MARKET REPORT 2009beobuild.rs/visuals/data/media/16/Market_Report_2009.pdf · process of “Zastava Automobili”. The total amount of FDI in 2009 de-creased by 25% in comparison

SERBIAN REAL ESTATEMARKET REPORT 2009

Danos Company operates for 42years in Greece and Cyprus, while in2009 new offices in Belgrade, Tiranaand Sofia were opened.

Since 2008 Danos is a member ofthe international network of BNPParibas. In particular Danos is part ofspecialized property division BNPParibas Real Estate, which operatesthrough 80 offices in Europe, MiddleEast and the United States, havingover 3.500 employed professionals.

As our major services we canemphasize investment advisorysolutions, real estate appraisalservices, investor’s representation, aswell as sale and letting of all type ofproperties.

Danos Group:

SERBIA:BELGRADE

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Web: www.danos.rs

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Market Report 2009 | 2 |Danos Serbia

Serbia Key Facts

The Republic of Serbia encompassesan area of 88,412 square kilometersand is divided into 150 municipalities,23 cities and the City of Belgrade. Es-timated 2009 population of Serbia is7,334,950.

Serbia borders with Bulgaria, Ro-mania, Hungary, Croatia, Bosnia andHerzegovina, Montenegro, Albaniaand FYROM.

The capital of Republic of Serbia isBelgrade with the population of1,576,124 (Census 2002).

In 2009 EU decided to unblock the In-terim Trade Agreement followed byVisa’s abolishment, after which Serbia

filed for EU candidature. Serbia alsosigned Free Trade Agreement (FTA)with Iceland, Lichtenstein, Norwayand Switzerland in 2009, after exist-ing agreements such as:

• CEFTA, with all neighboring coun-tries

• FTA with the Russian Federation,offering access to market of 150 Mpeople

• FTA with Belarus and Turkey (alsoin 2009)

Serbian economic stabilization andgrowth in recent years was mostlydepended on available foreign fundsand direct investments, which num-ber seriously declined nowadays dueto the global recession. Major FDIcomes via privatization process andthe latest FDI in 2009 recordedamount of EUR 100mn of first pay-ment from total amount of EUR600mn in FIAT Group’s privatizationprocess of “Zastava Automobili”. Thetotal amount of FDI in 2009 de-creased by 25% in comparison withyear 2008.

Economy slowdown was also drivenby decrease in loan instruments thatbecame more expensive due to high

SERBIA - KEY FACTS

Picture: Europe map

interest rates, as banks becamemore cautious following restrictivemeasures instructed from their HQs,and were also faced with high levelof illiquidity issues and credit repay-ment inabilities.

In order to lessen the crisis impact,Serbian government reached anagreement with International Mon-etary Fund (IMF) in March 2009, fora stand-by credit arrangement inamount of EUR 3 bn, as to fulfillbudget deficit and cover public ex-penditure.

Main goal in mid-term period is alsoto keep one-figure inflation, espe-cially since domestic currency depre-ciated to its lowest value, as well asachieving positive GDP in 2010.

In 2009, the number of employeesdecreased by 5.1% if compared withthe previous year. Net salaries andwages increased in 2009, in nominalterms, so that, in comparison to2008, they showed growth of 8.5%.In real terms, they decreased by0.1%. Located in Southeast Europe,Serbia represents central part of theBalkan Peninsula, at the intersectionof Pan European Corridors N° 10 andN°7.

Savograd

BlueCenter

B-23

| 3 | Market Report 2009 Danos Serbia


Number of constructed apartments in Serbia

Source: Danos, Serbia

Serbian Residential Market

Construction industry in Serbia re-corded a decrease in its activity of19.9% in 2009 due to the global fin-ancial crises. Crisis impact on real es-tate industry is also evident throughdecreased number of issued con-struction permits of some 16% in 1H2009 comparing with the same peri-od in 2008. Number of constructedapartments in 2009 is predicted tobe significantly lower in comparisonwith 2008, which would halt an in-creasing construction trend since2001.

Main characteristics of residentialmarket in Serbia in 2009 are de-creasing number of new develop-ments, delay in issuing ofconstruction permits, limited availab-ility of project financing options andsignificant decrease in demand,which all led to an almost insignific-ant number of sales transactions inthe market.

Major improvement regarding realestate industry in 2009 was adop-tion of new Construction and Plan-ning Law in August, as an initiativeto attract new and reactivatepresent investors in the market. Ma-jor changes in the regulations implya possibility of land conversion fromagriculture into construction landand a possibility of full ownershipover construction land instead ofright to use (which is also valid forreal estates gained in a privatizationprocess). The Law also predicts ob-taining of location permit within 15

RESIDENTIAL MARKET 2H 2009

Number of constructed apartments in Serbia, in 000 sq m


Average prices of newly built apartments in 2H 2009, in EUR/sq m



days and construction permit within8 days.

Serbian government, together withmajor construction companies, isabout to adopt a mid-term plan onconstruction of “cheap apartments”across Serbia in order to stimulatereal estate industry and improvemarket activities, along with re-newed process of reinsuring mort-gages in National Corporation forLoan Insurance in total amount ofEUR 1.5bn of insured loans.

