Industrial market MARKET REPORT 2019 CONTENTS

> REGION 3

> REGION 7

> TRENČÍN REGION 12

> REGION 16

> ŽILINA REGION 20

> BANSKÁ BYSTRICA REGION 23

> PREŠOV REGION 27

> KOŠICE REGION 31 Industrial market

Bratislava region, divided into eight districts, is situated in the western part of , representing the smallest and the most developed region of the country. The region is a Central European hub, bordering , Austria and with the Danube river forming a natural boarder in the south, and the river Morava in the West. Apart from the advantageous geographical location, the region attracts foreign investors POPULATION POPULATION through well developed infrastructure (including highway, BRATISLAVA BRATISLAVA REGION railway, naval and cargo ports, and an international airport), high level of economic development, and concentration of 429,564 650,838 highly-educated economically active population, making the REGIONAL AVERAGE region the largest recipient of FDI across the country. Main UNEMPLOYMENT MONTHLY economic sectors include chemical, automotive, engineering, RATE** GROSS SALARY electrotechnical and food-processing industries. Despite this, Bratislava is the first region in Slovakia where trade and 2,7% €1,310 services have overtaken industrial production.Some of the main STUDENTS STUDENTS (PART- (FULL-TIME)* TIME)* investors operating in the region include Volkswagen, Tesco, IBM, Dell and Slovnaft. 38,558 11,211 DEMOGRAPHICS GRADUATES (FULL- GRADUATES TIME)* (PART-TIME*) The majority of the working population in Bratislava region is employed in wholesale and retail trade (15.8%), industrial (14.8%) and professional scientific and technological activity 12,412 5,641 (11.7%) sectors . Economic activity rate is equal to 65.4%. HIGHER EDUCATIONAL Among the economically active population of the region, INSTITUTIONS residents with university education dominate. The highest unemployment rate (11.1%) is observed among the residents 11 with basic education, and the lowest unemployment rate (2.6%) is recorded among those with university education. Bratislava is an important academic and cultural centre. There are 11 higher educational institutions with 41 faculties in the region. The total number of students reaches almost 50,000 of which 77% are full-time and 23% are part-time. Over 18,000 students graduated in 2017, of which 69% of graduates attended the course full-time and 31% - part-time.The capital Bratislava is the largest city in the country with an official population (with registered ID cards) of around 430,000 inhabitants. However, significant number of people is travelling to Bratislava for work and leisure without permanently residing in the city. Even though small compared to the peer capitals in terms of both the size and population, Bratislava is a key economic and administrative center.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 3 Main industrial markets in Slovakia RynekBratislava biurowy region / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) 1,358,546 32,000

INFRASTRUCTURE VACANCY RATE (%) DEMAND (M2) Region’s capital city Bratislava is located on the natural 7.10% 179,108 Central European crossroads for international traffic. Airport is located 10 minutes away from the city centre. City’s RENTAL RATES UNDER (€/SQM/MONTH) railway has seven directions which are Parndorf (Au), CONSTRUCTION (M2) PRIME WAREHOUSE Marchegg (Au), Hegyeshalom (Hu), Břeclav (Cz), Komarno, Galanta and Trnava. Bratislava‘s port is one of the largest in 104,962 4.5 – 4.9 Slovakia and connects Bratislava with North and Black seas. Bratislava has several motorways as well as regional roads RENTAL RATES (€/SQM/ connecting it with the rest of Slovakia, Austria, Hungary MONTH)PRIME LOGISTICS & DISTRIBUTION & Czech Republic. The closest foreign cities are Vienna, Gyor and Brno. The A6/A4 connects Bratislava and Vienna 4.0 (60 km). There are three possible ways to Gyor with an average distance of 80 km. The D2/E65 connects Bratislava and Brno (130 km).As for the domestic connections, D1 INFRASTRUCTURE IN THE REGION (KM) motorway connects Bratislava with Trnava (50 km), Trenčín Roads CURRENT STATE (120 km), Žilina (200 km) and Košice (450 km). E572 and Route 63 connect Bratislava with Dunajská Streda (50 Total 802,229 km). In 2016 the government approved construction of the additional motorways around the city The project includes Motorway 110,438 construction of new 27 km of D4 and 32 km of D7 from Jarovce to Rača and from Prievoz to Holice respectively. The 1st class roads 130,070 completion of the project is expected in 2020. 2nd class roads 207,077 SUPPLY AND VACANCY 3rd class roads 354,644 In the first half of 2019 supply of modern grade A industrial spaces in Bratislava region increased by 32,000 sqm. Airport  Overall, the region remains the major hub of industrial development activity with most of the new additions to Train Station  the stock apparent next to the capital city Bratislava and in Senec.Due to the accelerating completion of speculative projects, vacancy rates in the region increased slightly and reached 7.10% in H1 2019. SUPPLY AND VACANCY RATE IN 2018 DEMAND 800 000 12,0% 700 000 10,0% Bratislava region attracts the majority of industrial demand 600 000 8,0% in the country. As at H1 2019, the total take up figure for 500 000 the region equalled to around 179,100 sqm representing 400 000 6,0% 300 000 75% of the total market activity. Majority of transactions 4,0% were represented by new occupations (63%), followed 200 000 2,0% by renewals (22%) and expansions (15%). In terms of 100 000 the nature of industrial clients, 75% included distribution 0 0,0% companies and 25% - producer.

Supply Vacancy

Source: Colliers International 4 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekBratislava biurowy region / Industrial market MAIN BUSINESS SECTORS IN H1 2019

BUSINESS SECTORS

The main business sectors in Bratislava region include automotive (Volkswagen and supply chain producers), chemistry (Slovnaft and Duslo), electronics and other manufacturing. Logistics is mainly concentrated around Senec district.

