Total investment volume in real estate projects in Slovakia reached 348 million euro in the first half of 2018. This represents a year-on-year increase of 117%. The average amount of the loan in the area of real estate project financing in Slovakia is in the range of EUR 10-15 million. The most attractive segment for Slovak banks is retail. These are the findings of the 9th edition of the Property Lending Barometer.
According to the results of the KPMG Survey, impaired loans are fewer and fewer in the CEE region: the proportion of fully compliant loans in banks’ portfolios in Central & Eastern Europe has become much greater, over 85% in most of the countries. In comparison, four years ago, only two countries enjoyed a higher than 85% proportion of fully-compliant loans in their banks’ portfolio.
Despite the significant year-on-year increase, financial institutions surveyed in Slovakia did not indicate that real estate financing was of high strategic importance. Their major emphasis is being placed on financing income-generating projects, yet these survey participants said they are open to financing new developments as well. The average loan size among those surveyed ranges EUR 10-15 million.
"Just like last year, the positive expectations of Slovak banks are reflected in the financing of larger projects. According to our survey, the preferred loan amount is higher than the current average. Banks would provide loans for real estate projects at about EUR 20 million," says Michal Maxim, Senior Manager, Financial Services Group, KPMG in Slovakia.
Slovak banks consider real estate market as stable and they continue to be open to financing of new development projects, with preference for retail and industrial/ logistics development. Among important competitors, these banks ranked non-local commercial banks and investment banks as alternative lenders.
In the first half of this year European property investment has seen somewhat of a reduction. “Total investment volume for the first six months of this year decreased by 19% compared to H1 2017, reaching just below EUR 110 billion, which is the lowest level first half since 2014, but this may be due to most of these deals from the first half being pending”, explains Andrea Sartori, who heads KPMG’s Real Estate practice in Central & Eastern Europe.
The 9th edition of KPMG's Property Lending Barometer attempts to assess the prospects for lending in a number of European markets and depicts the specific mood of lending sentiment in each of those countries: Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Hungary, Ireland, Netherlands, Poland, Romania, Serbia, Slovakia, Slovenia and Sweden. The survey queried 70 bank representatives from the 14 countries included in the report.
KPMG Slovensko spol. s r.o.
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