H1 2019 | Slovenia 1 Research and Forecast Report | Colliers International

FORECAST REPORT FORECAST

BOSNIA HERZEGOVINAAND

2019 OVERVIEW & & 2020 OVERVIEW 2019 OVERVIEW MARKET

2019 | Bosnia and 2

Research and Forecast Report | Colliers International CONTENT

About Colliers About Market Residential Market Investment andLogistics Industrial Retail Office HTL Overview Economic Summary

Market

Market Market

Market

1 1 14 12 10 7 5 8 6 4 3

2019 | 3 Research and Forecast Report | Colliers International

. s and due due to the developer’s sector

remain the

several new expected to . ffice stock is

sector the industrial sector sector industrial the highest highest

The The o due to

. stock stock is Despite Despite low transparency, evelopment of CRE sector. sector. CRE of evelopment her her growth of tourism and increasing increasing activity in HTL in this segment this in e expect expect e

, s increase

Forecast

and and retail quently r in terms of new development remain the least active CRE least the CRE remain active

conse secto transactions. Development activity will strongest in residential highest demand and profitmargin Market Economic growth is set to continue in the following years. d further see we It is expected that the foreign largest investments, share as before, of will come from East. Middle the Office moderately announced projects expected to . remain concentrated in With industrial production failing to gain w momentum, to We expect furt

. most most in the

several several in both is is rising,

the snia snia and

, ently begun

are are still mainly

.

use. - transactions

has only rec

g g the positive trends emerging h investors and developers , while the he decreased industrial production production industrial decreased he

isin n

g dity. Due to strong demand, apartment Sarajevo, the capital city capital Sarajevo, the

proven difficult to obtain. New stock office sector emerging HTL and industrial sectors developments thoseolder brownfield of and consequential export of goods. Despite Despite goods. of export consequential and that, there are several new projects under area. metropolitan Sarajevo in construction was sector estate real Residential active sector in terms of development and liqui mostly trend, upward slight recorded prices in Investment market transparency and is yield still evidence has lacking Retail sector, on the other hand with bot reco from increased private consumption and rising wages. Sarajevo is experiencing a new wave of construction, with many new projects under construction pipeline. or in the the taking are sector logistics and Industrial t of brunt Due to strong tourist results, the HTL sector HTL the results, tourist strong to Due is experiencing increased investor developer interest, and confirmed by recent hotel developments. 2019 attracted many international chain brands which are entering secondary markets in Bo Herzegovina, such as Banja . Luka and aOfficemarket stagnation, experiencingis however there are new projects mixed ofpipeline, albeit in the Recenttrends

UMMARY

S 4

2019 | Bosnia and Herzegovina Research and Forecast Report | Colliers International ECONOMIC OVERVIEW

Summary niie by inhibited movement upward with average, EU the of 25% around at are incomes Average fromprivatelow business. demand of symptomatic is which growth, credit large few a and support IMF/EU on dependent Inves information. portfolios d well lending consumer or commercial expand not are they however, consumption growth fragile. Banks are keep well pressures an budget growth productivity to slow due income private on Constraints to started from public benefit sustained investment. tourism including sectors prices, producer accompanie 2019, 3.1 pac slower a inGDP Real public by implementation driven infrastructure term, the over further medium up pick is to and expected Europe in turnaround the with recovering begun has activity Economic rem Herzegovina’s and Bosnia utltrl raiain, ih limited with organisations, multilateral other and IMF the from continued funding of flows on relies stability Currency the existing currency board arrangement. safeguarding bank central the with euro, administrative (BAM) pegg The remains marka and complexity. weak supply, infrastructure labour declining to due slow be to proved have flexibility market labour improve to place feeble productivity growth. Reforms put in e o ag non large to ue % is n gaul eoey path. recovery gradual a on ains - . scale projects with slow domestic domestic slow with projects scale

nutil rdcin elnd in declined production Industrial

and lack of credit assessment credit of lack and

e than in 2018, at a r a at 2018, in than e

2019 ih nmlyet and unemployment high netet oehr with together investment

of of reforms. structural

is expected to grow to expected is mns r mainly are tments while new service service new while b declining by d - efrig loans performing - implementing, - capitalised, - welfare d lcd to placed economy ed to the to ed