RENTAL RATES

Effective rental rates for modern industrial spaces in Bratislava Region remained stable throughout the year, being the highest amongst all analysed markets. Rental rates for E-commerce Other Retail Autom ot ive Other the districts were recorded as following:

Rental Rates (€/sqm/month) LEASING AGREEMENTS STRUCTURE IN H1 2019 Logistics & City Distribution Warehouse

Bratislava 4.2 4.5 15% 22% Lozorno 3.9 4.1 Expansion Malacky 3.6 3.9 New Occupation Senec 3.5 3.8 Renewal

Svätý Jur 3.7 4 63%

DEVELOPERS AND INVESTORS OPERATING IN THE MARKET DEVELOPERS AND INVESTORS The regional market is dominated by international developers - MARKET SHARE and investors. The largest owners in terms of the total existing industrial space are ProLogis (28%), Pointpark Properties (16%), Palmira – capital (10%) and Goodman International (9%). 28% 16% 10%9% 37%

SELECTED TRANSACTIONS

Selected lease transactions | H1 2019 | Bratislava Region 0% 20% 40% 60% 80% 100% ProLogis Pointpark Properties 28,300 sqm new occupation leased by confidential tenant Palmira - capital Goodman International operating in distribution sector in ProLogis Park Bratislava.

22,100 sqm expansion leased by Slomantec (automotive producer) in CTP Park Bratislava.22,100 sqm new EFFECTIVE RENTAL RATES H1 2019 (EUR/ occupation leased by Delticom OE (producer) in CTP Park, SQM/MONTH) Bratislava. 5,00 4,00 ADDITIONAL COMMENTS AND FORECASTS 3,00 Due to the lack of available land with the necessary building 2,00 permissions, new development within the capital city 1,00 Bratislava is currently limited. Developers are starting to build around the city instead. Market activity is moving from 0,00 brownfields to the new industrial parks. Bratislava Lozorno Malacky Senec Svätý Jur Logistics & Distribution Warehouse 5 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce Source: Colliers International

Industrial market

Trnava region, located in the western part of the country, is one of the smallest regions in terms of both the total area and population. Geographically, the region is largely made up of the Danubian plain and Zahorska lowlands separated by Little Carpathian Mountains. The area is rich in water resources including rivers Danube, Váh and Morava. Trnava region shares boarders with Czech Republic, Hungary and Austria, and is POPULATION POPULATION divided into seven districts. Proximity to the capital TRNAVA TRNAVA REGION and Bratislava region in turn results in higher than 65,382 562,372 average wages and considerably lower unemployment. Trnava region can be characterized by the growing REGIONAL AVERAGE rate of foreign capital (especially within the industrial UNEMPLOYMENT MONTHLY GROSS SALARY sector), highest in the country level of utilization of RATE** agricultural land, highly qualified workforce, availability 2,4% €965 of land with potential for industrial zones development, STUDENTS STUDENTS (PART- as well as sound transport position, including (FULL-TIME)* TIME)* highways to Bratislava and Vienna airports.The main economic sectors of the region include automotive, 10,372 2,796 electrotechnics, metallurgy, chemistry and glass GRADUATES (FULL- GRADUATES industry. More focus is currently shifting to the higher TIME)* (PART-TIME*) value-added production, especially in engineering and electronics sectors, which continue to capture attention of the foreign investors.Some of the main investors 3,260 1,171 operating in the region include PSA Peugeot Citroen, HIGHER EDUCATIONAL Samsung, Electronics, Swedwood, Delphi and On INSTITUTIONS

Semiconductor. 4 DEMOGRAPHICS

The majority of the working population in Trnava region is employed in the industrial (37.5%) and wholesale and retail trade (11.0%) sectors. Economic activity rate is equal to 62.1%. Among the economically active population of the region, residents with upper secondary education dominate. The highest unemployment rate (16.8%) is observed among the residents with basic education, and the lowest unemployment rate (3.9%) is recorded among those with university education. There are 4 higher educational institutions with 13 faculties in the region. The total number of students reaches almost 13,200 of which 79% are full-time and 21% are part- time. Over 4,400 students graduated in 2017, of which 74% of graduates attended the course full-time and 26% - part-time. *As for 2017, latest data set available **Q1 2019 Source: Colliers International based on Central Statistical Office, March 2019. 7 Main industrial markets in Slovakia RynekTrnava biurowy region / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) 530,290 - INVESTMENT INCENTIVES VACANCY RATE (%) DEMAND (M2) Maximum percentage of investment aid incentive in Trnava Region is equal to 25%, however, the 1.32% 4,080 benchmark can be increased by 10-20% if the recipient is an SME. Priority projects include UNDER RENTS industrial production, technology centres, shared CONSTRUCTION (M2) (EUR/M2/MONTH) cervices centres and tourism. In cases where the recipient meets the set requirements one of the - 4.0 – 4.5 following types of state aid can be applied for: a) RENTAL RATES (€/SQM/ income tax relief under a separate regulation; b) MONTH)PRIME LOGISTICS & subsidy for the acquisition of material and immaterial DISTRIBUTION assets; c) contribution for the creation of new jobs under a separate regulation. 3.8 - 4.0

INFRASTRUCTURE

Regional capital’s infrastructure includes four railway INFRASTRUCTURE IN THE REGION (KM) routes towards Bratislava, Kúty, Sereď and Leopoldov. Roads CURRENT STATE Main connecting roads are in the direction to Bratislava (50km), Trenčín (85km) and Nitra (50km). Total 1,946,203 Local spa city Piešťany also features an airport. Motorway 67,242 SUPPLY AND VACANCY Expressway 26,424 No new modern industrial spaces were introduced in Trnava region during the first half of 2019 and the 1st class roads 266,999 total industrial supply during the first half of 2019 equalled to 530,290 sqm. Vacancy rates remained 2nd class roads 524,92 stable at the level of 1.32%, where most of the districts within the region continue to demonstrate 3rd class roads 1,060,758 zero vacancy (e.g. Galanta, , Trnava and Voderady). Airport 

