Real Estate Today
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SREALE RESTABTE TODAIAY 2015 CONTENTS Contents 04,05 SERBIA AT A GLANCE 06,07 ECONOMY 08,09,10 EDUCATION 11 MOTIVATION PLATFORM 12,13 ACQUISITION OF REAL ESTATE 14,15 SERBIA OFFICE MARKET 16,17 BELGRADE SUBMARKETS 18,19 NEW TRENDS IN OFFICE SPACES 20,21,22 RETAIL MARKET 23 RETAIL WAREHOUSE MARKET 24,25,26 RESIDENTIAL MARKET 27 RESIDENTIAL LEASE 28 INDUSTRIAL MARKET 29 LAND 30,31 HOTEL MARKET 32,33 INVESTMENT MARKET 34,35,36,37 TAXATION ON REAL ESTATE IN SERBIA 38,39 CONTACT 40 MARKET PRACTICE 01 FOREWORD Dragan Radulovic, Managing Director No. 1 real estate consultancy in Serbia 4 years in a row market leaders 60% share in the office market Representing over 150 tenant companies Around 30,000 sq m office transactions in 2014 With the very active first half of the year and known brands are currently putting a lot of effort announced projects by key international developers trying to secure the position within the existing some being already present, the others just shopping schemes, especially in larger cities like watching for the opportunity to enter, we could be Belgrade, Nis and Novi Sad. CBRE Group Inc. CBS International is the part of the CBRE optimistic when it comes to the year 2015. Residential market has for the past two years Affiliate Network, the world's largest Serbian property market being as underdeveloped stabilized, both in terms of the sales prices and as § 70% of top Corporations choose CBRE commercial real estate services firm (in as it is, becomes more attractive for the developers, per the demand vs. supply ratio. Overall, the § First commercial real estate company in terms of 2014 revenue). CBRE network the Fortune 500 has over 370 offices in more than 60 seeing the present moment as most favourable, demand has been picking up from the second half countries throughout the world and especially having in mind the absence of the of 2013, and the well-defined residential concepts § Named as one of the 100 fastest construction activity in the last couple of years at key city locations, sell out within one year from growing companies by Fortune employ approximately 52,000 employees: experts in every imaginable throughout all industry sectors, causing significant the end of construction. lack of quality stock available. Those that will move § Named global No.1 in 2014 aspect of real estate, from agency and Industrial sector has been for quite some time Euromoney Awards timely may expect first mover advantage after the valuation to asset management and out of a proper focus and serious interest of full recovery of the market. § Named Lipsey Leading Global Brand investment. international companies in need for such in Commercial Real Estate Office segment, presently marks the lowest capacities, but the situation here is changing for 14 years running CBS International is the leading real estate company in Serbia. The office vacancy rate for the past four years, equaling just a quarterly. Real activity with several announced big § The only commercial real estate services today counts 45 professionals and dot below 8%, which means almost no or very size projects is about to happen almost next year. firm to be included in the S&P 500 index offers variety of services: limited choice of available modern office space. To Even with such development Serbia will be put it simple, the companies thinking of expansion massively lagging behind other countries in the CBS International § Valuation Advisory in short-to-mid-term might be facing a real region in short-to-mid-term, nevertheless § Part of the CBRE Affiliate Network Office Agency challenge of finding adequate space, as at the geographical position gives us advantage which is § Retail Agency moment only few office buildings may yet to be exploited. § The largest commercial real estate § Residential & accommodate requests of 1,000+ sq m as a whole. With all that said, some of the major foreign services firm in Serbia in terms of Mixed-use Sales & Leasing As a result, larger tenants looking for more revenue in the past four years § Market Research developers are confidently unfolding marketing sophisticated space are starting to seek for the § Industrial & Logistics and sales strategies for their long announced § Accounting for around 60% of all built to suit options or to anchor some of the § Land Agency projects, which at this moment represents strong lease acquisitions in the market announced pipeline projects. realized by real estate agencies § Project Management encouragement for the next year, while the § Facility Management Retail Market, stands an immense investment property market has been seriously investigated by § ISO 9001:2008 Certified by SGS, § Property Management potential, being one of the most underdeveloped some of the developers that have not been the global leader