Slovakia Investment Property

If you find this useful, please forward it to a friend...

=========================================================
Slovakia Investment Property Newsletter
March 2006 - Issue # 18
=========================================================

The arrival of spring traditionally means more visitors -
as well as property investors - planning a trip to Bratislava.
Appropriately, our March issue brings you an overview of
the 5 districts and 17 city parts of the Slovak capital.

If you missed any of our previous newsletters, don't worry.
They are available for you here:

www.slovakiainvestmentproperty.com/newsletters.php

In this issue you will find:

1. Mortgages More Expensive
2. The Many Faces of Bratislava
3. Small Development with Huge Potential
4. Tell Us What You Think!

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

1) Mortgages More Expensive

=========================================================

The February base rate hike - at 50 bp higher than expected -
has been followed by banks raising their mortgage rates by
up to 0.5%. Even though future hikes are expected in 2006/7,
they are unlikely to slow the fast growth of mortgage finance
in Slovakia. The fact that in Slovakia the loan/GDP ratio
is still a very low 11% (in Western Europe it is five times
higher) coupled with the Slovak mentality of home ownership
indicates great potential for financing.

* * *

In 2005 Slovakia received foreign exchange earnings from
tourists of € 1 billion, an increase of 10% year-on-year.

=========================================================

2) The Many Faces of Bratislava

=========================================================

Bratislava, Slovakia's capital and largest city, offers
some of the best opportunities to an investor. However, as
any city, Bratislava consists of various neighbourhoods,
some more suitable for a property investor than others.

There are 5 main districts and each district is formed by
several city parts (each with own mayor and city council).
A map of Bratislava's city parts can be viewed here:
http://www.bratislava.sk/vismo5/dokumenty2.asp?u=700000&id_org=700000&id=75053&p1=75231

* Bratislava I - Stare Mesto (Old Town) *

Bratislava I - the city centre - is the smallest district
and the city's cultural, social and business centre.

Home buyers perspective:

Home to the most expensive properties in Bratislava, the
first district is hugely popular with Slovaks who have the
money to buy a home here, be it an apartment or, for the
wealthiest ones, a house on the Castle Hill.

Investors perspective:

BA I has been the area with the best rental demand (foreigners
and companies) as well as highest capital appreciation.
Properties are typically pre-war and early post-war flats
(1920's - 1950's). New residential construction is very
rare as building land is not available in this historic area.

* Bratislava II - Ruzinov *

BA II district covers the city parts Ruzinov, Vrakuna, and
Podunajske Biskupice. The part of Ruzinov is one of the
largest in Bratislava and home to 70,000 inhabitants. It
consists of various neighbourhoods - Nivy, Ruzova dolina,
Strkovec, Travniky, Prievoz, Posen, Ostredky, Trnavka.
Nivy is the neighbourhood bordering on the city centre,
while Trnavka is at the eastern end of Bratislava, near
the airport.

Home buyers:

The second district, and particularly its central parts
and areas close to the city centre, have been popular with
local middle class families for many years. Ruzinov is one
of the first districts to be developed after 1950, and boasts
good infrastructure and facilities. The Nivy neighbourhood
next to the city centre has recently been developed into
a new office area, featuring many of Bratislava's new
business centres.

Investors:

Good quality properties in the most popular areas of BA II
should benefit from a solid growth in the medium term. For
those looking to purchase new built property, BA II has seen
more construction than other districts, partly due to the
size of its area. In terms of rental, similar rules apply
as in other districts (except BA I) - ease of letting to
low income local tenants and students (rents of around € 300
per month, often on a shared basis), with rental demand
from foreigners and companies for top properties mostly
within short walking distance from the city centre.

The city parts of Vrakuna and Podunajske Biskupice are
among the least popular areas with local buyers. It is
not recommended to purchase an investment property here.
Podunajske Biskupice borders on Slovnaft, Slovakia's
giant oil refinery. Vrakuna apart from the housing estates
of Dolne Hony and Medziarky also houses the airport.

* Bratislava III - Nove Mesto (New Town) *

BA III consists of Nove Mesto, Raca and Vajnory. Nove mesto
is a mixed area, combining housing, industry (the largest
being the chemical plant of Istrochem), and green spaces.

Home buyers:

Nove Mesto, similarly to Ruzinov, offers a variety of flats
(both new and communist built) at medium prices. The more
exclusive neighbourhood of Koliba is in demand with family
house (rather than apartment) buyers. Koliba and Kramare
border on the forest park and have - Koliba in particular -
rather poor infrastructure. Kramare, a small and once highly
popular neighbourhood and location of several new housing
developments, has seen a drop in demand over recent years.