DEMAND Train Station 

During the first half of the year only one deal was SUPPLY AND VACANCY RATE IN 2018 recorded in Trnava region (confidential distribution player’s expansion in ProLogis Park Galanta). Lack of 300 000 8,0% 7,0% transactions is attributed to full occupancy of most of 250 000 the industrial properties within the region. 6,0% 200 000 5,0% 150 000 4,0% 3,0% 100 000 2,0% 50 000 1,0% 0 0,0%

Supply Vacancy

Source: Colliers International 8 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekTrnava biurowy region / Industrial market DEVELOPERS AND INVESTORS - MARKET SHARE BUSINESS SECTORS

The main business sectors in Trnava region include automotive (Peugeot Citroen and supply chain 52% 26% 13% 9% producers, e.g. Faurecia) in Hlohovec. Another automotive parts producer Lear is based in Voderady. Main logistics players in the region include Gefco and Tesco, while a large biscuits producer IDC is situated 0% 20% 40% 60% 80% 100% in Sereď. CNIC Corporation Limited CTP MountPark PNK

RENTAL RATES EFFECTIVE RENTAL RATES H1 2019 (EUR/ Effective rental rates for modern industrial spaces SQM/MONTH) in Trnava Region remained stable throughout the year. Rental rates for the districts were recorded as 5,00 following: 4,00 Rental Rates (€/sqm/month) 3,00 Logistics & 2,00 City Distribution Warehouse 1,00 Galanta 3.5 3.9 Hlohovec 3.9 4.2 0,00 Sereď 3.5 3.9 Galanta Hlohovec Sereď Trnava Voderady Trnava 3.9 4.3 Logistics & Distribution Warehouse Voderady 3.8 4.3

DEVELOPERS AND INVESTORS OPERATING IN THE MARKET

The market is dominated by international developers and investors. The largest owners in terms of the total existing industrial space are CNIC Corporation Limited (52%), CTP (26%), MountPark (13%) and PNK (9%).

ADDITIONAL COMMENTS AND FORECASTS

Trnava region demonstrates the lowest unemployment rate throughout the country, therefore limiting new development opportunities for the investors due to the lack of workers. New developments are mainly concentrated around Sereď. The region, however, remains attractive to automotive supply chain producers actively seeking for expansion opportunities.

Source: Colliers International 9 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market TRENČÍN REGION

Trenčín region forms the northwest part of Slovakia, geographically belonging to the Western Carpathian Mountains. The most densely populated areas are concentrated along the banks of the river Váh. Outer western boarder of the region is formed with the Czech Republic, while inner boarders include Žilina, Banská POPULATION POPULATION Bystrica, Nitra and Trnava regions. Trenčín region is TRENČÍN TRENČÍN REGION divided into nine districts.The region is characterized by the presence of the fuel-energetic base, brown 66,082 587,364 coal mines of national importance, favourable age and REGIONAL AVERAGE educational structure of the population, diversified UNEMPLOYMENT MONTHLY industrial base with the dominance of industrial RATE** GROSS SALARY production activities, advantageous geographical location providing access to the major highway connecting 2,9% €958 STUDENTS STUDENTS (PART- Western Slovakia with the rest of the EU, as well as (FULL-TIME)* TIME)* relatively lower wage levels and higher unemployment, compared to Bratislava and Trnava regions.The main 2,093 2,704 economic sectors of the region include machinery, GRADUATES (FULL- GRADUATES metallurgy, electronics, chemical industry (especially TIME)* (PART-TIME*) rubber) and construction. Machinery production, which was once oriented towards weapons is, however, currently undergoing a significant overhaul. Chemical 717 747 industry is concentrated in Púchov district, home to tire producers.Some of the main investors operating in the HIGHER EDUCATIONAL INSTITUTIONS region include Au Optronics, Leoni Autokabel, Yazaki,

Yura Corporation, Emerson and Continental Matador. 3 DEMOGRAPHICS

The majority of the working population in Trenčín region is employed in the industrial (46.8%) and wholesale and retail trade (12.2%) sectors. Economic activity rate is equal to 59.0%. Among the economically active population in the region, residents with upper secondary education dominate. The highest unemployment rate (11.3%) is observed among the residents with basic education, and the lowest unemployment rate (3.3%) is recorded among those with upper secondary education. There are 3 higher educational institutions with 6 faculties in the region. The total number of students reaches almost 4,800 of which 44% are full-time and 56% are part-time. Almost 4,800 students graduated in 2017, of which 49% of graduates attended the course full-time and 51% - part-time. *As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 12 Main industrial markets in Slovakia RynekTrenčín biurowy region / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) 218,515 31,531

VACANCY RATE (%) DEMAND (M2) INVESTMENT INCENTIVES 1.51% - Maximum percentage of investment aid incentive in Trenčín Region is equal to 25%, however, the UNDER RENTS CONSTRUCTION (M2) (EUR/M2/MONTH) benchmark can be increased by 10-20% if the recipient is an SME. Priority projects include - 4.0-4.2 industrial production, technology centres, shared RENTAL RATES (€/SQM/ cervices centres and tourism. In cases where the MONTH)PRIME LOGISTICS & recipient meets the set requirements one of the DISTRIBUTION following types of state aid can be applied for: a) income tax relief under a separate regulation; b) 3.8 - 4.0 subsidy for the acquisition of material and immaterial assets; c) contribution for the creation of new jobs under a separate regulation. INFRASTRUCTURE IN THE REGION (KM)

Roads CURRENT STATE INFRASTRUCTURE Total 1,886,547 Regional airport is located in the regional capital - the city Trenčín, 10 minutes away from the city centre. Motorway 86,494 The railway connection follows five directions, where the main two connections are Trenčín to Leopoldov Motorway Feeders 1,226 and Žilina. Main highways connect Trenčín with Brno (CZ) via Route 50 (130km) and Olomouc (CZ) via Expressways 11,648 Route 50/E 462 (160km). Main inner connections join Trenčín with Bratislava (120 km), Košice (330 km), 1st class roads 304,878 Nitra (120 km) and Žilina (50 km). 2nd class roads 347,029 SUPPLY AND VACANCY 3rd class roads 1,135,272 In the first half of 2019, the supply of modern grade A industrial space in Trenčín reached 218,515 sqm Airport  with two additional projects with a total area of 31,531 sqm added in Q2 2019. Vacancy rates in the region Train Station  remain very low amounting to 1.51% at the end of H1 2019. SUPPLY AND VACANCY RATE IN 2018