Belgrade Residential Market

New household construction activityis mostly concentrated in Belgrade,with 24% of issued construction per-mits out of the total number in Ser-bia. However, due to the crisis,Belgrade construction industry re-corded a decrease in the number ofissued permits of 2.5% in 2008 com-pared to 2007. Decreasing trendcontinued also in January 2009, withonly 80 permits issued in Belgrade,which is 36% less in comparison withthe same period of 2008.

Supply of new apartments recordedan increase in 2008. According tothe Republic Statistical Office, totalnumber of built apartments in 2008was 7,860 units, which indicates anincrease of 3.3% in comparison with2007. In 1Q 2009 the number ofnewly built apartments was 1,078.Largest construction activity in2008 was recorded in the municipal-ity of New Belgrade with 1,896 ofnewly built apartments, which rep-resents a share of 24% from Bel-grade’s total new construction,followed by Zvezdara with 1,272 of

Number of constructed apartments in Belgrade


Number of constructed apatments by Belgrade's urban municipalities, in 2008


Structure of newly built apartments in Belgrade, in 2008



new apartments, Palilula with 904,Vozdovac with 570 etc.

Most of residential buildings cur-rently under construction are stillsmall in size, and consist between 10and 30 apartments. Largest residen-tial developments delivered in 2009were “Belville” project in New Bel-grade with 1,850 apartments, “ParkApartments” project in New Belgradewith 180 apartments and “Savograd”project, also in New Belgrade, with15,000 sq m of residential space. Inthe beginning of 2010, one more

large project will be delivered to themarket in the city’s downtown -“Galerija Apartments” project, withtotal area of 12,000 sq m.

In 2008, the largest share of newapartments was three-room apart-ments with 32%, followed by two-room apartments recording 29% andone-room apartments with 24% intotal share. It is important to emphas-ize that for the first time in severalyears three-room apartments makethe largest share in the total numberof new developments.

Demand for the apartments in the 1stquarter of 2009 is experiencing rapidslow down compared to 2008. Moreconservative lending policy of bankstogether with increase of interestrates has influenced lower availabilityof home mortgages to most of thebuyers. Also, economic slow downresulted in higher level of prudenceof potential buyers, together with ex-pectation of price reductions.

Low demand dynamics also contin-ued in the 2nd quarter of 2009, andwere mainly caused by tight creditpolicy and increased caution of thepopulation. Despite the demandtrend, the supply is still low, whichstipulates that newly built apart-ments in prime locations still main-tain artificially high prices.

Sales prices have experienced de-crease due to economic downturnwhich caused limited offer of housingloans and slowing of market activity.

Compared to the price expansion in2008, the whole 2009 saw a de-creas in both demand and prices, es-pecially for mid level apartmentslocated at the outskirts of the city.

Average asking prices in Belgrade in 2H 2009, in EUR/sq m


Vojvode Petka

Projects under construction

Apartment prices have recordedhighest decrease of some 20% inthe suburban parts of Belgrade,while apartments in the central loca-tions experienced a decrease of 10-15% on average. We can further em-phasize that this is the first decreaseof residential prices since 1999.

Sale prices range from average€1,100 – 1,300 sq m in the city’speriphery, up to €2,000 - €3,500 inthe city centre and Vracar, and€2,000 - €3,500 in Dedinje, Senjakand central part of New Belgrade.The city centre and Vracar remainthe most exclusive areas. In NewBelgrade, average prices rangebetween €1,500 - €2,500 per sq m,although some location and newlybuilt apartments can achieve evenhigher prices.

Gruzanska

Belville

MekenzijevaMlatisumina



Serbian Retail Market

Most influential domestic retailersare Delta Holding, which holds:- Delta City shopping mall (85,000

sq m) with Maxi Hypermarket of4,500 sq m

- 69 supermarkets and 177 small mar-kets across Belgrade and 48 super-markets in Serbia, all with areabetween 1,000 and 2,000 sq m

and MPC Properties which holds:- Usce shopping center- Immocenter- Fashion Centar- Department Store in Nis

Other local retailers that continu-ously expand their network are DIShypermarket chain and newly foun-ded Familija supermarket chain, whois the main supermarket operator inDepartment Stores “Beograd”.

In a short term period, developmentactivity will be at least slowed down,but on a mid and long term period,

Serbia will maintain the most interest-ing emerging market for real estate

development, especially in retail sec-tor.

In past few years, Serbia experienceda rapid growth in demand for retailspace, hence the construction of vari-ous types of retail premises grew.

However, Serbian retail sector is stillunder-served and fragmented com-

pared with more mature markets,with only 25m2 of retail space per1,000 inhabitants, compared with theEU average of 270m2. The most con-centrated retail concepts are still tobe found along main-street locationsand within the expanding network ofretail warehousing.

On the other hand, numerous shop-ping malls announced or are planningconstruction. Belgrade and Novi Sadare the main construction centers,but in recent years many retailers ex-panded their network in the citieslike Sabac, Nis, Cacak, Kragujevac.

