Penta sell off to Alto RE drives record H1 as SK yield compression ends

Robert McLean

#cee, #proptech, #development a #architecture

Slovakia’s real estate sector produced a 6-month record breaking volume of deals in 2022, with total investment exceeding €600 million. Marian Fridrich (Cushman & Wakefield) points out that the result is due largely to the transfer of part Penta’s portfolio to Alto Real Estate. That transaction is also behind the heavy office sector emphasis (70%) in the H1 results. Alto RE lists Jurkovičova Tepláreň, Sky Park Offices and Digital Park on its website. A lack of suitable product reduced industrial transactons to just 6% of the total. Cushman & Wakefield notes that Czech and Slovak capital accounted for nearly 70% of the total volume of transactions. The sale of Atrium Optima in Košice to Slovak buyers accounted for €118 million of H1 volume.

Fridrich said Bratislava office yields reached 5% this year, while industrial assets hit 5.25%.  Give the general economic uncertainty, high inflation and rising interest rates, it’s little surprise that C&W says prices for commercial real estate are unlikely to rise significantly. “Due to rising inflation and increasing interest rates, we see very limited room for yet another compression of prime yields,” said Fridrich. “This is one of the reasons why the expected yields decreased in 2022, reaching 5.00% for office buildings and 5.25% for industrial commodities. It has thus reached its historically minimum value.” He said rent indexation could help over the next year.


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