Despite nationwide testing and lockdowns, test positivity rate and the number of hospitalized patients surged at the turn of the year given heightened mobility of population during the holidays. As COVID-19 continues to trigger unprecedented Government response, the business environment must navigate through this unique playing field. According to the estimate of the National Bank of Slovakia, Slovakia’s GDP fell 5.7% last year, while according to the estimate of the European Central Bank, the GDP of euro area as a whole fell 7.3%. The third quarter has seen a real GDP drop of 2.4% and a similar sentiment is expected at the year end. After an excellent third quarter, production, exports and turnovers fell slightly month-on-month. The adopted anti-pandemic measures have reflected in employment as well as in wages, the growth of which slowed down. Liquidity shortfalls in the private sector were sought to be replaced by external sources of finance which were more accessible due to the monetary policy measures and Government guarantees.
The year closed with the highest leasing activity in the last six quarters, reaching 65,400 sq m. While quarterly gross take-up grew by 5.5% year-on-year, total take-up in 2020 declined by almost 12% compared to 2019, reaching 175,900 sq m. Net take-up share was 72%, with consumer goods, professional services and public sector having the biggest share on net demand. Net absorption was positive, reaching more than 5,700 sq m.
Total commercial real estate investment amounted to EUR 502 million in 2020, a year-on-year decrease of 27%. The office sector reached a total transaction volume of EUR 183 million this year, and we expect an increase in investor interest in this segment upon the successful lease of several upcoming projects. Prime office yield increased in the first three quarters of 2020 by 50 basis points but remained at these levels since, with a neutral short-term outlook. Prime headline rent at 17 EUR / sq m / month has not changed during 2020 as landlords increasingly use rent free periods, fit-out contributions and other incentives to attract new tenants.