Novi Sad encompasses some 93,000sqm of retail stock, while Kragujevacat the moment has 60,000 sq m andSubotica with 40,000 sq m of retailstock.Modern shopping centers/retail big

RETAIL MARKET 2H 2009

Super/Mega/Hypermarket stock Serbia (in sq m)


Shopping center stock in Belgrade (in sq m of GBA)



boxes have been built in past fewyears and most of them are in Bel-grade: Merkator, Rodic, Super Vero,Delta City, Zira, Usce etc.

The biggest international retailers inSerbia are:- Metro (Germany) – 5 objects, total

area of 46,730 sq m- Idea (Croatia) – 3 objects, total

area of 39,500 sq m- Mercator (Slovenia) – 5 objects,

total area of 152,300 sq m- Merkur (Slovenia) – 3 objects, total

area of 49,300 sq m- Veropoulos (Greece) – 3 objects,

total area of 17, 100 sq m

Belgrade Retail Market

In 2009, major activity in this seg-ment was reflected with the openingof third modern shopping center inBelgrade: Usce– (130,000 GBA sq m)located in New Belgrade, opening ofrenovated Department Stores “Beo-grad” and Austrian Kika (23,000 GBAsq m) furniture retailer in BezanijskaKosa. Because of the current financialand economic crisis, the retail sector

had only one shopping mall openingin 2009, while 2010 so far does nothave any shopping malls in thepipeline. At the same time, all previ-ously proposed projects are on thehold such as Ada Huja, Delta Planetand Plaza Center shopping malls.

Supply At the end of March 2009Belgrade saw opening of the largestshopping mall in Serbia, Usce shop-ping mall with 130,000 sq m of GBAand 43,500 sq m of GLA on fouraboveground and two undergroundlevels. Usce shopping mall presentedto retail market additional brandssuch as: Stiefelkoeing, Ko-ton, Brown Shoe, U.H.S.Taubner, Mandarina Duckand many more. Togetherwith this opening, modernshopping center stock inBelgrade achieved 155,000sq m of GLA.

Chain of department stores“Beograd” started withopening of refurbishedunits in Belgrade. Retailstore in Miljakovac was

opened in February with total area of6,850 sq m. In May 2009 depart-ment store “Beogradjanka” in KraljaMilana Street was opened with totalGBA of 16,000 sq m. Until the endof 2009 total of five renovatedstores have been opened within theBelgrade area.

New Merkur store in Karaburma hasbeen opened in October 2009 andconsists of 29,000 sq m of GBA andthat is its second retail store in Bel-grade.

In November new furniture retailerentered the market with opening ofthe largest furniture store in Bezan-ijska Kosa. It is Austrian furniture andhome décor store Kika, which openedits retail center with total area of23,000 sq m, while it’s selling areacovers 11,000 sq m.

High Street Downtown of Belgraderepresents main shopping and pedes-trian zone, with great number of do-mestic and foreign brand tenants. Forthe first time after many years de-mand for high street retail units hasdecreased and available retail spaceappeared. High street zone experi-

Big box stock in Belgrade (in sq m of GLA)


Picture: Major shopping streets


enced faster change of tenants andthis trend has continued in 2H 2009.All these changes will contribute toset further rent reduction and moreflexible lease terms.

Downtown of Belgrade representsmain shopping and pedestrian zone,with great number of domestic andforeign brand tenants. For the firsttime after many years demand forhigh street retail units has decreasedand available retail space appeared.High street zone experienced fasterchange of tenants and this trend hascontinued in 2H 2009.

Retail warehousing is still active retailsegment in Belgrade and Serbia withtwo openings in Belgrade in 2H 2009(Merkur and Kika). This retail seg-ment has appeared as dynamic also inother towns in Serbia. Namely, Inter-ex supermarket chain opened super-market in Obrenovac (3,500 sq m)while French “Do it yourself” chainMr.Bricolage (5,800 sq m) was

opened in November in Nis. Localchain Tempo opened supermarket inCacak (8,000 sq m) while two super-markets are currently under construc-tion in Kraljevo and Uzice.

Vacancy rate in high streets increaseddue to the crises since many tenantsfaced financial difficulties caused bydecrease of retail turnover. For thefirst time we have observed that sev-eral tenants vacated premises at both

prime and secondary streets and thatsome were several moths unoccu-pied. In 2010 opening of Departmentstore “Beograd” is expected in KnezMihajlova steet with 5,033 sq m ofGBA.

It is noted increased rent voids inshopping centers that caused land-lords to become more flexible andagree to renegotiate current rents atlower level. Hence, current marketconditions improve the position oftenants in terms of rent conditions,rent levels and availability of supply.This goes in favor of big retailers andbrands that now have an opportunityto reposition themselves in Belgradeand other bigger cities in Serbia.

Warehouse Retail Market

Pipeline Shopping centers stock inBelgrade will remain stable in 2010while new deliveries are expected in2011. There are announcements thatSwedish furniture company Ikea willenter the market in 2010 with devel-opment of the first shopping centerin Belgrade.Rental levels As a result of the glob-Graph: High street retail categories

Delta City


al financial crisis toll on the real eco-nomy, the rents have dropped 15-30% on average. Average achievedshopping centers rents are in rangeof EUR 25-60 per sq m.

Most expensive rental levels are re-corded in Knez Mihaila Street, withaverage monthly rents from EUR100 – 140 per sq m/month. Second-ary street locations recorded rentlevels from EUR 30 – 90 per sqm/month, while less attractive loca-tions, mainly in suburban areas, re-corded rent levels from EUR 10 -25per sq m/month.