ate of ate

at

D got wl b spotd y easing by supported be will growth GDP 2%. towards t over recovers growth as and 2020 H1 in up pick to expected are prices Consumer FDI. and investment private in upturn gradual a recentbyformation the of a government and 2020 in year a 3.5% about at set E Forecast government finances. on policy dysfunctional and lenders multilateral to on due reliance high continued fairly remained risks Credit the finance ext to investment direct foreign sources. energy renewable the of expansion major a for are examples Chinese Good textiles. and c the beyond economy the widen the and exports improve could Emerging role of the regional energy supplier should and rates private investment.promote interest low mean will H rate. exchange th increases which isInflation forecast riseto slightly above 2%, neighbouring up.countries pick to forecast is continue to improve as exports to the EU which and deficit, external the worsening without output and expenditure re Fiscal expand of savings. ahead to investment allow should which inflows, aid other and EU with along support, IMF continued of terms in constraints, external e et w yas ifain hud return should inflation years, two next he ret ae f eas mciey tourism machinery, metals, of base urrent xpansion in GDP growth is expected to be to expected is growth GDP in xpansion ernal deficit. ernal -

backed coal facility along with plans aain il os overall boost will laxation

owever e

competitiveness ik f weaker a of risk ,

moderate inflation moderate

- 21, aided 21,

of - 2019 | Bosnia and Herzegovina 5 Research and Forecast Report | Colliers International

GDP & Inflation & GDP

2.6 7.2 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 731 2019 (11) 2019 6.5 2.3 704 2018 674 5.9 2.1 2017 Exports of services (€ bn) (€ services of Exports 664 2016 5.5 2.0 658 2015 5.3 1.9 CPI Inflation (%) Inflation CPI year) (% growth GDP Real population) of active (% rate unemployment Registered Export of goods (€ bn) (€ goods of Export 658 2014 1.8 5.0 5% 0%

659 40% 35% 30% 25% 20% 15% 10% 45% 2013 Unemployment (%) Unemployment

€3.0 bn €3.0 bn €2.0 bn €1.0 bn €0.0 €8.0 bn €8.0 bn €7.0 bn €6.0 bn €5.0 bn €4.0

, RATES AND RATES AND

; for StatisticsBiH;BiH of Economic planning Directory Figure| 2: Oxford Economics Figure| 3: Agency for Statistics BiH of

INFLATION

: : : 3 2 1 ources: ources: Figure 1:Agency S AVERAGE GROSS EARNINGS (€/month) Figure Figure Figure Figure EXPORTS OF GOODS AND SERVICES UNEMPLOYMENT FORECASTS Figure Figure GDP GROWTH, 6

2019 | Bosnia and Herzegovina Research and Forecast Report | Colliers International HTL MARKET

 constructionUnder   significant 2019 openings: segment. the sentiment o international number b witnessed as confidence, investor Continued pace. moderate will a at growth continue tourism the that expect We Forecast the hotel of share keys. a with market, the of 30% up make hotels Chain keys. hotel the of share 52% hotels, independent of up made is Current have years thewitnessed arrival of chain brands.hotel still recent although are operated, hotels Most Emirates. Arab from and arrivals in numerous most are tourists Domestic overnights tourist arrivals grew momentum is upward Herzegovina recording and Bosnia in Tourism Summary eu. h €0 ilo vnue was venture million €10 The venue. conditioning and preparation athlete an and various sports facilities, positioned as units 65 has O3 Hotel 4* new The 2020. re to set is Sarajevo near The former Hotel Feri on Igman room, a and units 123 Banja in July 4* facilities. andwellness spa two and gym as restaurant, a halls, well conference as units, 132 of consists aparthotel The September. in Sarajevo in opened Rotana by Arjaan Bosmal 4*

Courtyard by Mariott Hotel opened in opened Hotel Mariott by Courtyard uky Cota Cia n United and China , Turkey, ly, approx. 70% of the hotel market hotel the of approx.70% ly,

along with a gym and a restaurant.

of

around

overnights, f overnights, project

chain brands arrivals, confirm arrivals, brands chain

n n the positive outlook of Luka. The hotel consists of consists hotel The Luka.