DEMAND 125 000 3,5% 120 000 3,0% No deals were recorded in the region during the first 115 000 2,5% half of 2019. Lack of transactions is attributed to full 110 000 2,0% occupancy of most of the industrial properties within 105 000 1,5% the region. 100 000 1,0% 95 000 0,5% 90 000 0,0% Nové Mesto Trenčin

Supply Vacancy

Source: Colliers International, 13 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekTrenčín biurowy region/ Industrial market DEVELOPERS AND INVESTORS - MARKET SHARE

28% 54% 11% 7% BUSINESS SECTORS

The main business sectors in Trenčín region include automotive (e.g. Leoni and Magna in Nové Mesto), 0% 20% 40% 60% 80% 100% electronics (AU Optronics in Trenčín) and some ARETE Invest AU Optronics Immofinanz CTP logistics. Large gas heaters producer Vailant is based in the city of Trenčín. EFFECTIVE RENTAL RATES H1 2019 (EUR/ SQM/MONTH) RENTAL RATES 4,50 Effective rental rates for modern industrial spaces 4,00 in Trenčín region remained stable throughout the 3,50 year. Rental rates for the districts were recorded as 3,00 following: 2,50 2,00 Rental Rates (€/sqm/month) 1,50 Logistics & 1,00 City Distribution Warehouse 0,50 Trenčín 3.6 4.0 0,00 Nové Mesto 3.3 3.8 Trenčín Nové Mesto

DEVELOPERS AND INVESTORS OPERATING IN Logistics & Distribution Warehouse THE MARKET

More than a half (54%) of Trenčín’s existing modern industrial premises is owned by AU Optronics. Other developers with significant regional market share involve ARETE Invest (28%), Immofinanz (11%) and CTP (7%).

ADDITIONAL COMMENTS AND FORECASTS

The region can be characterised by high level of competition around Nové Mesto district. We believe the trend to strengthen with the delivery of new large projects currently under the planned stage of construction.

Source: Colliers International 14 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market NITRA REGION

Nitra region is situated in the southern part of the country in Podunajské lowlands extending to Štiavnické vrchy mountain range in its northern part. Danube river forms the region’s natural boarder on the south, while other important rivers crossing the region include Váh, Hron and Nitra. The region shares a border with Hungary POPULATION POPULATION and neighbours Trnava, Trenčín and Baská Bystrica NITRA NITRA REGION regions domestically. The region is further divided into seven districts.Major advantages of the region 85,704 678,692 include the existence of strong potential for industrial REGIONAL AVERAGE and agricultural production, presence of sufficient UNEMPLOYMENT MONTHLY and qualified workforce, availability of universities and RATE** GROSS SALARY a research centre in Nitra, sufficient space for potential development, availability of highway connecting Nitra 3,1% €849 STUDENTS STUDENTS (PART- with Trnava and the rest of the Western Slovakia and the (FULL-TIME)* TIME)* EU, potential for the utilization of water bodies, dominant status of the region in terms of the energy supply and 12,626 2,731 possibilities of cross boarder tourism development. Some GRADUATES (FULL- GRADUATES of the main investors operating in the region include TIME)* (PART-TIME*) Sony Slovakia, SE Bordnetze, Kromberg & Schubert, Riekter, OSRAM, as well as Jaguar Land Rover. 4,422 1,075 DEMOGRAPHICS HIGHER EDUCATIONAL The majority of the working population in Nitra region is INSTITUTIONS employed in industrial (33.4%) and wholesale and retail trade (13.2%) sectors. Economic activity rate is equal 3 to 59.1%. Among the economically active population of the region, residents with upper secondary education dominate. The highest unemployment rate (20.7%) is observed among the residents with basic education, and the lowest unemployment rate (2.2%) is recorded among those with university education. There are 3 higher educational institutions with 14 faculties in the region. The total number of students reaches almost 15,400 of which 82% are full-time and 18% are part-time. Almost 5,500 students graduated in 2017, of which 80% of graduates attended the course full-time and 20% - part- time.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 16 Main industrial markets in Slovakia RynekNitra region biurowy / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) 126,340 -

VACANCY RATE (%) DEMAND (M2) INVESTMENT INCENTIVES 0% - Maximum percentage of investment aid incentive RENTAL RATES in Nitra Region is equal to 25%, however, the UNDER (€/SQM/MONTH) CONSTRUCTION (M2) PRIME WAREHOUSE benchmark can be increased by 10-20% if the recipient is an SME. Priority projects include 37,778 3.9 - 4.4 industrial production, technology centres, shared cervices centres and tourism. In cases where the RENTAL RATES (€/SQM/ recipient meets the set requirements one of the MONTH)PRIME LOGISTICS & DISTRIBUTION following types of state aid can be applied for: a) income tax relief under a separate regulation; b) 3.6 - 4.0 subsidy for the acquisition of material and immaterial assets; c) contribution for the creation of new jobs under a separate regulation. INFRASTRUCTURE IN THE REGION (KM)

Roads CURRENT STATE INFRASTRUCTURE Total 2,590,693 Infrastructure of the Nitra region includes railway and road connections. The main railway directions Motorway 67,319 are towards Nové Zámky and Leopoldov, while the road networks connect Nitra with Bratislava (94 1st class roads 488,479 km), Banská Bytrica (125 km), Komárno (65 km) and Trnava (40 km). 2nd class roads 498,082

SUPPLY AND VACANCY 3rd class roads 1,536,813

In the first half of 2019, the supply of modern grade Airport X A industrial spaces in Nitra region amounted to 126,340 sqm. There were no vacant spaces available Train Station  within the existing devleopments. Almost 40,000 sqm of additional modern industrial premises are currently under active construction.