Indicative yields for prime street loc-ations are at around 7% and forshopping mall from 8.5 - 9%.

Selected asking prices for retail premises


Usce

Merkator


Belgrade Office Market

Serbian modern office market startedto develop after the political changesin 2000. At that time, the countryopened its doors for internationalbusiness and cooperation causing aninflux of foreign companies and organ-izations in significant need for qualityoffice premises. Due to increased de-mand for modern class A officepremises, investors started withstrong development of new CBD(Central Business District) zone ofBelgrade.

The real expansionary phase of officespace started in 2004 and 2005 andcontinued through following years.The first signs of market saturationstarted to appear during 2008 withmany new deliveries while economycrisis in 2009 influenced further mar-ket contraction especially on demandside. All these factors have affectedrental levels which experienced sharp

decline during 2009.

Belgrade office marketcan be divided by loca-tion on Central Busi-ness District (CBD),Broad Center Area andSuburban area.

CBD Area of Belgradeencompasses an areaof downtown (Dorcol,Knez Mihailova Street, TerazijeStreet, Slavija Square and Knez Mi-losa Street as most prominent down-town business areas) and NewBelgrade (Blvd. Dr. Zorana Djindjica,Blvd. Mihaila Pupina Street, III Blvd.and Omladinskih Brigada Street asthe most prominent business areas inNew Belgrade).

Broad Center Area includes widerdowntown area, both on New Bel-grade and Downtown. In New Bel-grade most prominent business areas

are Jurija Gagarina Street and Blvd.Nikole Tesle Street, while on “theother side of the river” those areaswould be along Blvd. KraljaAleksandra Street, Vracar area, Au-tokomanda area, Belgrade Fair areaand along Blvd. Oslobodjenja Street.

Suburban Area encompasses widercity area, along major streets androads which enter into the city.

Belgrade Office Market

Total stock of office premises in Bel-grade in 2H 2009 was around690,000 sq m of GBA, whichpresents an increase in stock by49,500 sq m or 8% comparing to theend of 2008. The overall stock in-crease in 2006 was 24% while in2008 recorded increase was 45%which delivered to the market addi-tional 200,000 sq m. Most of newdevelopments are still concentratedin New Belgrade. Class A officepremises recorded stock of around431,000 sq m, while Class B stockrecords 260,000 sq m of GBA in

OFFICE MARKET 2H 2009

Picture: Belgrade office districts

Total stock of Class A and Class B, in sq m, yearly



total. Many new projects intendedfor delivery during 2H 2009 werepostponed for 2010 due to lack of de-mand.

Supply and most of developmentsare still recorded in New Belgrade,with prevailing Class A officepremises. Reason for this we can findin the fact that New Belgrade haslarge stock of undeveloped construc-tion land with clear and valid owner-ship issues. Major developments anddeliveries in 2009 were Savograd(20,000 sq m), Airport City Tower(12,000 sq m) and Belgrade OfficePark (16,000 sq m). Most of develop-ments scheduled for completion in2H 2009 were postponed for 2010.Currently under construction is ap-prox. 150,000 sq m of modern officespace that has to be completed in 1H2010.

Vacancy rate in total office stock re-corded an increase from 12% at theend of 2008 to 15.5% in 2H 2009.Class B office stock recorded an in-crease in vacancy rate from 13% atthe end of 2008 to 18.0% in 2H2009, while Class A stock recorded

an increase from 11% in 2008 to13.8% in 2H 2009. These vacancy fig-ures relate only on completed build-ings. Future developments thatstarted with pre-leases are not in-cluded in office stock nor are calcu-lated in vacancy for thesedevelopments.

Market slowdown together with signi-ficant increase of office stock in2008 and 2009 with expected newdeliveries in 2010 will considerablychange the picture of the office mar-ket. Predictions for 2010 aren’t optim-istic; significant amount of postponed

new developments will be deliveredduring 2010 which will considerablyincrease stock and vacancy rate, es-pecially concerning the fact thatthere are no new FDI and expansionplans until the recovery of world’seconomy.

Belgrade Office Market (Cont.)

Demand for quality and high stand-ard office premises in Belgrade iscontinuously decreasing. Decrease ofdemand is noted from the secondhalf of 2008 and has continued into2009. Most of businesses decided topostpone their expansion plans andthere is no interest among the poten-tial investors to enter the market inthis specific moment. Therefore, wecan conclude that demand in 2009has experienced some change.

Due to the increase of available of-fice space under favorable rentssome tenants have decided to relo-cate to either better quality buildingsor to more attractive areas. Reloca-tions represent the main driving forcein the market especially in the bank-ing sector.

Total stock of Class A and Class B, in sq m, quarterly


Vacancy Rate, in %



The highest demand (almost 70% oftotal) is for small and medium officepremises, areas ranging from 200 –1,000 sq m. The decrease in demand,together with announced comple-tions in 2010, will maintain the down-ward pressure on the rent levels, butpace of decrease is expected to belower than in the previous period.

