The credit crunch, and the chances of it inflicting major damage on Central Europe's property markets, was the underlying theme for CEDES 2008. Nearly 300 property professionals filled the Radisson SAS Carlton Hotel in central Bratislava on April 16 for the fourth edition of this international real estate conference. While the program featured a wide range of panels with major local and international players, the financial chaos to the West crept into each of the discussions.

Panelists in the discussion on huge suburban Bratislava projects demonstrated how their projects will serve to expand the reach of the city, providing alternative places for people to work, shop, spend leisure time, and to live. Moderated by Tomáš Krčula, managing director of Colliers International Slovakia, the panel featured the players behind some of the biggest projects currently being developed around the Slovak capital: Štefan Beleš (Cresco Group), Vladimír Kozár (Hrivis Group), Juraj Šaštinský (Penta Investments) and Joseph Schmidt (CEPIT).
Beleš, whose company Cresco Group is working on a huge residential estate called South Town, said that while he expected demand for housing to remain strong in Bratislava, banks were already beginning to take a more cautious approach in their funding of developers. Šaštinský (Penta Investments) made a similar point, noting that banks take a good deal more convincing about the chances for success of projects.
Kozár of Hrivis Group expressed his hope that the American example would serve as a warning to European mortgage lenders. He picked out a silver lining from the stormy economic clouds, however, saying that the pickier banks became about lending on projects, the fewer highly-leverage pseudo-developers would remain on the market.

Slovakia's underachievement on the hotel front was the topic of another morning panel, brought together by Stewart Coggans, director of Cushman & Wakefield Hospitality in Prague. The other speakers on this strong panel were Eric Assimakopoulos (Bifrost Investment Group), Attila Hegedüs (Horwath HTL), Marcel Lindt (Orco Property Group), and Clemens Schranz (Raiffeisen evolution project development).
The entire group agreed that the existing hotels in Bratislava would feel the pinch as new ones come online in the city. Assimakopoulos, however, said that in the long-run the whole sector would benefit, as it would eventually make it possible for larger types of events to take place in the city. “The bottom line is there's no place to host it in a hotel here,” he said, adding that his company (which owns the Radisson SAS Carlton) was currently working to double the conference facilities in its hotels.

The residential panel focused on the prospects for improving the quality of projects that end up coming to the market. Moderated by Olga Humlová of Salans, the point that came up repeatedly was that Slovaks are becoming far more sophisticated in their approach to buying apartments. This will ultimately put pressure upon developers to deliver a higher standard of product. Mike de Mug of Ballymore Properties said that the most dramatic impact of the current financial crisis is that the waves of British-based buyers of flats in Bratislava have dried up with incredible speed. They buy-to-flip market, he claims, is gone, but those developers focusing on local customers won’t be hurt.
Jason Cahill of Orco Property Group held out the hope that crisis could be averted, since across the region, banks had been far more conservative with their mortgage lending policies than their Western counterparts. Developers, however, were being forced to provide more pre-sales to banks in order to get funding. However, he said this could only go so far, because “the banks have to loan money or they can't survive.” The other speakers on this panel were Roman Feranec (GRUNT) and Nora Tatárová (Slovany).

The day's final discussion took on the issue of the credit crisis head-on. The general consensus was that real estate transactions had slowed down dramatically for two connected reasons: first of all, there's no consensus on price, as vendors are unwilling to cave in to discounts which could prove excessive. The other reason, however, is a perceived shift in power in the direction of buyers, who are now more willing to take the due diligence process slowly and bring up technical issues that were brushed over just a year ago. The panelists were Frank Hildwein (Heitman), Matej Majerčák (CB Richard Ellis), Kristof Vanfleteren (Allfin Industry & Logistics) and Clare Vernon (PricewaterhouseCoopers Tax). The panel was moderated by Martin Bendík of the legal firm Wilson & Partners.

Roberts Publishing Media Group would like to thank all of the partners and participants at CEDES 2008 for making possible this successful event.