Last December Sky Europe began flying to "Poprad-Zakopane", which is a little confusing – not least because the two towns are in different countries. In fact, the airline flies to Poprad in eastern Slovakia, while Zakopane is 40 miles northwest across the mountainous border in Poland. Not surprisingly for such an unusual route, several of the first passengers on board this new flight were property investors aiming to cash in on new flights to a previously inaccessible part of Central Europe.
Their hope is that Poprad, a town just south of the High Tatras – part of the Carpathian mountain chain that begins in the west of Slovakia crossing into the south of Poland, then carrying on south-eastwards into Ukraine and Romania – could become a second-home holiday destination. With other parts of central Europe now "discovered", here was an opportunity to be ahead of other savvy investors casting their eyes towards lesser-known parts of the batch of new European Union countries that joined in May 2004.
And it looks a solid choice. Poprad is close to several High Tatras ski resorts suited to beginners and intermediates (but not advanced), and is close to some spectacular mountain scenery that attracts thousands of hikers and mountain bikers each summer. Parts of the city – which has a population of 56,000 – date from the 16th century, and there are several interesting towns nearby with medieval fortifications. And a 40-minute drive away there is the spectacular 13th-century Spis Castle, a Unesco World Heritage Site and one of Slovakia's biggest tourist attractions.
In town, there are plenty of restaurants, clubs and bars, enough to keep most people entertained over a long weekend – even stag and hen groups. There is also Aqua City, a superb geothermal spa resort with big ambitions and an Olympic-sized pool, geothermal-spring tubs, steam rooms, saunas, solariums, gyms and massage rooms. It is the largest of its type in the world and is owned by Jan Telensky, a former Czech dissident-turned-millionaire-entrepreneur. He married a Poprad woman and then stumbled across the city's heated water during a visit to the in-laws in 2002. The water had been overlooked until then, mainly because authorities had been so disappointed that drilling had not led to the discovery of gas that they had not considered its economic opportunities.
Aqua City has rooms from £48 a night including use of the pools and steam rooms. Other options include the three-star Hotel Satel in the city centre with a health centre and nightclub, from £25 a night, and three-star Hotel Poprad, also central with rooms from £25. Car hire is recommended – getting about is easy as there are good local maps – with Hertz bookings costing from £35 a day.
However it's not just second-home investors who are moving in. Multinational companies are increasingly thinking of locating in Poprad – particularly as skilled labour is running short in Bratislava, where several major car manufacturers including Kia, Peugeot, Ford, Hyundai and Citroen have already set up factories, making Slovakia an increasingly important car manufacturer in Europe. On the back of car production in the west of Slovakia, the country attracted £1.5 billion in foreign investment in 2005 (about twice the amount in 2004), prompting the World Bank to describe Slovakia in a recent report as having one of the fastest transforming business environments in the world.
Corporate taxes are low across Slovakia at just 19 per cent – one of the big reasons for the Bratislava boom – but Poprad is starting to make good sense as an alternative to the capital. The city council is creating industrial parks and encouraging hotel developers to regenerate wasteland near the city centre. There are plans for a five-star property with a big conference hall, with excellent views across the High Tatras (which stick up like shark teeth from a flat plain) by the end of 2007. The workforce is well educated and wages are low, even in comparison with the rest of Poland where factory workers can expect to earn a fifth of what they would earn in the UK.
Schools in Poprad are strong on engineering and there are several successful factories already established. The biggest is Whirlpool, which has its main European washing-machine plant on the northeast side of the city, producing two million units per year. Close by is a major train carriage manufacturer. There are several components plants, mainly producing parts for Whirlpool. And GGP, the garden equipment producer, will open a lawn mower factory in September 2006.
Unemployment stands at 10 per cent, compared with the national average of 17 per cent. But mayor Anton Danko told Business Traveller that he expects this to fall to around five per cent when a new industrial park opens next year. "The old days of the communist ways of thinking in Poprad have long gone," said Danko, who is a former player in Slovakia's popular ice hockey league (the local team attracts sell-out crowds and has recently been top of the league).
He added: "Some people in the older generations may look backwards, but their children don't. In fact, their children are bringing them along, helping them to understand the new way of things."
This new way includes giant shopping malls that would not look out of place in Kent, a Tesco, multi-screen cinemas, pizzerias, bars selling Western drinks (including, almost inevitably, an Irish Pub), among much else. A McDonald's is coming soon. A new traffic system with "revolutionary roundabouts" (unheard of in the old days apparently) has been introduced over the past three years, reducing congestion. And on the streets it is clear that Ladas are a dying breed, with Mercedes, Volkswagens and BMWs now taking their place.
But what about property investment opportunities? Malcolm and Katja Shelton-Culham moved from East Anglia to a village just outside Poprad in May 2004. They spent £85,000 on a six-bedroom villa with a sauna, pool room, bar, two garages and a large garden. They recently had it valued by their bank at £230,000. They have been so impressed by the mini-property boom that they have bought several apartments which they are now selling on from about £34,000 for two-bedroom flats and £45,000 for three-bedrooms.
They have also formed a company called Premier Manazment which offers legal assistance and property help with property searches. Katja is Slovakian and speaks the language fluently. She said: "Slovakia is the place to invest right now – it's on a definite upward curve, more so here than around Bratislava, because few people have looked into it. When you look at Central Europe as a whole, you've got Romania, where the prices are English prices – just ridiculous. The Czech Republic's already been discovered. Prices in Poland are getting cheeky. The Hungarians don't seem to be encouraging investors. After Slovakia, I guess you've got the Ukraine, but I've heard of people getting ripped off there."
Biondi Errico is the former director of Whirlpool's washing machine factory, which opened in 1993. He is now behind the up-and-coming Poprad plant of GGP, the lawn mower manufacturer, which is already the biggest seller in Nordic countries. He said: "In Bratislava there is so much traffic, so much mess. Bratislava is the most expensive part of Slovakia. And you just don't find the people there – you struggle to find a secretary. Here you have the people. We also have good local suppliers of parts [mainly thanks to the component companies supplying Whirlpool]. We've also now got international flights – and that is a very important step forward."
Errico would like more regular flights. Sky Europe currently flies from Stansted twice a week on Wednesday and Saturday. There are no flights between Poprad and Bratislava, which means either a four-hour drive or a slightly shorter train journey.
Much of the tourist potential of Poprad rests on the success of Aqua City. It is currently completing a second phase of development that will double its rooms to 100 – work will be completed by the end of April. The following winter, work will start on 200 or so further rooms, plus a vastly enlarged bathing area and even a giant tropical garden with Eden Project-style bubbles – the Eden Project designers are being consulted. The ambitious third phase will be completed in 2008, making Aqua City "the best geothermal resort in the world", according to Jan Telensky, who is investing £30 million and who hopes to have 10,000-15,000 people visiting each day. Already 5,000 people a day, mainly locals or people crossing the border from Poland, come during the summer.
"Slovakia is the fastest growing country in Europe," said Telensky. "Things are changing fast. There are fixed rate taxes of 19 per cent which are easy to administer. And there are lots of people available and keen to work."
He aims to make Aqua City almost totally self-sufficient using geothermal water and solar panels, as well as by constructing wind turbines on land outside Poprad. "I'm pumping all the money I'm saving into investing in the resort."
Cheap nightlife, Aqua City and the ski resorts aside – a lift pass and ski hire is about £20 a day – Poprad does not offer a huge amount to attract tourists. There are industrial parts of the city and huge Soviet-style estates that will put off many. But for investors and weekend breakers with curiosity, it's definitely worth a look.
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