The construction sector reflects the excellent shape of the economy and is experiencing a boom.
The capital city is the economic heart of the country and here the real estate activities are highly concentrated - new buildings, regenerations and revitalisations projects are changing the city's image.
A new master plan for Bratislava approved last year coordinates and controls the activities aimed at securing steady long-term growth of the city.
Bratislava on the map of real estate players
Bratislava is one of the youngest capital cities in Europe and for many years wasn't on the radar of international real estate players, especially during the 1990s, when their focus was on Czech Republic, Hungary and Poland.
The situation changed when Slovakia joined the EU in 2004 - it was a turning point for the country, which slowly started gaining confidence among investors. Players like Heitman, Rodamco Europe, Axa along with prestigious consulting companies (Colliers, CB Richard Ellis and King Sturge) currently operate in the city.
Slovakia has one of the lowest amount of consumer debt among all CEE countries, but we believe that, on the back of its booming economy, local purchasing power and with it consumer demand will rise dramatically.
That's what is behind the current construction fever - new and modern shopping centres and offices are currently in great demand in Bratislava.
The office market is the most developed real estate sector in the Slovak capital city, but the demand for quality A space is still there. Every new building is occupied in few months after completion and the available office space is expected to double in the next five years.
That's a sign of dynamic business activities, which should be additionally encourage by rising supply and decreasing rental rates. Offices in the historical city centre are the most favoured by tenants.
As for retail premises, Bratislava doesn't have a typical high street with exclusive shops, but instead has several shopping complexes present in almost every mixed-use project in the city and their expansion continues.
The usual pattern of development in emerging markets is that the residential sector will follow after commercial. That is what has happened in Czech Republic or Poland and we don't see any reasons why it can't happen in Slovakia.
New City's Master Plan
The key competitive advantage of Bratislava is the availability of building plots combined with excellent location of the city.
The new Land Use Plan for the city approved in 2007 allocated 3,200 hectares of additional land for the construction of flats, shops, offices and related infrastructure.
The plan identifies Bratislava's needs as a regional centre, capital city and part of the CEE region. It is forecast that by 2030 Bratislava will be home to 550,000 permanent residents (now the official population is 425,000) and around 900,000 people on daily basis.
The plan is not only a basic land development plan and the city's development and appearance, but it is also a key tool for investors.
It attempts to optimise the management of plots, and control supply so the market should not see oversupply. That is really important for such a small capital city. Effectively, then, this could secure steady and sustained price growth.
The land plan defines the directions of the city's developments for established and emerging areas with the emphasis on the latter.
The vision of the local government is to turn the capital city into a modern, competitive and attractive place to live in and to do business in.
Bratislava will develop mainly towards the south in the direction of the Austrian border where development is not restricted by the natural environment.
The inner city areas that will develop include mainly areas where construction was blocked by the possibility of building a metro in the city - plans that have been shelved.
By 2013, a special railway and tram lines will be built as part of the transport network project Paris-Vienna-Bratislava. The new plan also resolves problems of a future bypass around the city for traffic in transit.
The largest of the city's districts, part of Bratislava V - Petrzalka - with almost 120,000 residents, will be converted into a multifunction centre by 2013 called Petrzalka City.
Petrzalka is meant to be transformed from panelak housing estate into attractive, self-sufficient community with all the facilities and amenities in one place.
This project shows that Bratislava is likely to follow the trend present in other CEE main cities, where we can see that apart from the traditional city centre concentrated around the old town, new centre appear.
The new centres are built up mainly around big commercial complexes, which include shops, cinemas, offices, swimming pools, and so on.
City centre regeneration
The city centre in Bratislava is already going through regeneration and transformation and is spreading out toward the Danube.
Former factory sites are being replaced by modern architecture with mixed-used projects.
The revitalisation of the historical centre is being carried out by experienced developers like Ballymore Properties and J&T Real Estate.
Irish developer Ballymore Properties is known for its revitalisation of the London docklands area. Eurovea is their first project in Slovakia. It is going to be a mixed-use international trade centre on the north bank of the Danube and will be finished by 2009. The project is worth €266 million and includes offices, flats, a Sheraton hotel, luxury shopping gallery and leisure and entertainment facilities.
J&T Real Estate is building River Park - situated on the north bank of the Danube, this project consists of over 200 luxury flats, 10,000 sqm of offices and five start hotel Kempinski.
Both projects are aimed to be flagships developments in Bratislava. Similar to Amsterdam or Hamburg, the idea is to link city life closely with the river.
The areas around the central bus and train stations will be transformed by 2009.
Twin City development by HB Reavis Group - a mix of luxury flats, shop and offices will replace the main bus station. It is the most expensive real estate project in the CEE region - 200,000 sqm worth €450 million.
The central train station will be redeveloped by local developer I.P. R. Slovakia into one of the five largest shopping zones in Bratislava.
In Vajnory - part of Bratislava III, the CEPIT Science and Technology Park of Innovative Technologies is being developed. The CEPIT is aimed to support the crossovers between science, education and the economy.
It will serve as a multi purpose research and educational centre, university campus, business park, housing estate with school and service facilities. The first phase is scheduled for completion for 2010.
The currently booming real estate market in Bratislava and the presence of global players is a sign the market is attractive for investors and the demand for modern offices and shopping centres is there. This is clear evidence the market is developing and becoming more sophisticated and the consumers are more demanding.
The new master plan for the capital is a vital element of the city's development in the future.
Availability of land plots is a big attraction for investors involved in construction activities, while control over the use of the land and directions of the city's development secures control over the supply, and reduces the risk of oversupply.
Based on the plan's details, we can see that Bratislava's government is wisely using the construction boom to transform the city in a planned and controlled manner. That will affect not only city's appearance but also quality of life.
This is one of the key reasons why we see Bratislava property as a terrific long term investment.
Popularity of mixed-use projects in Bratislava and creation of new self-sufficient communities around them will impact social and work life of residents. Historical city centre will become primarily tourist area, while other regenerated districts will gain as desirable places to live in.
Improving transport links and keeping attractive image of Bratislava as a competitive location is also one of the ways to encourage business and following to keep steady inflow of migration.
New city's image, especially regeneration of the historical centre is also important for development of the tourism and short-term rental market.