We invest in Slovenia. What the experts said at the webinar Prian.ru
“Slovenia is in the zone of economic influence of Austria.” “The value of real estate is growing, on average, the profitability of commercial projects is 6%.” “You can buy commercial real estate at the stage of construction, reconstruction or as a finished project.” “The focus of the interests of retail chains – the province.” We talked about the Slovenian commercial real estate market with Vladimir Uvarov, the head of Future Real Estate, representative of Century 21 Slovenia in Russia.
The webinar was held on March 5, 2019. Its full version is here.
Vladimir Uvarov, director of Future Real Estate, representative of Century 21 Slovenia in Russia:
The main focus of our company is commercial real estate. We offer different investment programs, but there are three main areas. The first is the sale and development of already built shopping centers with an anchor tenant. The second is the sale of shopping centers during the construction phase, and the third is the reconstruction of non-core premises for shopping centers and outdated shopping centers.
We consider objects with a yield of 6%, where tenants are major discounters and local retailers, banks. The long-term contracts are five – ten years and indefinite. There is a possibility of bank financing: up to 70%.
Slovenia – one of the republics of Yugoslavia – today is a full-fledged European country. She entered the European Union, became a member of the Schengen Treaty and NATO. It is still quite often confused with Slovakia, although they do not even have a common border: Slovenia is adjacent to Austria and Italy and is in the zone of their economic influence.
There are 11 major cities in the country. The capital Ljubljana is the largest. It is home to 450 thousand people from only two million people in the country. The second most important city is Maribor, the third is Celje, and the largest settlement on the small coast is Koper.
The crisis of 2008 seriously affected the country – many companies went bankrupt. In the middle of 2017, one can say, Slovenia finally emerged from the crisis – the consumer sentiment index became equal to the pre-crisis indicators of 2007. The real estate market began to recover: the growth in real estate prices in 2018, according to Eurostat, was 13.4%.
Investors when searching for the object, as a rule, are aimed at the capital or major cities. But for Slovenia this is not always the right approach. A number of large retailers, mostly German, for several years occupied all the tasty locations in large cities. They even filled the market in more modest cities, such as Kranj and Celje. And today, the focus of their interests is already a perfect province. Therefore, the most interesting commercial projects are currently being implemented in small towns, such as Luthomer, Zalec, Murska-Sobota, Sezana, and settlements 20-30 km from Ljubljana.
Trading networks are expanding deep into Slovenia, occupying new locations. Their main buyer lives in the provinces, and, for example, a store in Murska Sobota can show revenue much higher than a store in Ljubljana. Consumer habits of Slovenes also have an effect: a local resident, even with high incomes for ordinary things and products, will still go to a discounter.
Often a discounter who wants to enter the provincial market does not find a ready-made premise for himself in the province. He makes his demands on the location, the area of the object, the presence of parking, the future “neighbors”. The company wants to work in a large consumer hub serving a nearby small town and surrounding villages. There are no finished premises, and the investor can offer something new.
I repeat: Slovenes have certain consumer habits – they want to come to one place and buy everything there. Therefore, at the entrance to each Slovenian city with a population of 3-4 thousand people there is a single trade zone. It concentrates three or four clothing stores, grocery discounters, pharmacies, hairdressers, small cafes, etc.
Commercial Real Estate Slovenia
Any investment in Slovenia is made on the basis of the opening of a legal entity.
The first is the selection of a suitable property. The second stage is the registration of a legal entity and the opening of a settlement account in a Slovenian bank. Next, a contract for the purchase of the object is signed and an advance payment is made, and after registration of the purchase and sale agreement, the main part of the property value is transferred.
The opening of a legal entity and the purchase of real estate in Slovenia amounting to more than € 50 thousand with a stable income covering all expenses of the company and making a profit, entitles you to obtain a residence permit, and after five years to receive permanent residence
Buy commercial real estate – a shopping center – can be at the construction stage. In this case, there are three main components: a land plot, a developed project and a signed lease agreement.
A preliminary contract of sale is signed, the investor makes a 10 percent deposit on the notary’s fiduciary account. The amount is a guarantor that in the future the buyer will not refuse the transaction and is not a deposit to any of the interested parties.