Rental levels continue their decreas-ing trend in 2009 due to overall de-mand contraction and increase ofavailable office space in the market.Average asking rents for class A of-fice premises in CDB area are EUR 15-16 per sq m/month, while certain mar-ket transactions indicate even lowerrange. Asking rents for class Bpremises are EUR 11-11.5 per sqm/month.

In a comparison to the end of 2008,there was a downfall in Class A officerents by 10-15% and approximately10% in Class B office rents.

Class A

Average monthly rents for Class A of-fice premises have a descendingtrend since 2001. In 2008, an averagerent level was EUR 17 per sqm/month, and dropped to EUR 15 persq m/month in 2H 2009. The highest

rental levels are recorded in CBDArea, where in 2H 2009 averagerents varied between EUR 15 and 17per sq m/month, while rents in WideCenter Area were fluctuating fromEUR 13 to 15 per sq m/month.

Class B Rents

Average monthly rents for Class B of-fice premises have the same trend. In2008, an average rent level was EUR12.5 per sq m/month, which droppedto EUR 11 per sq m/month in 2H2009.

Regarding location, the most expens-ive location is CBD Area, where in 2H2009 average rents varied betweenEUR 10.5 and 11.5 per sq m/month,

while rents in Wide Center Areawere fluctuating from EUR 7 to 9 persq m/month.

ipeline for the 1H 2010 will be veryextensive, having in mind all the de-liveries that were under constructionduring 2009. The first class A officedelivery in 2010 will be Blue Center(52,000 sq m), located in CBD areaof New Belgrade – Block 26. Open-ing is set for February and this pro-ject will offer to the market premiumclass A building with highest stand-ards, amenities and services.

In 1H 2010 the VIG Plaza (16,000 sqm) project in Block 11a, New Bel-grade, will be delivered. Two Class Boffice buildings (34,000 sq m) inBelville will be opened in January2010. At the end of 1H 2010 the de-livery of Tri Lista Duvana (10,500 sqm) project is announced, which is oneof the major class A office develop-ments in downtown area.

Indicative Yields for Class B Offices inCBD zone are estimated at 10.5%,whereas for Class A Offices are es-timated at 9.5%.

Graph: Average rents by location

Rent levels, in EUR / sq m / month


| 15 | Market Report 2009

Yields, in %

Source: Danos, Serbia Vig Plaza

Airport City

Danos Serbia


Industrial and Logistic Market

With favorable geo-strategic positionoffering the possibility to access EUmarket easily, but also providingtransit to the East, Serbia provides re-markable opportunities for industrialand logistics developments in the fu-ture. Via strategic transportation cor-ridors 10 and 7 the country linksWestern Europe and the Middle East,representing excellent location for fu-ture regional logistics centers whichmay effectively serve West Balkan Re-gion.

Regarding future development and ex-pansion of this sector, the Serbian Na-tional Investment Plan identifies 49industrial development zones, fromwhich 17 are located in Belgrade, 20in Vojvodina and the remaining incentral and southern Serbia.

Apart from Industrial zones, city au-thorities across Serbia have also re-cognized the concept of Free

Industrial Zone potentials, as an in-vestment initiative to attract foreignindustrial and logistic operators.

Most attractive industrial and logisticzones are located in Belgrade widearea, such as Simanovci, Stara andNova Pazova, Indjija, Ruma, but alsowithin Belgrade boundaries, such asBelgrade Free Industrial Zone in Palil-ula municipality, Dobanovci, Surcin,

Krnjaca, Zemun, Grocka. Other majorcities are also becoming more andmore interesting for investors, suchas Kragujevac, Sabac, Subotica, Nis,Novi Sad.

Supply It is estimated that totalstock of modern warehouse and in-dustrial facilities in 2008 in Serbiawas around 600,000 sq m, withtotal of 2,000 facilities. From 2005

Picture: Serbian road network

Picture: Major industrial and logisticcenters in Serbia

INDUSTRIAL &LOGISTIC MARKET 2H 2009

Number and area of newly built industrial and warehouse facilities in Serbia



construction activity in this real es-tate segment recorded increasing con-struction trend in the number offacilities from 14% to 24% per year. In2008, Serbia recorded 640 new in-dustrial and warehouse units, whichrepresents an increase of 12% compar-ing 2007.

According to the Belgrade Statisticaloffice, in the last few years averageconstruction dynamic of new logisticdevelopments was 30,000 sq m an-nually. The majority of these develop-ments range in size between 2,000 -15,000 sq m, while very few rangefrom 15,000 sq m and above.

The largest supply of modern ware-houses is recorded in the wider areaof Belgrade. New supply of logisticspace in 2009 comes from local de-velopers that built premises mainlyon speculative basis. Estimated totalstock of logistic space in Belgrade isapproximately 300,000 sq m.

Belgrade Area Industrial andLogistic Zones

Belgrade’s logistics stock is largelyconcentrated in the popular areas of

Zemun and Krnjaca, but also alongthe highway E-70, towards Zagreb,where most developed areas are Si-manovci, Dobanovci, and Surcin. Overthe medium-term, Belgrade’s authorit-ies plan to establish four main indus-trial/logistics zones within the cityterritory - Surcin, Grocka (100 Ha),Mladenovac (270 Ha) and Obrenovac(255 Ha).

