Slovakia Investment Property

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Slovakia Investment Property Newsletter
April 2006 - Issue # 19
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After detailed coverage of Slovakia's and Bratislava's
residential property markets in previous issues, in April
and May we bring you a brief overview of the country's
commercial property - starting this month with the (still)
thriving office market.

And, in case you've missed any of our previous newsletters,
they are available for you here:

www.slovakiainvestmentproperty.com/newsletters.php

In this issue you will find:

1. The Winners & Losers
2. Business Centres or: the Changing Face of Bratislava
3. Bargain in the Heart of Liptov
4. Tell Us What You Think!

===================== FEATURE EDITORIAL =================

1) The Winners & Losers

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The Prime Minister of Slovakia has drawn up a new ski-resort
list: 20 best resorts have received the title "Ski Resort of
International Importance" with a view to the development of
the tourism industry. In the last 5 years many Slovak ski
resorts have made huge investments into new lifts, gondolas,
technical equipment, snow making facilities and infrastructure.

* * *

Russian investors are starting to invest more heavily into
tourism in the High and Low Tatras, buying (and reconstructing)
several medium to large size hotels.

* * *

While Bratislava is (along with Prague) the most prosperous
region in the new EU, the Kosice region in eastern Slovakia
- the country's least developed area - is the second poorest
region in the EU (beaten only by Lubienskie region in Poland).

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2) Business Centres or: the Changing Face of Bratislava

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Since late 1990's Bratislava's commercial property market
has seen a massive boom. While retail and shopping centres
are starting to discover Slovakia's regional capitals, the
office market remains almost exclusively focused on Bratislava.

In spite of last years' fears of possible oversupply, today
Slovakia's largest office and business centre developers
have little doubt of filling their new projects.

The new supply coming onto the market in 2006-7 is likely
to break the 2001 record (83,000 m2 of new office space).

Location, completion timing and rent levels will play an
ever more important role.

Currently there is an estimated 1 million m2 of offices
in the capital (including government buildings), less than
a third of which could (with limitations) be considered
A class. Most of the city's offices - except perhaps the
newest business centres - are classed as B or C.

Although nearly one third of Bratislava's offices are
vacant, the business centres built over last 5 years are
fully occupied. All latest centres, built speculatively
with no pre-contracts, were filled unexpectedly fast.

Increasing supply has resulted in falling rents - down
by 40% over last 4 years. Currently new offices can be
rented at 8-12 euro/m2/month. Older, lower class space
can be had from 5 euro/m2/month.

The only area immune to price wars is the city centre,
due to limited availability of building land. In last
4 years Bratislava I has received only 35,000 m2 of new
offices. Top offices are located in Hviezdoslavovo namestie
including in the Radisson Carlton hotel.

Even lower class, older office space in the city centre
keeps its high occupancy rates, due to attractive location.
Other districts, however, are experiencing high vacancy
in older offices.

The BA market is able to absorb 60-70,000 m2 of new
offices a year. The coming 5 years will test the market,
with 80-100,000 m2 of new space to be completed each year.
Developers are banking on increasing number of companies
to transfer HQs or branches to the Slovak capital.

Bratislava's offices are favourably priced - Vienna's rents
are nearly 50% higher, Warsaw's top rents come to 27 euro/
m2/month, Prague and Budapest to over 20 euro/m2. (Top
rents in Bratislava's city centre are 16 euro/m2/month.)

UPCOMING OFFICE DEVELOPMENTS

Entry zone to the city centre
-------------------------------

* City Business Center I and II *

Slovakia's largest commercial developer, HB Reavis, is
currently building the massive new CBC (39,000 m2 of
office space) along Karadzicova street. Redevelopment
of this boulevard that forms a division between BA I
(city centre) and BA II districts, will give the entry
to the Old Town a long deserved, respectable new face.
The CBC buildings with 8-25 stories will, by 2007, give
this prestigious area a modern cosmopolitan look.

* City Business Center III-V *

After completion of the 1st phase, another 3 buildings
(2 office- and 1 residential block) will be delivered
in 2008. The total area of the CBC I-V complex will
be over 106,000 m2. (Investment: €100 million)

* Karadzicova/Mlynske Nivy development *

On the southern side of Karadzicova street, Opposite the
new CBC blocks and the existing high-rise VUB building,
another 6-story office building (8,000 m2) will be raised.
Similarly to CBC, this slovak-austrian development will
also feature retail space on the ground floor.

