in the commercial sector and growth in leasing transactions in the country for office spaces are projected to create demand for soft and hard facility services in the country.