DEMAND SUPPLY AND VACANCY RATE IN 2018 Due to zero vacancy rates in the region no deals were recorded during the first half of the year. 120 000 100,0%

100 000 80,0% 80 000 60,0% 60 000 40,0% 40 000

20 000 20,0%

0 0,0% Nitra Vráble

Supply Vacancy

Source: Colliers International, 17 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekNitra region/ biurowy Industrial market DEVELOPERS AND INVESTORS - MARKET SHARE

15% 27% 9% 49% BUSINESS SECTORS

The main business sectors in Nitra region include 0% 20% 40% 60% 80% 100% automotive (Jaguar Land Rover and supply chain producers in Nitra, Miba and Matador automotive CEHIP CTP Nitra Invest CNIC Corporation Limited producers in Vráble) and electronics (Foxcon Sony in Nitra). EFFECTIVE RENTAL RATES H1 2019 (EUR/ SQM/MONTH) RENTAL RATES 5,00 Effective rental rates for modern industrial spaces in Nitra region remained stable throughout the 4,00 year. Rental rates for the districts were recorded as 3,00 following: Rental Rates (€/sqm/month) 2,00 Logistics & 1,00 City Distribution Warehouse 0,00 Nitra 3.8 4.2 Nitra Vráble Vráble 3.6 4.0 Logistics & Distribution Warehouse DEVELOPERS AND INVESTORS OPERATING IN THE MARKET

Almost a half of Nitra’s existing modern industrial premised are owned by ProLogis (49%). Other important players include CTP (27%), CEHIP (15%) and Nitra Invest (9%).

ADDITIONAL COMMENTS AND FORECASTS

Industrial market in Nitra region is still expanding. Additional stimulus is planned to be brought by the expansion in Jaguar Land Rover capacities and corresponding growth in the supply chain. The main issue that the developers and investors are faced with is the labour shortages arising due to low (and falling) unemployment rate.

Source: Colliers International 18 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market ŽILINA REGION

Žilina region is situated in the northwest part of the country in a mountainous area made up of the West Tatras, the Great Fatra and the Little Fatra mountains. Population is concentrated in the valleys of the major regional rivers – Váh, Orava and Turiec. Large regional areas (over 50% of the total region) are considered POPULATION POPULATION protected for environmental and conservation purposes. ŽILINA ŽILINA REGION The region is popular for natural tourism as well as 691,023 SPAs. Žilina region shares international borders with 89,802 Czech Republic and Poland. Domestically, Žilina region REGIONAL AVERAGE boarders Trenčín, Banská Bystrica and Prešov regions. UNEMPLOYMENT MONTHLY The region is divided into 11 districts.Main advantages RATE** GROSS SALARY of the region include abundant wood and non-metallic 3,9% €907 silicate deposits, access to the highway connecting STUDENTS STUDENTS (PART- the region to Western Slovakia and the EU, abundant (FULL-TIME)* TIME)* supply of water, favourable conditions for tourism and presence of important regional investors, including 10,900 1,511 KIA Motors, Panasonic, INA and Mondi SCP.Regional GRADUATES (FULL- GRADUATES production is mainly focused on the production of metals, TIME)* (PART-TIME*) machinery, wood, cellulose, paper and related products. Other important regional industries are construction, electrotechnics and telecommunications. The importance 3,234 742 of the last two is growing thanks to the investment HIGHER EDUCATIONAL activities of the foreign investors. INSTITUTIONS

DEMOGRAPHICS 3 The majority of the working population in Žilina region is employed in the industrial (34.3%) and wholesale and retail trade (12.7%) sectors. Economic activity rate is equal to 58.8%. Among the economically active population of the region, residents with upper secondary education dominate. The highest unemployment rate (23.1%) is observed among the residents with basic education, and the lowest unemployment rate (3.9%) is recorded among those with university education. There are 3 higher educational institutions with 12 faculties in the region. The total number of students reaches more than 12,400 of which 88% are full-time and 12% are part-time. Almost 4,000 students graduated in 2017, of which 81% of graduates attended the course full-time and 19% - part-time.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 20 Main industrial markets in Slovakia RynekŽilina region biurowy / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) INVESTMENT INCENTIVES 68,860 - Maximum percentage of investment aid incentive in Žilina Region is equal to 25%, however, the benchmark can be 2 increased by 10-20% if the recipient is an SME. Priority VACANCY RATE (%) DEMAND (M ) projects include industrial production, technology centres, shared cervices centres and tourism. In cases where the 0% 10,617 recipient meets the set requirements one of the following types of state aid can be applied for: a) income tax relief RENTAL RATES under a separate regulation; b) subsidy for the acquisition UNDER (€/SQM/MONTH) 2 of material and immaterial assets; c) contribution for the CONSTRUCTION (M ) PRIME WAREHOUSE creation of new jobs under a separate regulation. 10,620 4.2 – 4.5 INFRASTRUCTURE RENTAL RATES (€/SQM/ Regional infrastructural objects in Žilina region include MONTH)PRIME LOGISTICS & airport, railway and roads. The airport is located 10 mins DISTRIBUTION away from the capital city Žilina’s city centre. The railway has three main directions connecting Žilina with Martin, 4.0 Čadca and Púchov. Major roads connect Žilina with Bratislava (200km) and Banská Bystrica (90km). INFRASTRUCTURE IN THE REGION (KM)

SUPPLY AND VACANCY Roads CURRENT STATE

In H1 2019 total supply of modern industrial spaces in Total 2,050,765 Žilina equalled to 68,860 sqm, no new spaced were introduced during the first half of the year. There are no Motorway 101,960 vacant spaces available in the region.

DEMAND Expressways 18,803

Due to low vacancy rates only one deal was recorded in 1st class roads 502,622 Žilina region during the first half of the year, representing 10,617 sqm new demand from the producer company TI 2nd class roads 327,237 – Hanil Slovakia (pre-lease).