* Twin-City (Main Bus Terminal Redevelopment) *

HB Reavis will undertake a €220 million redevelopment of the
main bus terminal Mlynske Nivy, a short walk to the Old Town.
Apart from a new modern terminal there will be additional
office space as well as a hotel and shopping centre (2009).

* Main Rail Station Redevelopment *

By 2008 Bratislava will greet incoming visitors in a fully
redeveloped main train terminal. Part of this € 200 million
investment will be a hotel, retail centre, as well as two
office blocks with 69,730 m2 of space. Works should start
this year and conclude in 2008/9. (Developer: I.P.R. Slovakia)

* Tower 115 *

J&T will, by 2006/7, deliver 32,000 m2 of office in its
28-story 'Tower 115' high-rise, created by €27 million
reconstruction of the old Presscentrum. Its main advantage
is the proximity to 'Zone Pribinova' location of the
planned Ballymore development (Eurovea).

* River Park *

Slovak investor J&T will also offer new offices (29,000 m2)
as part of its ambitious River Park project, along the left
bank of the Danube (districts BA I/IV). Apart from offices
River Park (over € 100 million investment) will comprise a
255 room hotel and 400 top end apartments. (2008-10)

* Eurovea *

Irish investor Ballymore Properties will develop part of the
left Danube bank known as Zone Pribinova (border of BA I/II).
This vast chemical wasteland area will be transformed into
office blocks (23,000 m2), hotel, top end apartments, retail.
230,000 m2 will be developed in phases (compl. 2009-2011).

City centre (Bratislava I)
--------------------------

While the largest activity will be centred around the main
bus terminal Mlynske Nivy, just outside the city centre,
the Old Town district will also see several (re)developments
of offices. These will, due to central location, belong to
the most-sought after and expensive offices in the capital.

* Pressburg Trade Center *

On Sturova ulica, in the heart of the city centre, 12,000 m2
of A class offices will be delivered in late 2006 by Austrian
Soravia Group - by reconstruction of a historic building.

* Park One *

On Kollarovo nam. (square), near the Crowne Plaza hotel and
the Presidential Palace, a 9-story glass & steel block will
be completed by mid 2007, by Convergence Capital. Offering
12,625 m2 of offices as well as retail space and restaurants.

* Astoria Palace *

Local developer I.P.R. Slovakia will build the € 8.2 million
Astoria Palace building on the prestigious Hodzovo nam. (sq.)
near the Presidential Palace. Ground floor will offer retail,
with offices on the remaining 7 floors, totalling 5,100 m2.

Bratislava II district
----------------------

* Apollo Business Center II *

Following its successful Apollo BC, HB Reavis will, in 2008,
deliver Apollo BC II, with 8 buildings (8-17 stories, total
site area 140,000 m2) and 75,000 m2 of rentable office space.

* Bratislava Business Center VI *

Israeli investor B.S.R. will offer additional 12,000 m2 of
offices in its latest business centre on Plynarenska ulica.

* Rozadol *

Part of the prestigious Rozadol residential complex (Nivy
area) a 6,700 m2 office block will be delivered in late 2006.

Bratislava III district
-----------------------

In BA III, on Roznavska/Tomasikova street, one of the few
non-speculative office buildings will complete this year:
HQs of Slovenska Sporitelna (the country's largest bank).

Lakeside Park

TriGranit is planning to build an office complex near
Kuchajda lake, with approx. 80,000 m2 of offices.

Bratislava V - Petrzalka
------------------------

* Digital Park *

Petrzalka will also see its first office development. Digital
Park, a czech-slovak investment, will this year (phase I) offer
12,000 m2 of new offices opposite to the Aupark shopping mall.
Once completed, Digital Park will have 40,000 m2 of offices.

* Aupark Tower *

On the right bank of the Danube, the Aupark mall will get an
addition in the form of a high-rise office block (29,300 m2)
built by HB Reavis. Completion is expected in late 2007.

