SLOVENIA Trends and Developments Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
larly dispersed with one quarter of the popula - tion owning or, in most cases, co-owning a small part of a forest. This causes hardship to effec - tive management of the forests and prevents Slovenia from fully exploiting the ecological and economic potential of this natural resource. The state is the largest owner of forests in Slovenia (followed by the Catholic church) and the state- owned company Slovenski državni gozdovi is at the forefront of consolidation efforts to improve the situation. Agricultural land has a similar story and back - ground. Traditionally, Slovenia is not a force in large-surface crop production but focuses on smaller farms, the management and further division of which is also regulated. Efforts are being made towards ecological and sustain - able farming, but the fragmentation of land in Slovenia was probably one of the main drivers for a Slovenian visionary deciding to go to Ser - bia to establish a 3,700-hectare farm: there he is proving that large-scale sustainable farming supported by technological advances can go hand-in-hand with modern living trends. Investment Environment On the investment side, the retail sector leads in terms of volume, followed by logistics. A nota - ble feature in 2024 is the growing use of sale- and-leaseback structures, which offer liquidity to owner-occupiers while allowing institutional investors to enter the market with reduced risk. Improvement of financing conditions due to eas - ing interest rates is noted, but lenders tend to remain selective, focusing on assets with strong fundamentals. Yields remain compressed in prime segments, although secondary assets with repositioning potential are drawing opportunistic capital. Slovenian assets remain within the field of interest for cross-border investors who view the market as a relatively secure environment
amid wider regional instability. Family offices and smaller private equity firms are also increasingly active, attracted by the manageable deal sizes and relatively low barriers to entry. Another trend gaining traction is the rise of impact investing within real estate, with funds targeting projects that deliver measurable social or environmental returns in addition to financial performance, par - ticularly in sectors such as affordable housing, energy-efficient retrofits and senior living. Legal Landscape and Trends Traditional bank financing is still the leading source of money for development and acquisi - tion of real estate properties of all types, but it is typically combined with equity participation. However, investing in various fund structures is gaining momentum and growing interest in prop - erty bonds seems to be a relevant legal devel - opment of particular relevance to real estate investors. These instruments allow developers to tap into debt capital markets to finance their projects, often offering real estate assets as col - lateral. Investors in all instruments typically require detailed security packages and rights of enforcement, and – in any modern-type invest - ment structure – legal advisers must pay more attention in structuring these arrangements to ensure security enforceability under Slovenian law. In light of this, legal practitioners are seeing increased demand for structuring advice, espe - cially regarding cross-border compliance, taxa - tion issues and the ranking of security interests. The importance of the latter will increase if this trend proves to reflect a broader shift from tradi - tional bank financing to more diversified capital sources. It is further expected that the regulatory environ - ment will need to evolve in the coming years to
923 CHAMBERS.COM
Powered by FlippingBook