BUSINESS SECTORS 3rd class roads 1,100,143

The main business sectors in Žilina region include Airport  automotive (Kia Motors and supply chain producers) and logistics (the region is the logistics hub for the central Train Station part of the country and a base of companies like DHL,  Gefko, Schenker, etc.) DEVELOPERS AND INVESTORS – MARKET DEVELOPERS AND INVESTORS OPERATING IN THE SHARE MARKET

Industrial market in Žilina region is dominated by two largest developers Pointpark Properties and CTP holding 41% and 36% of the total existing supply. Other important investors include Istrofinal (12%), ARETE 7% 36% 4% 12% 41% Invest (7%) and Immorent (4%).

ADDITIONAL COMMENTS AND FORECASTS

The region remains a stable established logistics 0% 20% 40% 60% 80% 100% destination of the Central Slovakia. Even though there are ARETE Invest CTP currently few projects under active construction, major developers are holding land ready to provide additional Immorent Istrofinal capacities in a timeframe of a few months.

Source: Colliers International, 21 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market BANSKÁ BYSTRICA REGION

Banská Bystrica region is the largest and the least densely populated region of Slovakia. Situated in the southern part of Central Slovakia the region is formed by lowlands in the south and mountains in the north and shares borders with Hungary, as well as five other Slovak regions - Nitra, Trenčín, Žilina, Prešov and Košice. POPULATION POPULATION BB Banská Bystrica region is divided into 12 districts with BB REGION several types of settlements ranging from the city of Banská Bystrica to medium-sized cities, towns, villages 78,484 649,788 and small settlements.Major advantages of the region REGIONAL AVERAGE involve availability of educated workforce, abundance UNEMPLOYMENT MONTHLY of raw materials, good position in export of metallurgy, RATE** GROSS SALARY wood and glass processing, ceramic and chemical 7,0% €868 industry, availability of brown and greenfields suitable STUDENTS STUDENTS (PART- for the development of industrial parks/zones, favourable (FULL-TIME)* TIME)* nature and climate conditions for the development of tourism. Main foreign investors in the region are Biotika, 8,394 1,744 Yura Eltec, Nemak and Slovalco.Due to the region’s long GRADUATES (FULL- GRADUATES tradition in mining, metallurgy is prevailing as an industry. TIME)* (PART-TIME*) Other important sectors are woodwork, engineering, chemistry, pharmacy and food processing. The regional centre of Banská Bytrica in turn is becoming more 3,190 937 service and trade oriented. HIGHER EDUCATIONAL INSTITUTIONS DEMOGRAPHICS The majority of the working population in Banská 4 Bystrica region is employed in the industrial (28.1%), wholesale and retail trade (13.6%) and public administration (12.5%) sectors. Economic activity rate is equal to 60.6%. Among the economically active population of the region, residents with upper secondary education dominate. The highest unemployment rate (28.5%) is observed among the residents with basic education, and the lowest unemployment rate (6.8%) is recorded among those with university education. There are 4 higher educational institutions with 15 faculties in the region. The total number of students reaches more than 10,100 of which 83% are full-time and 17% are part-time. More than 4,100 students graduated in 2017, of which 77% of graduates attended the course full-time and 23% - part-time.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 23 Main industrial markets in Slovakia RynekBanská biurowy Bystrica region / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) INVESTMENT INCENTIVES 49,400 25,000 Maximum percentage of investment aid incentive in Banská Bystrica Region is equal to 25%, however, the 2 benchmark can be increased by 10-20% if the recipient VACANCY RATE (%) DEMAND (M ) is an SME. Priority projects include industrial production, technology centres, shared cervices centres and tourism. 48.58% 43,939 In cases where the recipient meets the set requirements one of the following types of state aid can be applied RENTAL RATES for: a) income tax relief under a separate regulation; b) UNDER (€/SQM/MONTH) 2 subsidy for the acquisition of material and immaterial CONSTRUCTION (M ) PRIME WAREHOUSE assets; c) contribution for the creation of new jobs under a separate regulation. 20,939 4.0 – 4.5

INFRASTRUCTURE INFRASTRUCTURE IN THE REGION (KM)

Banská Bytrica’s regional infrastructure comprises Roads CURRENT STATE airport, railway and roads. The airport is located 15 mins away from the city centre of Banská Bystrica city. The Total 3,209,595 railway in turn has three directions connecting Banská Bytrica with Zvolen, Horná Štubňa and Brezno. The main Expressways 127,465 roads connect Banská Bystrica with Bratislava (210 km), Košice (230 km), Komarno (170 km) and Trenčín (140 km). 1st class roads 640,891

SUPPLY AND VACANCY 2nd class roads 601,894

As at the end of H1 2019 total supply of modern industrial 3rd class roads 1,839,345 premises in Banská Bystrica was equal to 49,400 sqm of which 25,000 sqm were introduced during the first Airport X half of 2019. Due to the rather limited total supply and considerable new introductions in Q2 2019, vacancy levels in the region are rather high reaching 48.58%. Train Station 

DEMAND

During the first half of the year Banská Bystrica faced substantial demand attracting tenants with a total of 43,939 sqm. It should be noted that the new demand involve pre-leases for the projects yet to be commissioned.

Source: Colliers International, 24 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekBanská biurowy Bystrica region / Industrial market

BUSINESS SECTORS

Industrial market in Banská Bystrica region is somewhat less developed than in other regions across the country. The main business sectors region include manufacturing represented by PUNCH Campus. Additional logistics facilities are currently being established around Detva.

DEVELOPERS AND INVESTORS OPERATING IN THE MARKET

Currently there is only one major developer PUNCH Campus in the region owning 100% of the modern industrial premises.

SELECTED TRANSACTIONS

Selected lease transactions | H1 2019 | Banská Bystrica Region

20,939 sqm new occupation leased by confidential tenant operating in distribution sector in ProLogis Park Žiar.