Currently, the most interesting areasfor investors are in Belgrade’s widerarea towards Vojvodina, such as

Dobanovci with 3,118 Ha of totalland, Simanovci area of 250 Ha, Staraand Nova Pazova with Krnjesevciarea of 800 Ha, Indija with 382 Ha ofland.

Demand has recorded a decrease in2H 2009 , which is reflected by thedecline in the number of inquiriesand size of requested premises. De-mand mainly comes from logistic op-erators, pharmaceutical and retailcompanies. Average size of ware-house inquiries decreased, rangingbetween 1,000 and 3,000 sq m.

Pipeline The logistic market experi-enced substantial changes in 2009due to lack of demand which causedmany developers to postpone theiractivities for an indefinite period.Many proposed logistic develop-ments for 2009-2010 are halted andtheir completion is uncertain.

In the following period we can ex-pect that number of speculative de-velopments will remain limited and

Picture: Belgrade Industrial Zones

Rents for Class B in area around and in the city of Belgrade, in EUR/sq m/month


Rents for Class A in area around and in the city of Belgrade, in EUR/sq m/month


the only developments that will bebased are on built-to-suit option.

Largest proposed development in2009 is logistic and cargo center inNis, near the airport, with total areaof 136,000 sq m which will be de-veloped in phases. The developer isAustrian company Eyemaxx. Com-mencement of construction works isstill unknown.

Rental Levels and Land Prices

Rental levels depend on manyfactors. Large number of tenants areseeking for modern and flexiblewarehouse space with built up trans-portation infrastructure on attractivelocations, with ceiling heights 9 - 12meters, independent power supply,temperature control, loading docks,ramps etc. These facilities could beclassified as Class A, and are mostlylocated in wider Belgrade area.

On the other hand, Class B industrialand warehouse facilities are mostlyunits located in the boundaries ofthe city of Belgrade, such as areas insurrounding of Pancevacki Bridge,along the Danube River (Viline Vodeand Belgrade’s Port area), but also inwider Belgrade area. Premises arecharacterized as older facilities withpoor equipment, ceilings between 6- 7m of height, without ramps etc.

Class A premises recorded a slightdownturn in the rental levels com-paring to 2008, but we can still con-firm relative stable prices despitethe crisis. Facilities at less attractivelocations recorded average rangefrom EUR 3 – 5 per sq m/month,while modern and equipped facilities


Danos Serbia| 19 | Market Report 2009

range from EUR 4 – 6 per sqm/month.

Class B premises recorded averagerental levels from EUR 2.5 – 3.5 persq m/month for less attractive loca-tions, while locations in close Bel-grade areas and within the cityboundaries recorded higher averagerental levels from EUR 3 – 4.5 persq m/month.

Main characteristic of the industri-al/logistics investment market is thatit is still constrained by a lack of fa-cilities and limited speculative con-struction. Most of the facilities areunder owner occupancy, so very fewtransactions have been recorded inthe open market.

The estimated yield ranges from 11 -13%.


During its 42-year work as an interna-tional eminent property adviser,Danos Group has developed largedatabase of the users of services,which includes public companies, fin-ancial institutions, market chains, cor-porate clients, private investors andother users of services.

Company "Danos & Associates" hasstarted doing business in Serbia in alli-ance with "BNP Paribas" group, beforeone year ago. The company’sheadquarters are located in Belgrade,with the local team of experiencedprofessionals. About the situation atreal estate market in Serbia, we arespeaking with Jovan Jovanovic, Direct-or of Danos Serbia.

What is your opinion on the currentstate of the Serbian real estate mar-ket and what do you expect will hap-pen in the following period?

I believe that there is not going to bea significant increase in the volume ofcommercial real estate transactionswhen compared to 2009. We at theDanos Company have observed aslight growth of queries related to

the lease of office and retail space inthe first two months of 2010, primar-ily within the territories of Belgradeand Vojvodina.

Business space tendencies remain fo-cused on Class A real estate, wherenew lessees are quick to recognizethe chances for negotiating additionalbenefits when agreeing on rent andthe specific obligation aspects oflease agreements, where we are ob-serving the biggest growth in demandfor small and mid-sized office space,ranging from 150 to 400 squaremetres.

As for retail, the market itself finallyreached a new point at the beginningof this year, where the owners of realestate came to better understand thesituation and managed to adjust theirprofit expectations to match the actu-al financial moment. It was this view-point shift that enabled the increasein the number of successfully closedtransactions for our company, primar-ily for the main pedestrian zones ofdowntown Belgrade, as well as retaildevelopments across Serbia.

To what extent is Serbia truly opento foreign investments?

Since the democratic changes, Serbiahas maintained, on paper, that it wasopen to foreign investments. Unfortu-nately, what we, as a country, failedto accomplish during the ten years ofour transition is to provide a clear,transparent, and, most important ofall, affirmative legal framework. Thiscomponent is critical in the eyes of

foreign investors, and weighs heavilyin the decisions they are makingwhen they allocate capital in the re-gion of South-eastern Europe.

Until now, our neighbours haveshown much more sensitivity to con-structing legal frameworks suited toattracting foreign investments;however, the announcements issuedby the Government of Serbia overthe past few months, which spoke ofthe final simplification and speedingup of ownership transfer procedures,are encouraging.