11%,respectively. 156 s around

n t in -

esn conference person ollowed by ollowed

e ieie and pipeline he

12% and

independently - pn n April in open . Mountain n 2019, In

guests ih a with tourist

the y 48% this

   Pipeline 

grand ballroom. grand facilities extensiveleisure pool, swimming rooftop Ruža. Hotel is being constructed on the spot of former Mostar in April 2020. The 182 in hotel 5* first its open to set is Mariott €8.7 million. approx. worth is investment The and units reconstructed. The Mostar hotel will consist of 83 in Neretva Hotel historic The Sheik Al individual UAE by funded ... aaeo we b Turkish by owned Fatihbusinessman Kol. Sarajevo d.o.o. to be resolved in 2020. Developer is KOL administrative issues which are expected H 2016 since developed keys 56 with hotel Hilton 5* hold. was on aft continued slowly Project 2016. April in begun has City Ozone Buroj the on work The apartments. serviced with hotels more or one build to plans Buroj a building "tourist city" in Trnovo, close to is Development Property Dubai owever - ae pr based

, ,

742

is is construction was halted due to due was halted construction set to open in open 2021. summer setto , The h The

Source:klix.ba Source:klix.ba -

person congress hall and

pry eeoe, Buroj developer, operty - is currently being being currently is ae hg net high based otel will also feature a feature also will otel Qasimi.

, in

built in 1892 in built - room room hotel a been has Sarajevo. Sarajevo - worth r it er a .

2019 | Bosnia and Herzegovina 7 Research and Forecast Report | Colliers International

2 1 0 8 7 6 5 4 3 2019 2019

2018 2018 2017 2017 2016 2016 New hotels (rhs) hotels New 2015 2019 2015 Overnights 2014 2014 2018 Arrivals 2013 2013 New supply (keys) supply New 2012 2012 2011 2011 0 2010 0 0 500,000 80,000 60,000 40,000 20,000 500 400 300 200 100 600 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 4,000,000 200,000 180,000 160,000 140,000 120,000 100,000

&

StatisticsBiH of Figure| Sarajevo 5: Airport Statistics Figure| 6: Federal Ministry of Tourism and Environment

IN BOSNIA AND

Agency for : 4

: : : 6 5 4 HOTEL OPENINGS IN SARAJEVO (4* 5* AND HOTELS) Figure Figure NUMBER OF PASSENGERS AT SARAJEVO AIRPORT Figure Figure Sources: Figure OVERNIGHTS HERZEGOVINA Figure Figure TOURIST ARRIVALS 8

2019 | Bosnia and Herzegovina Research and Forecast Report | Colliers International OFFICE MARKET

 Pipeline suburban ranges €5areas between Sarajevo in rent monthly The €14 premises. office ‘B’ class for €13/m²/month around are €9 around and class ‘A’ for €18/m²/month rents monthly The office Sarajevo market V Rents opened 2019 in springthat of mixed 2019 in Sarajevo open that bank NLB e.g. building, own their build or buy to decide as often firms, insurance or such banks companies, Larger premises. constructed newly the to apartments moved and Tenants have demand. gap and supply the developments between reducing are new reconstructions Recent Demand 30%. remaining the for account ‘B+’ and ‘B’ class and 70% for accounts space office ‘A’ class (gross GLA in Sarajevo amounts to around 12 stock ‘B’ class and ‘A’ class office Current than more have which 100,000 residents. of all Mostar, and , , ( located is stock remaining The capital. the in offices companies international as non and governmental businesses, to due BiH is Sarajevo Supply cap the cny rate acancy presenting the new R Tower which which Tower instead R should rise up to 181 is new and the presenting Sarajevo in Tower radically Press changed the design Roto Avaz Investor - oenetl raiain, s well as organisations, governmental - s bsns ad eieta tower residential and business use and tl f eulk Spk entity), Srpska Republika of ital

in

the most most the leasable office area). Of this, this, Of area). office leasable ao cte lk Bna Luka Banja like cities major

s are at at are s Vacancy Rate rm dpe residential adapted from

e ter e bidn in building new their d

n Kl Oto Kula and

of of the announced Ski developed

class ‘A’ buildings m. It – below €9/m²/month. is is supposed to ,

. aig their basing

market in market

5

0 in 10% ka C45 C45 ka ,000 m² approx.

office

.