LARGEST COMPLETED OFFICE DEVELOPMENTS
-------------------------------------

* Bratislava Business Center I, II, III, IV *

A complex of business centres built in 1995-1999 in the Nivy
area (BA II) with over 33,000 m2 of office space (HB Reavis)

* Bratislava Business Center V *

BBC V joined its 4 predecessors with 30,625 m2 of offices
over 13 floors. (Developer: B.S.R. Group)

* Apollo Business Center *

The largest business centre in Slovakia to date (70,000 m2)
brought 43,500 m2 of rentable office space onto the market
in 2005. (€60 million; developer: HB Reavis)

* Delta Business Centre *

Completed in 2004, DBC provided 11,600 m2 of offices over
7 floors. (Local developer DBC Invest)

* Millenium Tower I, II *

Part of the Polus City Center in BA III, the two towers offer
41,600 m2 of office space. (€ 62 million; developer: TriGranit)

* Westend Business Park *

Comprising 3 office blocks in BA IV - Westend Tower (6,700 m2
of offices over 18 floors - reconstruction of an old block),
Westend Court (7,700 m2 of offices, 9 floors) and Westend
Point (6,000 m2 office space, 6 floors) - delivered by J&T
in 3 stages, in 1999-2004. Total investment of €24.5 million.

* Galvaniho Business Center I, II *

Near the airport and new Avion Shopping Center Austrian
Lindner Group has built office facilities (12,000 m2) that,
due to less desirable location outside central areas can
be classified as high quality B class office space.

5,000 m2 of offices are also part of the Shopping Palace,
(north of Galvaniho BC) built by Austrian Soravia Group.

* Europeum Centre *

10,000 m2 of retail and offices offered to the market in
2004, in a prestigious city centre area on Hurbanovo nam.

Other regions of Slovakia
-------------------------

The office market is completely undeveloped in other Slovak
cities (due to low demand). The first large development will
be built in Banska Bystrica, traditionally a less prosperous
region, and raises questions on viability of such project.

Europa Business Center (23-stories, 7,500 m2, €10.8 million)
will be part of the € 43 million Europa Shopping Center.
Both will be developed by a local group; delivery: mid 2007.

In the next issue: retail and logistics.

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3) Bargain in the Heart of Liptov

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In early May you will have the chance to snap up a true
bargain - beautiful new apartments in Slovakia's most
visited tourit area. Located in the historic and cultural
centre of the Liptov region, within easy reach of several
ski resorts - including Jasna, the best and largest ski
resort in Central Eastern Europe!

Whether you are looking for a second home in one of Europe's
most beautiful and unspoiled locations, or a lucrative
investment, you cannot miss this amazing deal! 1 bedroom
apartments start at incredible 23,000 GBP (including VAT)!!

So, what will you get at these bargain prices?

* high quality new apartments in a beautiful historic
town surrounded by the majestic peaks of Low Tatras,
West Tatras and Choc Mountains

* Slovakia's best skiing minutes away - including Central
Eastern Europe's # 1 resort Jasna

* several thermal spas for relaxation and healing

* Central Europe's largest and most famous AquaPark just
2km away

* Slovakia's largest water reservoir minutes away
(swimming, yachting, fishing, water sports, relaxation)

* breathtaking, unspoiled nature (green valleys, crystal
lakes, waterfalls, amazing caves)

* all year round activities (winter sports, hill climbing,
hiking, mountainbiking, paragliding, rafting, fishing,
hunting, horse riding, and much more)

* rich history all around you (castles, ancient settlements,
open air museums of traditional folk architecture and
culture)

* plus, excellent for holiday lets (through travel agency)

Only 15 apartments are available, so, register Now if you
don't want to miss out on this truly fantastic deal!

* * *

And, don't forget! A rare residential block of just 20
apartments on the border of BA I/city centre, just a few
metres from the prestigious new City Business Centre, as
well as the main bus terminal! Exclusive to Slovakia
Investment Property. Great prices! Release expected late May.

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4) Tell Us What You Think!

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We would love to hear what you think of this issue of our
newsletter. We hope you find the information useful and
wish you best success in your investment activities.
And of course, if you have any suggestions for upcoming
issues that you'd like to share with us, please send them!

Just e-mail us at: contact@slovakiainvestmentproperty.com

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We are looking forward to seeing you next month. In the
meantime, if you have any questions or would like to
request further information, please contact us at
info@slovakiainvestmentproperty.com or at
+44 (0)207 152 4014.

Best of success,

Petra Gajdosikova
Managing Director
Slovakia Investment Property
www.slovakiainvestmentproperty.com

Slovakia Investment Property is a trading name of
Alpha Real Estate Investments Limited