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Brdo Conference Discusses Foreign Investments Into Real Estate

Brdo pri Kranju, 14 September (STA) - A conference organised by the Public Agency for Entrepreneurship and Foreign Investments (JAPTI) and Slovenia Invest company explored at Brdo pri Kranju on Tuesday ways to develop real-estate projects and attract foreign institutional investors.

Representatives of Slovenia's leading construction development companies and banks attending the conference discussed legal and financial procedures, practicability studies and ways of securing investment partners.

Due to strong competition in the real-estate markets only interesting and top quality projects attract institutional investors, Matej Skocir of JAPTI said.

Nonetheless Slovenia has what foreign investors require: full EU membership, membership in the Schengen and eurozone and economic and politic stability. Its only shortcoming is its size, said manager of Slovenia Invest Jacqueline Stuart.

But even though Slovenia is interesting for foreign investors it still lags behind its neighbours, she added.

In the past five years three Austrian, two independent trust funds and an Australian trust fund invested in Slovenia, making five transactions worth a total of EUR 208m.

In the same period Croatia had 16 investments in the total value of EUR 775m, Hungary 88 transactions worth EUR 3.5bn and Austria 230 deals worth EUR 9.6bn.

Moreover, according to the CBRE international real estate services company there has been EUR 46bn worth of investments in the European real-estate market, none of which in Slovenia, Stuart added.

The problem lies in the fact that investors cannot find appropriate investment projects. While acquiring property for their own needs, companies are not investing much in commercial property projects.

Trust funds, banks and insurers, typical institutional investors, are reluctant to invest in residential real-estate or combinations of residential and commercial buildings and hotels that do not deal with business tourism, Stuart said.

Their interest lies in commercial buildings, commercial areas and logistics centres on good locations and most importantly, on selling the entire building as opposed to the common Slovenian practice of selling half and letting out the rest.

It is also important that companies looking for investors observe certain criteria, such as signing lease contracts for at least a five-year period and pegging them to inflation. If they aim to understand clients' needs and demands and develop suitable projects, Slovenia will gain more deals, the organisers believe.

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