– –

  

yetunknown. Swiss Engineering. by owned Investments, Palace by developed being Sarajevo in Holiday Hotel near tower de MGT retail and segments. office residential, contain approx.8 us mixed two construct to plan they which after the buy to contract traction € a signed Infobip firm Croatian gained Municipality, greenfield a development Sarajevo, Šip, in park IT likely purpose, most office premises. commercial a serve will building lowest be the owns facility.dairy Milkos which Teloptic, is investor facility dairy Milkos 2020 con start to planned buildings, distinct four of consisting City Green ofc ad eieta bidns with buildings residential and office e eomn o a 22 a of velopment oty eieta, h fut and fourth the residential, mostly

- n 540 m 5,400 a on

Marija Green Tower , 500 500 m

GDAyet is as of unknown. Source:avaz.ba a , Start Start of construction is as of

supported Source: 2

GBA

4 mixed Although the use willuse Althoughthe struction in spring of spring in struction 2 ,

230 m 230

depo - n Sarajevo in plot . eitrd PET registered

-

lo mixed floor - y h Centar the by

s com use .ba

of – 2

a

land site land h former the greenfield greenfield 250,000 The .

- plex use use

on is is -

2019 | Bosnia and Herzegovina 9 Research and Forecast Report | Colliers International

Y warehouse - Industrial and Industrial O - 39% 26% 64% 30% - - - 128% Y

18/m² 13/m²

-

– <10% 125,000

Retail €9 €14 Statistics

2018 ) 2

2017 OFFICE MARKET OFFICE Office

32,810 53,960 35,116 15,399 42,699 Surface (m Surface

Agency for Statistics of BiH :

A SARAJEVO 2 | Figure| 9 similar

class class Hotels and Hotels in

Class A Monthly Rent Rent Monthly Class A Rent Monthly B Class Year 2018 2017 2016 2015 2014 Total stock in m in stock Total 0 0 m² Vacancy 20,000 m² 10,000 m² 90,000 m² 80,000 m² m² 70,000 m² 60,000 m² 50,000 40,000 m² 30,000 m² Average Average Average

Agency for Statistics of BiH :

PER ANNUM

(NET

olliers InternationalFigure | 8 MARKET IN BOSNIA AND : C

S 2019

: : : 9 8 7 RESIDENTIAL BUILDINGS - Y OFFICE Sources: Figure 7

COMPARISON OF COMPLETED NON BY SEGMENTS Figure Figure

BUILDING HERZEGOVINA (IN SQUARE METRES) Figure Figure COMPLETED OFFICE FIGURES EFFECTIVE RENTS) Figure Figure KE 10 2019 | Bosnia and Herzegovina

Research and Forecast Report | Colliers International RETAIL

MARKET General OverviewGeneral after be to continue centres High street locations and prime shopping malls)totals approx.(13 m². 150,000 like stock mall shopping overall The countries Croatia. neighbouring in per stock capita SC than less capita, 1,000 73,200 m² what translates approx. to amounts stock mall shopping stock and the Bosnia being located in Sarajevo. Contemporary of of most with cities Herzegovina, larger the in located is stock centre shopping modern segment, office the with case the is As DemandSupply and centre’s shopping the development. in million €70 approx. invested Delta developer m 62,000 approx. with largest Plane Delta The most significant opening shoppingdedicated centres. continues and market the on retailer biggest the remains Bingo with of brands. international arrival offering retail the improved have last the in stock large seen scale development modern of and has market centres shopping Bosnia Sarajevo of sector Herzegovina. retail the affected positively have season tourist record another and growth GDP as such indicators macroeconomic improved The premises. hpig centre shopping Source:poslovni.hr t

in , currently currently Luka, Banja in

eae Nw schemes New decade.