in certification § Marketing and quality control segments compared to the region, and can be present in Serbia in the past decade, most of them denoted by the opportunity for both the retailers coming from the Middle East, Asia and the UK. § Recognized RICS certified valuers of key international and domestic and the developers. Hence, having all of the above in mind, it is definitely not too early to be optimistic. banks, entitled to evaluate 2 million city - 3 western type shopping centers, no properties with no value limitation need to elaborate more. Retail is one of the most All the best, § Awarded The Employer of the Year active segments out of Belgrade as well, with Dragan in the category Small and Medium numerous present and pipeline retail parks Enterprises - Serbian Association of throughout Serbia. In addition, a couple of globally Managers, 2014 Annual Award 02 03 SERBIA AT A GLANCE Subotica Position: Situated in the south- FACTS THE LARGEST CITIES IN SERBIA eastern Europe, in the centre of the Serbia is the largest country in this part of Europe, > 1.5 million inhabitants Balkan Peninsula, Serbia is on the both in size and population. 150,000 – 350,000 inhabitants Serbia at a Glance geographic borderline between the Novi Sad Population: 7,186,862 Zrenjanin 100,000 – 150,000 inhabitants East and West. It borders the EU at Surface: 88,361 sq km the Hungarian, Bulgarian, Romanian Capital: Belgrade (1,659,440 inhabitants) Pancevo and Croatian state lines, while Time Zone: Central European Time (GMT + 01:00) Sabac CITY POPULATION offering the benefits of working Currency: Dinar (RSD) Belgrade Beogr ad 1,659,440 outside the EU. Smederevo No vi Sad 341,625 Pan European Corridors: Serbian Climate: Serbian climate may be Nis 260,237 territory lies at the intersection of two considered as a moderate continental Kragujevac Kr aguje vac 179,417 Cacak important European Corridors, 7 – on the north, and a more Adriatic Lesk o vac 144,206 Kraljevo the River Danube and 10 – the climate in the south. The average Subotica 141,554 Krusevac international highway and railroad, temperature levels during winter Kruse vac 128,752 Nis providing excellent connections with range between 0-5°C, while the Kr alje vo 125,488 Pance vo 123,414 Western Europe and the Middle East. temperatures in summer vary from Zr enjanin 123,362 In terms of the infrastructure 25-30°C. Springs and autumns are Leskovac Novi Pazar Sabac 115,884 developments, the Corridor 11 that very pleasant with temperatures Cacak 115,337 connects Belgrade with Montenegrin ranging between 15°C and 25°C. Pristina Smeder e vo 108,209 coast is currently under construction. No vi Pazar 100,410 Source: Statistical Office of the Republic of Serbia, Census 2011 CORRIDOR 7 CORRIDOR 10 EU INTEGRATIONS Oslo, 2252 Stockholm, 2269 Moscow, 2220 Copenhagen, 1691 Membership in the EU is the strategic goal of Serbia. It has been at the forefront of all Warsaw, 1044 governments since the democratic changes. Berlin, 1229 Amsterdam, 1736 Brisel, 1682 Prague, 833 Stabilization and Association Agreement, a precursor to EU membership, was signed in London, 2045 Bratislava, 567 2008 and entered into force in 2013 after ratification of all member countries. Viena, 600 Budapest, 369 Paris, 1.788 Bern, 1365 Formal EU accession negotiations with Serbia began in January 2014 with first chapters Bucharest, 614 to be opened on financial regulation and rule of law. Serbian government has set a goal to enter the EU in 2020. Up to 3hrs Sofia, 379 London Up to 2hrs The EU accession path will lead Serbia into more reforms and alignment with the EU Moscow Berlin Up to 1hr Istanbul, 947 standards and regulations. EU is Serbia’s historical and natural most important trade Stockholm Duserdolf Bucharest Frankfurt Istanbul Amsterdam Rome, 1261 partner, so the market will drive towards the harmonization with the EU as well as the Kiev Ljubljana official policy that is on this course. Milan Rome Munich Vienna 04 Paris Zurich Atina, 1.043 05 Prague Tivat ECONOMY Since the democratic changes in 2000 Serbian economy has gone through a transition process. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 This led to massive privatization of state owned companies, as well as substantial foreign investments. GDP growth rate (%) 5.4 3.6 5.4 3.8 -3.5 1.0 1.6 -1.5 2.5 -1.8 Main drivers of the economy are industrial production, agriculture/food production and exports. Despite the world economic crisis, the Serbian exports have seen continuous growth in the past several years, Unemployment rate (%) 20.8 20.9 18.1 14.0 16.6 19.2 23.7 22.4 20.1 18.9 going up 30% in 2013 alone. Value of exports now covers 75% of the value of imports. FDI (€ million) 1,303 4,234 2,848 2,434 1,810 1,139 2,236 239 750 1,236 Economy Main trade partners are EU countries, namely Germany, Italy and Austria, as well as the Russian federation.