Elsewhere: A New Heart for Bratislava

Eurovea International Trade Center, as the new riverfront district is known, will be one of the biggest developments of its kind in Central Europe when the first phase is completed in 2009. Occupying a 15-hectare site, the two-phase development will comprise more than 500,000 square meters of retail, leisure, office, hotel and residential space. Like Canary Wharf in London, to which it has been compared, Eurovea will be built on a former dockland site.

"Eurovea will more than double the total downtown retail offering in Bratislava," said Mike Demug, marketing director of developer Ballymore Properties Ltd. The closely held Irish company is investing ¤250 million in the first phase.

The first phase will comprise around 230,000 square meters of retail, leisure, office, hotel and residential space and is due to be completed by the second quarter of 2009. The second phase, which will begin once the first phase is almost finished, will total about 300,000 square meters of residential and office space. Ballymore plans to invest more than ¤250 million in the second phase, which could take as many as five years to complete, and which will be driven by demand, meaning the company is willing to build more offices or more residential space, depending on customer needs. Ballymore, which is working on 28 projects in Europe, including in Budapest and Prague, will retain ownership of Eurovea once it is complete, with the exception of the residential space, which it will sell.

"The urban part of the city was never developed all the way out to the river," Mr. Demug said. "The entire city is adjacent to the river and it's very rare to get a plot of land like this in a capital city."

That's a feeling echoed by others. "Developments of this size are few and far between [in Central Europe], which makes this an important one," said Jonathan Hallett, a partner at advisory firm Cushman & Wakefield Healey & Baker in Prague. (Other notable developments in Central Europe include ING Real Estate's mixed-use Zlote Tarasy, or "Golden Terraces," development in the center of Warsaw, comprising around 110,000 square meters.)

"There's a lot of interest in the project and I would expect there to be a lot of international tenants," Mr. Hallett said. Cushman & Wakefield is advising on the retail leasing.

Slovakia's healthy growth makes it an attractive investment market. Its gross domestic product is forecast to grow by 4.9% this year and 5.2% next year, according to Eurostat, the European Union's official statistics agency. This compares with 4.4% and 4.5%, respectively, in the same periods for Poland, and 4% and 4.2% for the Czech Republic.

The Slovak Share Index, the official index of the Bratislava Stock Exchange, closed at 467.70 points Tuesday, up 44% from the beginning of 2005 and more than doubling from the beginning of 2004.

In 2004, foreign direct investment totaled 28.69 billion Slovak korun (¤746.2 million), according to the Slovak Investment and Trade Development Agency, down 27% from 39.04 billion korun in 2003.

Eurovea will create around 3,250 jobs, according to Ballymore. An additional 3,500 are estimated to be employed during the construction phase.

That is a welcome boost to Slovakia, a country of 5.4 million people whose unemployment rate in July stood at 15.2%, according to Eurostat. The country has the second-highest unemployment rate in Europe, behind Poland with 17.6%. Slovakia's unemployment has fallen from 18.7% in 2004, partly as result of Slovakia's accession to the European Union in May 2004, which has lured investment.

The Bratislava region, home to Slovakia's biggest city and the most job opportunities, has a much lower unemployment rate, at about 3.1%, according to the Slovak Statistical Office.

Pribina Galleria, the project's retail district, is the architectural highlight. It will have three levels of shops, bars and restaurants, open-air but covered. An elegant curved glass building that bears a resemblance to London's "Gherkin" marks the entrance to the shopping area.

The building, the linchpin of the development, will be visible throughout Eurovea and will be lit up at night. "It is the 'lantern' lighting up Eurovea. ...I think this building will become a tourist attraction in its own right," said Marek Tryzybowicz, a partner at international architectural firm Bose International, which has designed the first phase of Eurovea in collaboration with Slovak architects ReSpect.

There also will be a public square -- in front of the new building of the Slovak National Theater -- that Ballymore is hoping will become a social focal point in town.

And the shopping center goes beyond shops. The first phase includes an eight-screen cinema, an IMAX theater, a fitness center and a casino. Slovak company Multikino Metropolis will operate the cinema.

"Eurovea has been a fascinating adventure," Mr. Tryzybowicz said. "We wanted to create an urban space that will become the commercial gravity point of Bratislava. We wanted it to be very diverse, much more than a shopping area. There will be bars and restaurants, so we hope this will create a vibrant night scene as well," he said.

The firm's biggest challenge, according to Mr. Tryzybowicz, was to come up with a design that would complement the environment in which it is being built. "It's like operating on a beating heart -- we have to be sensitive to the city, its structure and ambience," he said.

Residents of Bratislava welcome Eurovea as a source of jobs as well as an addition to the city's skyline.

"The planned development will be a boon for Bratislava, not only from an economic perspective -- more jobs -- but also from an aesthetic perspective, because the complex will make the whole area more attractive. The only negative is that the development has been delayed," said Jan Ilavsky, 47 years old, a university chemistry instructor in Bratislava.

Ballymore's Mr. Demug confirmed that the project had been slightly delayed by redesign work, though he declined to provide details.

Since Slovakia joined the EU, there has been an increase in the number of retailers entering the country -- such as U.K.-based Next Group PLC and Mothercare PLC -- spurred by the free flow of imports. Mothercare, which sells maternity and children's clothes, opened a store in the Aupark shopping center in Bratislava in August 2004.

"The reasons for going into Slovakia were twofold," said Hilary Grist, a spokeswoman for Mothercare. "Many of the local restrictions were lifted as Slovakia went into the EU in May 2004, making trading easier and duty rates lower."

The rise in new retailers entering the market also heralded a rise in warehouse-space leasing. According to Cushman & Wakefield, there were almost no warehouse-space leasings in Slovakia last year, but they have jumped to around 150,000 square meters this year. Office demand also has risen, Mr. Hallett said.

The Slovak government has been proactive in attracting foreign investment over the past few years and offers several incentives, he said, including a flat tax of 19% and capping the amount of social-security charges an employer must pay.

"This makes it more cost effective to set up a business in Slovakia than the Czech Republic, although the Czech Republic is looking to offer something similar from next year," Mr. Hallett said.