Interview: Slovakia’s Logistics Market Slows in 2025, Eyes on Volvo Investment

Slovakia’s logistics market has cooled in 2025, with softening demand and higher vacancy rates reshaping the outlook for developers and tenants alike. According to Tomas Ostatník, Real Estate Executive at Holland & Company, the slowdown has become visible in both leasing volumes and construction activity.

The vacancy rate in industrial and logistics properties rose to just over six per cent in the second quarter of 2025 — the highest level in several years. Leasing activity was weaker than in previous periods, with about 103,000 sqm of space taken up, most of it new or pre-leases, and net take-up reaching around 73,000 sqm.

“Developers still have projects in the pipeline — roughly 318,000 sqm are under construction — but many of these were launched earlier as speculative builds,” Ostatník said. “Incentives are becoming more common in lease negotiations. Headline rents remain around €5.50 per sqm per month and €8.50 in prime locations, but landlords are more flexible, offering rent-free periods or other concessions.”

The market has seen some new activity, such as a recently completed facility in Brnolákovo for online retailer Alza, but this move is expected to leave behind vacant space in the Senec area, traditionally one of Slovakia’s busiest hubs. With more incentives now being offered to retain tenants, Senec is feeling pressure on rents. By comparison, neighbouring countries have enjoyed more momentum. Poland and the Czech Republic continue to attract the bulk of large-scale demand, while Hungary has also secured projects that might once have looked to Slovakia.

Looking ahead, a key development for the sector is the planned Volvo plant near Košice. The carmaker’s factory, now expected to begin production in early 2027 after a one-year delay, will also assemble the Polestar 7. “Several suppliers are already preparing sites nearby, and we expect more once contracts are finalised,” Ostatník noted, adding that investors such as IAD Investments are already involved in projects around the area. The plant could be a long-term boost for eastern Slovakia, a region that has traditionally lagged behind the west in terms of logistics activity.

While sustainability and ESG standards are increasingly integrated into development, cost considerations remain dominant for tenants. “Most occupiers want modern space and they welcome features like energy efficiency, but there is little evidence of them paying a premium for ESG-certified buildings,” Ostatník said. He expects stronger incentives or supply-chain pressure would be required to accelerate adoption.

On the macroeconomic side, construction costs have stabilised after sharp increases in recent years, which may support future projects. However, investment decisions remain cautious. Slovakia’s location makes it an attractive logistics hub within Central Europe, yet investors frequently compare it to Poland or the Czech Republic, where markets are larger and often better supported by state policies.

Geopolitics also looms large over the sector’s outlook. “Much depends on developments in Ukraine,” Ostatník said. “If reconstruction gathers momentum, Slovakia, along with Poland and Hungary, could benefit from demand for warehousing close to the border. For now, though, we are in a holding pattern — the fundamentals are strong, but growth has slowed compared to the past five years.”

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