Raca, known for its vineyards, is popular with some local
families, particularly those who wish to buy a family house
at a reasonable price. Bad public transport facilities are
Raca's main disadvantage. Vajnory, a former Bratislava
satellite, has maintained some of its rural character. Due
to its distance from the city centre and less than ideal
infrastructure it is rarely an area of choice for local
home buyers.

Investors:
Investor buyers interested in the 3rd district should
concentrate on areas bordering the city centre.

* Bratislava IV *

The very spread out BA IV district consists of Karlova Ves,
Devin, Lamac, Dubravka, Devinska Nova Ves, Zahorska Bystrica.
Karlova Ves to the west of the city centre benefits from
good access and large park and forest area. Devin, dominated
by the ancient Devin castle ruin, has retained much of its
village character.

Lamac, bordering on the forest park, offers a mixture of
family houses and flats. Dubravka is dominated by the
communist built housing estates, and, along with Devinska
Nova Ves (DNS) has the extra disadvantage of being very
far from the city centre. Zahorska Bystrica, the farthest
suburb of Bratislava, has the same problem, although is has
been quite popular with buyers looking for a family house.

Home buyers:

Karlova Ves has seen demand from local buyers looking for
well priced apartments with good access to the city centre.
It has some of the most pleasant and green surroundings,
with the exception of the less popular housing estate of
Dlhe Diely. The other parts of the 4th district are too
far away from the centre and as such are rarely a first
choice for local home buyers.

Investors:

Investors may want to look at areas bordering city centre.

* Bratislava V *

BA V - consisting of Petrzalka and the formerly independent
villages Jarovce, Rusovce and Cunovo - is the only district
situated to the south of the Danube river.

Petrzalka, the most populated part of Bratislava, is home
to over 130,000 inhabitants. Covered with massive communist
built concrete panel blocks Petrzalka lacks infrastructure,
commercial and entertainment facilities.

Jarovce and Rusovce have preserved their quiet village feel,
and with no housing estates or blocks of flats they have
recently been discovered by Bratislava families looking for
a spacious house in a peaceful and attractive setting yet
with the city just a few minutes drive away.

Cunovo, at the border to Hungary, is largely unknown to most
Bratislava residents and due to its distance from the city
it has not seen demand from home buyers that have preferred
the equally quiet but closer areas of Jarovce and Rusovce.

Home buyers:
Petrzalka is one of the least popular places with local buyers
and is, in spite of great access to the city centre, home to
the cheapest properties in Bratislava. As such it often
houses migrants from eastern Slovakia coming to start a new
life in the capital.

Family houses in Jarovce and Rusovce have been attracting
buyers in recent years and should see their values go up
further in the future.

Investors:
The Petrzalka riverside is one area to watch out for in
coming years. With the new zoning plan approved, the right
bank of the Danube will, in the next few years, see both
residential and commercial development. However, similarly
to the left bank developments, purchase prices are likely
to be too high to offer acceptable rental returns to BTL
investors.

=========================================================

3) Small Development with Huge Potential

=========================================================

We often speak to investors with preferences for new built
property, yet looking to buy in central Bratislava in order
to benefit from the high growth and good rental demand for
city centre apartments. Now, as most of you will know, that
is a nearly impossible task - Bratislava's city centre is
a historic area with virtually no new residential blocks.

And yet, today I have a very good news for you...

We will shortly be releasing a small block of 20 apartments
in an excellent location - a mere 5 minutes WALK from the
city centre (Old Town).

With good short and long term let- and outstanding capital
growth potential, these new 1 and 2 bedroom apartments are
very hot indeed! Plus, at prices of just GBP 1,170 / m2 -
Including VAT - we believe they offer the best investment
potential in Bratislava today!

If you wish to buy a new property, the location could not
be better:

* bordering the city centre (just a short walk to the
most prestigious area of Bratislava)

* around the corner from the massive new City Business Centre
(with 3 huge office blocks and a future residential block
of very expensive apartments - expected prices GBP 2,000/m2!)

* 3 minutes walk to Bratislava's main bus station - to be
totally redeveloped (by the biggest commercial developer
in Slovakia) into a huge, modern glass & steel structure

Planning permission has now been issued and we expect to
release the development in late April. A full information
pack will be available in coming 2-3 weeks. The development
has only 20 apartments, therefore, if you are interested
in one of the units, don't wait... Contact us now.

=========================================================

4) Tell Us What You Think!

=========================================================

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

=========================================================

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