to build to the most sought most the

² . n h country, the in into 140 m² per

h Serbian The

in

2019 2019 was their own their

the -

 constructionUnder centre shopping each between varying €25/m² to €10 from The monthly weighted average rent ranges into trend motion positive a put have inflation, stagnant and incomes rising by enabled spending consumer of rise the however, Sarajevo higher. suffered from high vacancy rates for years, much is it malls other modern in malls rateshopping vacancy average The Rents    Pipeline 

n aaeo with Sarajevo, in m 21,600 d.o.o Bingo 200 million. es a mixed continuing development floors 39 and 34 three 29, with towers, residential and of commercial complex, consisting Centre Congress Sarajevo €5.2 million at inves The Sarajevo. in hotel Plaza Radon near centre shopping new a announced has Holding Capital is investment estimated The Sarajevo. in Ilidža in BiH, in centre shopping largest a of construction the announced has Delta developer Serbian €10.5 approx. million. at estimated The is works. project ground initial conducting m² 30,000 i Grad Novi in announced a three Belami Developer 2020. timated to be worth between €150 and€150 betweenworth betimated to ea set legal

and renewed tenant confidence

and

²

. The company is currently currently is company The . shopping centre in centre shopping

. - Vacancy Rate

back.

. rm ul i bidn a building is Tuzla from

s approx. is Srjv wt approx. with Sarajevo n

-

open story story shopping centre nx rm Brčko from onix h ivsmn is investment The tment is estimated is tment ,

, at n pand for planned ing

having resolved epciey is respectively,

€90 million. % wie in while 5%, Novi Grad Grad Novi

- . use use

2019 | Bosnia and Herzegovina

11 Research and Forecast Report | Colliers International

200 0 1,000 800 600 400

warehouse Industrial and Industrial

21.0/m²

– 5.0% 150,000 m² 150,000 €17.0 €17.0

BiH Retail

2018

2017 Office

SHOPPING CENTRE MARKET CENTRE SHOPPING

Shopping Centre stock m²/capita (right side) (right m²/capita stock Centre Shopping Monthly Rent Monthly SARAJEVO GBA (m²) GBA Prime SC Vacancy SC Prime Total stock (approx.) stock Total 0 Hotels and similar and Hotels Weighted Average Average Weighted 90,000 60,000 30,000 120,000 150,000 0 0 m² Prime Prime

40,000 m² 40,000 m² 30,000 m² 20,000 m² 10,000 90,000 m² 90,000 m² 80,000 m² 70,000 m² 60,000 m² 50,000 100,000 m² 100,000

-

: : : 12 11 10 Figure 10:Colliers International Figure| 11:Agency for StatisticsBiH of Figure | 12: Agency for Statistics of SHOPPING CENTRE Sources: SEGMENTS COMPARISON OF COMPLETED NON RESIDENTIAL BUILDINGS BY Figure Figure PER CAPITA IN MAJOR CITIES OF BOSNIA AND HERZEGOVINA Figure Figure SHOPPING CENTRE STOCK

MARKET H1 FIGURES 2019 Figure Figure KEY 12 2019 | Bosnia and Herzegovina

Research and Forecast Report | Colliers International INDUSTRIAL ANDLOGIS

  

Supply approx. €25 approx.€25 million. worth was investment The Sarajevo. in Bosnalijek opened a new 5,000 m million. worth €10 a opened D MostSanski GmbH cable German significant 2019 in manufacturing. decrease production in be 2019, specifically caused by also dampened might Demand processes. issues sale and However, development the legal both prolong and off. cadastral sold unsorted and privatised the former state era, which are to back dating some assets, distressed industries similar and textile furniture, automobile, build allocated are investments Most and less in dedicated logistics properties. facilities manufacturing and production which companies foreign invest inmostly is Demand steel and industry. energy manufacturing, in investments in the indu seen we’ve in development recently Nevertheless, operated. and constructed properties owner being to due mostly sector, CRE active least the is premises, constructed newly of terms in largest the although i The omestic omestic - to ndustrial - pnd 300 m 3,000 a opened suit suit manufacturing facilities in the