11,500 sqm new occupation leased by ZF Slovakia in Punch Property Detva.

11,500 sqm new occupation leased by Punch Precision in Punch Property Detva.

ADDITIONAL COMMENTS AND FORECASTS

Banská Bystrica region is a mountainous area traditionally rather unattractive for industrial production. New projects around the region include development of the retail distribution centre in Žiar nad Hronom, currently at the stage of active construction.

Source: Colliers International, 25 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market PREŠOV REGION

Prešov region ranks among the largest and most populated in the country, featuring Slovakia’s most renowned High Tatras National Park, located in the western part of the region. Rich water sources include rivers such as and Topľa, as well as numerous POPULATION POPULATION dams, with the Domaša reservoir being the largest and PREŠOV PREŠOV REGION most important recreational area. Prešov region shares a border with both Poland and and also borders 95,323 823,826 three inner regions. The region is divided into 13 districts. AVERAGE The major advantages of the region include favourable REGIONAL MONTHLY demographics progress, excellent transport connectivity, UNEMPLOYMENT RATE** GROSS SALARY availability of labour, high forestation of the territory bringing in strong potential for the wood industry, 8,7% €777 development of traditional industrial sectors and crafts, STUDENTS STUDENTS (PART- availability of international airport in Poprad, favourable (FULL-TIME)* TIME)* conditions for the development of tourism and supporting services, well preserved environment and a good 7,814 1,745 position for cross border cooperation with Poland. Major GRADUATES (FULL- GRADUATES international investors in the region include Tatravagonka, TIME)* (PART-TIME*) Tesla Stropkov, Whirlpool and Lear Corporation. The main sectors include the food processing, chemical, mechanical engineering and textile industries. With 2,593 744 the exception of the chemical industry, all the other industries are evenly spread throughout the region. The HIGHER EDUCATIONAL chemical industry is represented by few big companies in INSTITUTIONS the Humenné and Poprad districts. 2 DEMOGRAPHICS

The majority of the working population in Prešov region is employed in the industrial (29.4%), wholesale and retail trade (12.3%) and education (11.2%) sectors. Economic activity rate is equal to 59.4%. Among the economically active population of the region, residents with upper secondary education dominate. The highest unemployment rate (57.9%) is observed among the residents with basic education, and the lowest unemployment rate (6.5%) is recorded among those with university education. There are 2 higher educational institutions with 10 faculties in the region. The total number of students reaches more than 9,500 of which 82% are full-time and 18% are part-time. More than 3,300 students graduated in 2017, of which 78% of graduates attended the course full-time and 22% - part- time.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 27 Main industrial markets in Slovakia RynekPrešov biurowy region / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) INVESTMENT INCENTIVES 31,000 - Maximum percentage of investment aid incentive in Prešov Region is equal to 25%, however, the benchmark 2 can be increased by 10-20% if the recipient is an SME. VACANCY RATE (%) DEMAND (M ) Priority projects include industrial production, technology centres, shared cervices centres and tourism. In cases 0% - where the recipient meets the set requirements one of the following types of state aid can be applied for: RENTAL RATES a) income tax relief under a separate regulation; b) UNDER (€/SQM/MONTH) 2 subsidy for the acquisition of material and immaterial CONSTRUCTION (M ) PRIME WAREHOUSE assets; c) contribution for the creation of new jobs under a separate regulation. 12,800 3.9

INFRASTRUCTURE RENTAL RATES (€/SQM/MONTH) PRIME LOGISTICS & DISTRIBUTION Regional infrastructure is Prešov region is represented by railway, roads and an airport in Poprad. The railway 3.8 has three main directions connecting Prešov with Košice, Vranov nad Topľou and Plaveč. The main roads connect Prešov via D1 motorway with Bratislava (410 km), Trenčín (300 km), Žilina (215 km) and Košice (40 km).

SUPPLY AND VACANCY INFRASTRUCTURE IN THE REGION (KM)

Supply of modern industrial spaces in Prešov remains Roads CURRENT STATE stable amounting to 31,000 sqm in H1 2019. There is Total 3,189,322 a number of new projects in the planned phase, as well as one at the stage of active construction. There are no vacant spaces available and the vacancy rates remain at Expressways 110,744 zero. Motorways 4,451 DEMAND 1st class roads 637,528 No transactions were recorded in Prešov region during the first half of 2019. 2nd class roads 520,525

3rd class roads 1,916,074

Airport 

Train Station 

Source: Colliers International, 28 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekPrešov biurowy region / Industrial market DEVELOPERS AND INVESTORS – MARKET SHARE

BUSINESS SECTORS

Prešov region is considered to be a hub for logistics and distribution centres for the Western part of Slovakia (e.g. Ferrero Roche’s retail distribution centre). The regional 48% 52% city of Poprad includes some of the long-established manufacturing companies, e.g. white goods producer Whirlpool and lawn mowers producer GGP.

RENTAL RATES 0% 20% 40% 60% 80% 100% Effective rental rates for modern industrial spaces in Prešov region remain stable at €3.9 sqm/month for Chemako m seven prime warehouses and €3.8 sqm/month for prime logistics and industrial premises.

DEVELOPERS AND INVESTORS OPERATING IN THE MARKET

Prešov’s industrial market is largely dominated by two investors Chemako and m seven holding approximately equal parts of the market share – 48% and 52% respectively.

ADDITIONAL COMMENTS AND FORECASTS

We see further development of the industrial market in Prešov region based on the high interest from the investors’ side, currently searching for suitable plots (e.g. Panattoni, P3).

