The rising middle class in Bratislava craves new apartments

Finnish values are in high esteem in Slovakia. Interest in new apartments is rising hand in hand with the growing economy.

Five years ago, YIT acquired the Reding construction company in Slovakia. At the same time, the direction of the construction company with a good reputation was focused more on own housing and real estate development. It was the right move, as the company was rewarded as the construction company and real estate developer of the year already in 2014.

Slovakia is among the fastest-developing countries in the European Union. Industry is the most important business segment of the Slovakian economy, accounting for approximately one fourth of the economy. The country’s economy has also grown thanks to the international automotive industry. Škodas, VW Touaregs, Porsche Cayennes and Audi Q7s are manufactured at least partly in the country’s capital Bratislava, among others.

“Slovakia has a far-reaching common history with the Czech Republic, but the countries and their cultures are different. Slovaks are more merchants and Czechs engineers,” Tom Sandvik describes the difference. Sandvik is the head of the Baltic and Central Eastern Europe division.

Preferably to a new home

The economic growth is reflected in the housing market. The capital, Bratislava, is a city of approximately half a million residents. One fourth of them live in apartment buildings in an old mega-suburb, Petržalka City. Even though almost all of the buildings constructed during the socialist regime have been renovated to meet current requirements, these is a lot of demand for new and modern homes.

“After the 1989 velvet revolution, people wanted to live in satellite villages, but it is not an interesting option anymore. People want their children to go to good schools and have good recreational opportunities. In addition, long commutes take time from the family,” says Milan Murcko, CEO of YIT Reding.

YIT Reding sold almost 200 apartments in the Bratislava area in 2014. Reasonably priced apartments with a floor area of 45–65 square metres are the best-selling article in Bratislava. Open-plan kitchens have long been popular in the finishes of homes. In the Central European style, the apartments are otherwise completely finished, but the customer brings in the kitchen furniture.

Bratislavans also want either a balcony or a terrace in their homes.

“We have mild winters and hot summers, so it is not worthwhile to even offer an apartment without a balcony or a terrace to customers,” Murcko says.

Everywhere by car

Bratislava is located only under an hour’s drive from Vienna. The cities make up an interesting and developing labour market region.

Cars and parking are in fact a major challenge to Bratislava. Even short distances are preferably travelled by car in the city. At the beginning of the year, the requirement was still 1.7 parking places per apartment.

“That was a lot and increased the prices of apartments. Fortunately, the legislation has been made more moderate for new sites. The city is looking for opportunities to reduce the traffic volumes in the city centre by decreasing the number of parking places and building park and ride facilities for public transport, among other means,” Murcko says.

To counterbalance motoring, cycling is an emerging trend in the city, and the city is building the infrastructure for cyclists.

Finnish name implies good construction quality

YIT has four new projects in Bratislava. They have Finnish names:

Tarjanne, Villinki, Kivikko and Tammi. Finnish names have turned out to be excellent marketing methods. They reflect Finnish values, good design, education and an equal society.

YIT’s homes address somewhat wealthier and older people, who find these values attractive.

“We stand out from other developers with our Finnish names. Here, Finnish names also imply flexibility, healthy living, reliability and good architecture. We are not the cheapest option, but we offer high quality and also want to stand out from the competition through customer service,” Sandvik says.

Area development in the old city

Bratislava has a beautiful and small old city. An historic, forgotten brewery quarter is located next to it. YIT will commence major area development work in the quarter in autumn 2015. In addition to the building to be preserved, there will be commercial space and some 450 apartments built by YIT. The project will last several years.

“There were long discussions with the residents and decision-makers on protecting the quarter. Ultimately, it was decided to protect the part considered the most valuable and demolish the rest of the quarter. We highlighted that the reform is in the interest of the residents and that the new quarter will be open to all Bratislavans,” Murcko says.

Bratislava is the main market area of YIT Reding, but the company is interested in other Slovakian cities as well.

“We continuously monitor the development of the housing market in the major cities, such as Kosice, Nitra and Zilina. However, so far they have not been interesting enough for us to expand into. There will be enough work in Bratislava for a long time,” Murcko sums up.

For more information, contact Tom Sandvik, head of the Baltic countries and Central Eastern Europe division, tel. +358 (0)400 617 807, tom.sandvik@yit.fi

Four projects in Bratislava

Tarjanne has a total of 143 apartments in seven buildings. The floor areas of the apartments range from 50 to 182.90 square metres, and every apartment has a terrace or a balcony. Tarjanne is a low-energy building, and solar panels on its roof heat the water.

Villinki showcases new and bold architecture. In addition, the apartments offer magnificent views over the Danube valley. Its four buildings have a total of 64 apartments ranging from 55 to 146 square metres. The project is a low-energy building. CIJ nominated it the residential project of 2014.

Kivikko is YIT Reding’s site for younger people looking for more affordable homes. The project comprises three 7–8-storey buildings. Kivikko won the Ministry of Construction’s award for small and affordable housing. The recognition was awarded to a private construction company for the first time. The third and final phase of the project is due for completion in 2016.

Tammi was designed to offer flexible family homes and services for families with children. A hundred apartments will be completed in the first phase during 2015. 85 more apartments will be completed during 2017.

Republic of Slovakia

Slovakia has a far-reaching common history with Hungary, the Czech Republic and Bohemia. It has been part of Czechoslovakia twice, in 1918–1939 and 1945–1993. In 1969, Czechoslovakia was divided in two parts, Czech and Slovak Socialist Republics. The country embraced democracy with the November 1989 “velvet revolution”. In 1993, both socialist republics became independent states.

Slovakia succeeded in the migration from planned economy to market economy. Low taxation and logistically favourable location in the middle of Europe make it very interesting for a number of industries.

Slovakia has approximately 5.4 million citizens.The capital is Bratislava, located on the banks of the River Danube.