What is your advice to potential in-vestors?

I would advise those investors whoare already present to use this mo-ment to consolidate their operationsin order to reach conditions wherethey can optimize their business op-eration expenses in Serbia.

Our advice to new clients on Serbian,market which the Danos Company –together with our parent networkBNP PARIBAS Real Estate – pointstowards the most profitable invest-ments, is to focus on affordable res-idential development in Serbia; next,we firmly believe that logisticcentres are one of the most pro-spective sectors; finally, investingmoney in land acquisition is alwaysgood longterm venture. Also, FDIsare heavily needed for primary infra-structure in Serbia, helping the devel-opment of commercial real estateand, by inference, our economy ingeneral.

Danos in Alliance with BNP Paribas Real Estate,first year of Serbian operations

Jovan JovanovicDirector of Danos Serbia

DANOS SERBIA REFERENCES

- Bluehouse Capital Valuation of theoffice building (52,000 sq m) inNew Belgrade and the shoppingmall (43,000 sq m) in Zagreb Croa-tia

- Pakom Feasibility study for themixed use development (12,000 sqm) in block 65, New Belgrade Ser-bia

- Real Estate Housing Feasibilitystudy for mixed use development(3,300 sq m) in Kragujevac Serbia

- Carnex Agricultural land portfoliovaluation (3,500 ha) in VojvodinaSerbia

- Interex Valuation of portfolio of su-permarkets in Serbia and Bosniaand Herzegovina Serbia, Bosnia &Herzegovina

- Phoenix Pharma Valuation of phar-maceutical production complex andportfolio of the commercial proper-ties in Novi Sad Serbia

- Viotros Valuation of the productionfacility (4,000 sq m) in Visegradand apartment in Neum Bosnia &Herzegovina

- Delta Maxi Valuation of the super-markets and the office building inBelgrade Serbia

- Hellenic Sugar Feasibility study forthe apartment hotel in Sutomoreand the apartment building inTrpanj Montenegro, Croatia

- Tehnocentar Mag Valuation of theretail/commercial complex (4,600sq m) and excess land (2 ha) inNew Belgrade Serbia

- Port of Belgrade Valuation of 2warehouses (14,000 sq m) Serbia

- MK Group Agricultural land portfo-lio valuation (2,500 ha) in Kula Ser-bia

- Beogradski Vunarski Kombinat Valu-ation of the warehousing facilities(16,600 sq m) in Belgrade Serbia

- Vahali Service & Marine Market re-search and rent analysis for thecomplex of Belgrade Shipyard Ser-bia

- Bluehouse Capital Valuation of pub-lic car parks in Rijeka Croatia

- VIP (Vojvodina Investment Promo-tion) Market research for Vojvod-ina region Serbia

- EFG Bank Valuation of distressed

property portfolio Serbia

- Aviv Arlon – Retail Park Pancevoand AVIV Gate - Leasing and SalesAgents

- Neptun – Leasing Agents for De-partment Store in Belgrade

- MPC Properties – Leasing Agentsfor Knez Mihailova and Tri ListaDuvana

- Bluecenter – Leasing Agents forOffice Building

- DIS – Expansion Consultants forRetail Chain in Serbia

- Eurasian Real Estate – Develop-ment Consultants for Retail ParksThroughout Serbia

- TUS Real Estate – Selling Agentsfor Land lots

- Dallas Furniture – Leasing Agentsfor Departments Store in Belgrade

- Mr. Bricolage - Expansion consult-ants for retail chain in Serbia

- Forma Ideale –Leasing agents forSubotica and Pancevo estates

- EFG REIC – Leasing agents forTerazije Retail Units

- Danex Gradnja – Exclusive SalesAgents for Residential Complex onVracar

- Pharmos International PharmacyChain - Expansion Consultants inSerbia

- Pluto Capital – Selling and LeasingConsultants

What are your predictions regard-ing the prices of real estate in thenext year?

I think the entire professional com-munity understands very well thatthe recovery process for the marketwill be long and arduous, and wesee 2010 as the period of stabiliza-tion and synchronization.

Realistically speaking, the businessspace sector will bear most of theconsequences of the World FinancialCrisis, but we also expect the banksto finally become more sensitive tothe need for financing developmentprojects, which is crucial in order tomake the first step towards definit-ive market recovery.

Danos Serbia| 21 | Market Report 2009

Danos Company operates for 42years in Greece and Cyprus, while in2009 offices in Belgrade, Tirana andSofia were opened.

Since 2008 Danos is a member ofthe international network of BNPParibas. In particular Danos is part ofspecialized property division BNPParibas Real Estate, which operatesthrough 80 offices in Europe, MiddleEast and the United States, havingover 3.500 employed professionals.

Market Survey was prepared byValuations and Investment Advisoryteam – Danos Serbia.