. There is still a large supply of supply large a still is There . and Demand

000 m 30,000 opn Srjvk Sarajevski company y h dcae f industrial of decease the by . coming

pro Source:agrobiz.hr this

and uto cmay HIK company duction

² etr u t rising to due sector rm oetc and domestic from

openings aiiy n Kreševo in facility stry oitc sector logistics

sector

²

now aiiy in facility

towards towards , mostly ² :

facility

being being TICS MARKET ,

    

will have will have 4,000 m and m 20,000 industrial a on zone Boca logistics in centres distinct distribution are two One building Express and Schenker DB constructionUnder might be domestic2019, investments in the sector during production industrial of slowdown southern border of the country. Due to the and northern the with Zenica and Mostar highway A1 citiesof and major the capital connecting the is critical Especially to overall crucial is investment Infrastructural Forecast e ivsos ht ae already span two of the years. have that committed investors new for expansion, announcing the arrival of 4 set is in “Celpak” zone Industrial facility.production €300,000, new a of construction approx. the announcing worth Sarajevo m 6,100 a bought has “Tako” mid m 4,500 should start in January 2020 and finish in have constru the and area manufacturing to planned is facility The facility. new a of opening the announced company, manufacturing Industrija alata , a domestic tools Tešanj. in centre m 5,000 new group, Man Pipeline million. combined investment is worth approx. €4 m 8,000 m 3,000 manipulation area area. Express One will have office of - n 2020 +Hummel

none te constr the announced ²

eeomn i ti sector this in development

lower than in the ² . of storage and office area, with area, office and storage of

o osrc ter aiiis in facilities their construct to

f aiuain ra The area. manipulation of ²

Gra manufacturing German , oitc ad distribution and logistics wt 800 m 8,000 with ,

²

of storage and 600 m ²

site. DB Schenker DB site.

previous uction of a a of uction ²

site near site

years. ²

² ction

of of 2 .

2019 | Bosnia and Herzegovina

13 Research and Forecast Report | Colliers International

2018 5.0 4.0 2017 warehouse Industrial and Industrial 15:Agency for Statistics BiH of 2016 4.7 3.8 2015 Retail 2014 3.7 4.3 2018 2013 Industrial Production (real growth in %) in growth (real Production Industrial 2012 2017 3.1 2.3 Office 2011 2010 3.3 1.6 similar 2009 Hotels and Hotels 2008 3.4 3.1 Real GDP growth (% year) (% growth GDP Real 0 0 m² 0 m² 60,000 m² 60,000 m² 50,000 m² 40,000 m² 30,000 m² 20,000 m² 10,000 90,000 m² 90,000 m² 80,000 m² 70,000 100,000 m² 100,000

0.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0%

80,000 m² 80,000 m² 60,000 m² 40,000 m² 20,000 120,000 m² 100,000 m² 140,000 m²

- 2018)

– NON INDUSTRIAL

(2008 : :

: 15 14 13 Figure 13:Agency for StatisticsBiH of Figure| 14:Agency for StatisticsBiH; of BiH Economic planning Directory | Figure ECONOMIC GROWTH

RESIDENTIAL BUILDINGS BY SEGMENTS Figure Figure COMPARISON OF COMPLETED AND Figure Figure INDUSTRIAL PRODUCTION Sources:

BUILDINGS AND WAREHOUSES IN THE PAST DECADE Figure Figure COMPLETED 14 2019 | Bosnia and Herzegovina

Research and Forecast Report | Colliers International INVESTMENT MARKET € MILLION ( HERZEGOVINA AND BOSNIA IN INVESTMENT F Figure Source: Figure 16: Foreign Investment Promotion Agency of Bosnia and Herzegovina and Bosnia of Agency Promotion Investment Foreign 16: Figure Source: OREIGN DIRECT DIRECT OREIGN 16 :

)

IN IN 2010   t Top prime for products. especially interest, strong to investor due position stronger a have sellers sectors, those In market. Sarajevo investor strong interest show segments Some years. s new of terms in development market that is reasons the of obtain. to hard evidence yield making The market continues to lack transparency, good of shortage on sale. product of result a as low mostly remained activity transactional The Summary