Source: Colliers International, 29 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

Industrial market KOŠICE REGION

Košice region is situated in the Southeastern part of Slovakia and is the second largest in terms of the population. The region, together with its capital city Košice, is an administrative, industrial, commercial, economic and cultural centre of eastern Slovakia. It POPULATION POPULATION borders Prešov and Banska Bystrica regions to the north KOŠICE KOŠICE REGION and west respectively, as well as shares a common border with Hungary and Ukraine. The region is 239,095 799,217 divided into 11 districts.Major advantages of the Košice region include industrial advancement, abundance of REGIONAL AVERAGE MONTHLY natural resources (talc, magnesite, limestone, while UNEMPLOYMENT RATE** GROSS SALARY salt), availability of building capacities for industrial, transport, housing construction, developed infrastructure, 8,1% €928 sufficiently qualified workforce, natural complexes STUDENTS STUDENTS (PART- and cultural heritage presenting opportunities for (FULL-TIME)* TIME)* tourism, high land and climate potential for agriculture in Východoslovenská nížina, international airport in the 16,210 1,647 capital city Košice, terminals of combined transport and GRADUATES (FULL- GRADUATES wide track providing non-transhipment transport to the TIME)* (PART-TIME*) eastern Europe. The regional capital Košice is the second largest city in Slovakia, as well as the centre of education, science, research and culture. Some of the main foreign 4,676 692 investors in the region include US Steel Košice, Embraco, Yazaki Wiring, Panasonic and T-Systems.The main HIGHER EDUCATIONAL regional sectors include metallurgy and chemical and INSTITUTIONS electrotechnical industries with metallurgy being the dominant led by the largest producer U.S. Steel Košice. 4

DEMOGRAPHICS

The majority of the working population in Košice region is employed in the industrial (26.5%), wholesale and retail trade (11.9%) and education (10.9%) sectors. Economic activity rate is equal to 56.5%. Among the economically active population in the region, residents with upper secondary education dominate. The highest unemployment rate (32.8%) is observed among the residents with basic education, and the lowest unemployment rate (5.1%) is recorded among those with university education. There are 4 higher educational institutions with 17 faculties in the region. The total number of students reaches almost 17,900 of which 91% are full-time and 9% are part-time. Almost 5,400 students graduated in 2017, of which 87% of graduates attended the course full-time and 13% - part-time.

*As for 2017, latest data set available **Q1 2019 Source: Colliers International, Statistical Office of the Slovak Republic 31 Main industrial markets in Slovakia RynekKošice biurowyregion / Industrial market BASIC DATA - H1 2019 SUPPLY (M2) NEW SUPPLY (M2) INVESTMENT INCENTIVES 69,796 - Maximum percentage of investment aid incentive in Košice Region in equal to 25%, however, the benchmark 2 can be increase by 10-20% if the recipient is an SME. VACANCY RATE (%) DEMAND (M ) Priority projects include industrial production, technology centers, shared cervices centers and tourism. In cases 0% - where the recipient meets the set requirements one of the following types of state aid can be applied for: RENTAL RATES a) income tax relief under a separate regulation; b) UNDER (€/SQM/MONTH) 2 subsidy for the acquisition of material and immaterial CONSTRUCTION (M ) PRIME WAREHOUSE assets; c) contribution for the creation of new jobs under a separate regulation. 12,830 3.8

INFRASTRUCTURE RENTAL RATES (€/SQM/MONTH) PRIME LOGISTICS & DISTRIBUTION Regional infrastructure is represented by the airport, railway and roads. The airport is located 10 minutes 3.7 away from the city centre of the regional capital. The railway has four main directions connecting Košice with Prešov, Lenartovce, Kalša and Hidasnémeti (Hu). The main roads connect Prešov via D1 motorway with Bratislava (450 km), Trenčín (335 km), Žilina (250 km) and Prešov(40 km). The other roads lead to Uzhgorod INFRASTRUCTURE IN THE REGION (KM) (UA) - (95 km) and Miskolc (HU) - (90 km). Roads CURRENT STATE

SUPPLY AND VACANCY Total 2,381,443 As at the end of H1 2019 regional stock of modern industrial premises in Košice equalled to 69,796 sqm. No Motorways 5,395 additional projects were completed during he first half of the year. There is one more project currently at the Expressways 26,468 stage of active construction.There are no vacant spaces Expressways available in the current developments in the region and 12,701 Feeders the vacancy rates stay at zero. 1st class roads 339,473 DEMAND

There were no deals recorded in the region during the 2nd class roads 583,239 first half of the year. 3rd class roads 1,414,167

Airport 

Train Station 

Source: Colliers International, 32 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce RynekKošice biurowyregion / Industrial market DEVELOPERS AND INVESTORS – MARKET SHARE

BUSINESS SECTORS

The main business sectors in Košice region include steel 27% 73% production (US Steel) and automotive (Faurecia). Other industrial producers are represented by the numerous smaller companies. The same is true for the logistics players. 0% 20% 40% 60% 80% 100% RENTAL RATES Goodman International Immorent

Effective rental rates for modern industrial spaces in Košice Region remained stable at €3.8 sqm/month for prime warehouses and €3.7 sqm/month for prime logistics and industrial premises.

DEVELOPERS AND INVESTORS OPERATING IN THE MARKET

The market is dominated by international developers and investors. The largest owners in terms of the total existing industrial space are Immorent (73%) and Goodman International (27%).

ADDITIONAL COMMENTS AND FORECASTS

Košice regions remains attractive for industrial developers and investors. New projects are mainly concentrated around the airport area, where new competition is actively seeking to enter automotive supply chain market.

Source: Colliers International, 33 NajwiększeMain industrial rynki markets biurowe in wSlovakia Polsce

CONTACTS:

Tamila Nussupbekova Associate | Slovakia Research +421 2 59 980 981 [email protected]

Richard Urvay Managing Director +421 2 59 980 980 [email protected]

Copyright © 2019 Colliers International. Colliers International The information contained herein has been obtained from sources deemed Twin City Tower reliable. While every reasonable effort has been made to ensure its accuracy, we Mlynské Nivy 10 cannot guarantee it. No resposibility is assumed for any inaccuracies. Readers are Bratislava encouraged to consult their profesional advisors prior to acting on any of the material contained in this report. Research & Consultancy