Contact:BELGRADE, SERBIA6, Vladimira Popovica Str.Tel.: +381 - (0)11 260 06 03Fax: +381 - (0)11 260 15 71E-mail: [email protected]: www.danos.rs

Country Manager:

Jovan [email protected]

Valuations and Investment AdvisoryConsultant:

Srdjan [email protected]

ABU DHABIAl Bateen AreaPlot No. 144, W-11New Al Bateen MunicipalityStreet 32RO. Box 2742Abu Dhabi, UAETel.: +971-505 573 055Fax: +971-44 257 817

BAHRAINBahrain Financial HarbourWest Tower16th FloorPO. Box 5253ManamaTel.: +971-505 573 055Fax: +971-44 257 817

BELGIUMBlue TowerAvenue Louise 326B14 Louizalaan1050 BrusselsTel.: +32-2-646 49 49Fax: +32-2-646 46 50

DUBAIEmaar SquareBuilding No. 1, 7th FloorP0. Box 7233Dubaï, UAETel.: +971-505 573 055Fax: +971-44 257 817

FRANCE13 boulevard du Fort de Vaux75017 ParisTel.: +33-1-55 65 20 04Fax: +33-1-55 65 20 00

GERMANYGoetheplatz 460311 FrankfurtTel.: +49-69-2 98 99 0Fax: +49-69-2 92 91 4

INDIA403, The Estate121, Dickenson RoadBangalore - 560042Tel.: +91-80-40 508 888Fax: +91-80-40 508 899

IRELAND40 Fitzwilliam PlaceDublin 2Tel.: +353-1-66 11 233Fax: +353-1-67 89 981

ITALYCorso Italia, 15/A20122 MilanTel.: +39-02-58 33 141Fax: +39-02-58 33 14 39

JERSEY4th Flooi: Conway HouseConway StreetSt HelierIersey JE2 3NTTel.: +44-15 34-62 90 01Fax: +44-15 34-62 90 11

LUXEMBOURGEBBC, Route de Treves 6BIOC D2633 SenningerbergTel.: +352-34 94 84Fax: +352-34 94 73

ROMANIAUnion International Center11 Ion Campineanu StreetSector 1Bucharest 010031Tel.: +40-21-312 7000Fax: +40-21-312 7001

SPAINMaria de Molina, 5428006 MadridTel.: +34-91-454 96 O0Fax: +34-91-454 97 85

UNITED KINGDOM90 Chancery LaneLondon WC2A 1EUTel.: +44-20-7338 4000Fax: +44-20-7430 2628

MAIN LOCATIONS

ALBANIA*Danos & AssociatesBlvd, Deshmoret e KombitTwin Towers - Building 211th FloorTiranaTel.: +355-4-2280488Fax: +355-4-2280192

AUSTRIA*Dr Max Huber & PartnerDr Karl-Lueger-Platz 51010 ViennaTel.: +43-1-513 29 39 0Fax: +43-1-513 29 39 14

BULGARIA*Danos & Associates28, Hristo Botev BoulevardSofiaTel.: +359-2-9532314Fax: +359-2-9532399

CANADA*Cresa PartnersTel.: +1-617-758 6000Fax: +1-617-742 0643

CYPRUS*Danos & Associates35, I. Hatziosif Ave2027, NicosiaTel.: +357-22 31 70 31Fax: +357-22 31 70 11

GREECE*Danos & AssocIates1, Eratosthenous Str.11635 AthensTel.: +30-210 7 567 567Fax: +30-210 7 567 267

JAPAN*RISA Partners5F Akasaka intercity 1-11-44Akasaka, Minato-ku107-0052 TokyoTel.: +81-3-5573 8011Fax: +81-3-5573 8012

NETHERLANDS*Holland Realty PartnersIJ. \/iottastraat 331071 IPAmsterdamTel.: +31-20-305 97 20Fax: +31-20-305 97 21

NORTHERN IRELAND*Whelan Property Consultants44 Upper Arthur StreetBelfast BT1 4GITel.: +44-28-9044 1000Fax: +44-28-9033 2266

POLAND*Brittain Hadley EuropaWarsaw Financial Centre13th floorEmilii Plater 5300-113 WarsawTel.: +48-22-586 31 00Fax: +48-22-586 31 16

RUSSIA*Astera10, b_2 Nikolskaya Str.Moscow, 109012Tel./Fax: +7-495-925 OO 05

SERBIA*Danos & AssocIates6, Vladimira Popovica StreetOffice B3111000 BelgradeTel.: +381-11-2600 603Fax: +381-11-2601 571

SLOVAKIA*Modesta (Dr, Max Huber &Partner Group)Heydukova 12-14811 08 BratislavaTel.: +421-2-3240 8888Fax: +421-2-3214 4777

SWITZERLAND*NaefAvenue Eugene-Pittard 14-16Case Postale 301211 Geneva 17Tel.: +41-22 839 39 39Fax: +41-22 839 38 38

UKRAINE*Astera2a Konstantinovskaya Street04071, KievTel.: +38-044-501 50 10Fax: +38-044-501 50 11

USA*Cresa Partners200 State Street13th FloorBoston Massachusett 02109Tel.: +1-617-758 6000Fax: +1-617-742 0643

Falcon Real Estate570 Lexington Avenue32nd FloorNew York, NY 10022Tel.: +1-212 271-5445Fax: +1-212 271-5588

*Alliance

Documents

MARKET REPORT 2009beobuild.rs/visuals/data/media/16/Market_Report_2009.pdf · process of “Zastava Automobili”. The total amount of FDI in 2009 de-creased by 25% in comparison