307 million. in sold Zenica was in hotel Resort Zenica Former a of single approx. €2 million €1.8 approx. for July in sold was property retail Agrokomerc Former

2011 ransaction , such as office and HTL sectors in sectors HTL and office as such , 357

, building building

350 2012 September 307

/m² tock only begun in recent in begun only tock .

s 2013 with 767 m². The property consists

in 2019 208

for approx. €1.2 approx. for 2014 415

2015

One 326

or

2016 market to comes stock quality the once increase transacti that believe We    we poete o NL portfolio NPL or offerings. properties government owned the of privatisation of further case in arise also may Opportunities yieldattractive opportunities. by drawn be could investors Newcomer exitinvestment.to the 316

Forecast recon its approx. €160,000. Planned investment in at property, distressed a Grude, Hotel bought Ćorluka, Petar individual worth The company Violeta, owned by high net to the a into adapt building hotel. planning is investor The €750,000. Tuzla. uređaja(TTU)transportnihTvornica in of building office administration former the bought Bingo, by owned Remont, Tuzla 2017 ,

399 i.e. once the current owners decide

Investment struction struction is approx.€4 million. 2018

401 2019(9)

was worth approx. approx. worth was

440 nl ciiy will activity onal

- 2019 | Bosnia and Herzegovina

15 Research and Forecast Report | Colliers International . a s to to the the city city

floor floor

ward ward hotel,

prices. prices.

Planned Planned 26 d a

and and growth

in in December averaging

The The

incomes

adopted to to the original solution,

opened opened the door to the

segment. Approval of the has been announced for H1

floor tower with -

40 years. asking price for apartment in

a commercial urban project was 2019. Compared 26 from reduced was floors of number the to a maximum of construction 15 floors. Start of 2020. Sarajevo Tower, construction, is currently settlement located in under Sarajevo. in building Pofalići will include commercial premises. residential Total and GBA amount will to around 80,000 m² and include around 400 apartments will and 600 parking places. Commercial area will extend to around 11,000 m². Completion is H1 in 2020. expected R Tower project envisions development of commercial premises and apartment Urban plan inhas been adopted January 2020, which construction of a new tower. Twist Tower. to Avaz location next is Green city project as comprises well as garages 938 and apartments of 777

Under construction  Pipeline   Asking prices are above achieve Average of Sarajevo stands at around €1,400 per m², while median price is around €1,300 per m². Asking Skenderija prices neighbourhood, are highest m².peraround €1,700 in The prices vary depending on factors such different as location, condition of the age and architecture floor, size, apartment, from apartment ofetc. building, view Due to recovery of movement in average economy, up of tourism in Sarajevo, we expect slight increase of apartment following prices in — use and and -

owever, owever, around 55 55 around

who use their their use who

55% of buyers buyers of 55% ,

income mass - Sarajevo Sarajevo on leading residents

2018 on average around round one third of all

–

differently, differently, pushing mixed Centar city district. city Centar

strong demand for apartments in in apartments for demand strong

–

a

Middle East Middle

2018).

Population in BiH has been decreasing, mostly due to strong emigration. H population of Canton Sarajevo 2014 period is in 1.1% (up increase slight stable with – The prices per m² of sold have new been dwelling stable in the last few years in Canton Sarajevo. In first three quarters of 2019, price of VAT (including m² per €1,000 surpassed per m² 17%). increased Demand is There Sarajevo in general. The demand is also According apartments. build new for strong agencies, estate real local to are local residents, diaspora 30% and 5% are are foreign nationals Bosnian mostly real estate as a investment. summer residence or focused on building housing while low foreign capital was directed somewhat projects with luxurious residential uses.along various commercial with units Currently there is around 2,300 advertised apartments for sale in ads website. A advertised apartments Sarajevo is located in In period 2012 2,750 new dwellings annually, were with on completed average useful 150,000 m² surface Average useful surface of completed new completed was period observed indwelling annually. m². invested been has capital public Significant in the damaged or reconstruction destroyed during of Domestic the war. private properties capital was mostly Supply

DENTIAL MARKET I

RES 16 2019 | Bosnia and Herzegovina

Research and Forecast Report | Colliers International 201 BIH, PERIOD (m²), SURFACE USEFUL AND DWELLINGS COMPLETED Figure SARAJEVO NEIGHBOURHOODS, (€/m PER ASKING PRICES AVERAGE Figure IN DWELLINGS NEW SOLD OF PRICES (€/m²) VOLUMES Figure Sources: Figure 17: Federal Bureau of Statistics BiH | Figure 18: 18: |Figure BiH Statistics of Bureau Federal 17: Figure Sources: 18 17 19 : : : ²

), SELECTED SELECTED ), AND AVERAGE AVERAGE AND

4 - 2018

100 200 300 400 500 600 700

€ 1,800€ 2,000€ €1,000 1,200€ 1,400€ 1,600€ € 200€ 400€ 600€ 800€ 0 € 0 € € 1,551€ Institute for Informatics and and Informatics for Institute 2014 2015 2016 2017 2018 Year No. of sold new dwellings

€ 1,331€ completed dwellings No. ofNo. 2,825 2,150 2,766 2,987 2,985 € 1,385€

Statistics, Canton of Sarajevo | Figure 19: olx.ba olx.ba 19: |Figure Sarajevo of Canton Statistics,

€ 1,483€ Y - 17% 29% 24% - 8% 0% O - € 1,246 € Y

Averageprice perm² (€)(rhs) Usefularea € 1,195€ 53,960 32,810 42,699 15,399 35,116 (m 2 )

€ 1,209€

Y - 25% 31% 13% 24% - € 1,681€ 4%

€ 1,000€ 1,050€ € 750€ €800 850€ 900€ 950€ O - Y

2019 | Bosnia and Herzegovina

17 Research and Forecast Report | Colliers International

20 159

99

8 4

114

offices

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For more than experienced 20 equity, our of years, 40% leadership than more owning our team, have delivered shareholders. investment for returns industry In 2019, corporate revenues were €3,1 billion, with more than billion of assets under management. ac we how about more Learn success at Twitter Colliers Colliers International TSX: CIGI) is (NASD a leading global real estate services management and investment operations company. in 68 18,000 With countries, enterprising our people collaboratively work to provide advice and services to maximize the expert value of property for investors. owners and occupiers, real

ABOUT COLLIERS ABOUT 18 2019 | Bosnia and Herzegovina

Research and Forecast Report | Colliers International we tenant, whoor are partner a is produces that and diffe think simply We way. the of step every value elevates that expertise looking forward experience You'll it. do we how but do, we what not is apart Colliers sets What solutions and Technical dueCorporate diligence. & Valuation rep management, Landlord markets, Capital estate include advisory, investment Real Services basis. management, international Project and solutions, national Workplace regional, local, a on developers & Herzegovina and Bosnia Croatia, International Colliers thinkdifferently Colliers professionals innovative outcomes. Whether you’re a developer, investor, landlord investor, developer, a you’re Whether outcomes. innovative

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19 Research and Forecast Report | Colliers International

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FOR MORE INFORMATION

COLLIERS INTERNATIONAL CROATIA, SLOVENIA AND AUTHOR: BOSNIA AND HERZEGOVINA Ivan Laljak +385 1 4886 280 Consultant [email protected] Investment, Valuation and Advisory Services http://www.colliers.com/en-gb/croatia [email protected]

This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. Colliers International

About Colliers International Petrinjska 3 Colliers International (NASDAQ, TSX: CIGI) is a leading real estate professional services and investment management company. With operations in 68 countries, our more than 18,000 enterprising professionals work collaboratively to provide expert advice to maximize the value of property for real estate occupiers, owners and investors. For more than 25 years, our experienced leadership, owning approximately 40% of our equity, has delivered compound annual investment returns of almost 20% for shareholders. In 2019, corporate revenues were more than $3.0 billion ($3.5 billion including affiliates), with $33 billion of assets under management in our investment management segment. Learn more about how we accelerate success at corporate.colliers.com, Twitter @Colliers or LinkedIn.