Real Estate
- For the third consecutive year, Serbia was awarded as the largest Greenfield investment location in SEE by OECD.
- Total value of international real estate projects in 2005 reached $181 million, while in the first nine months of 2006 alone they amounted to $153 million.
- Office market shows clear signs of strong development.
- The net rental rates for Class A office premises in Belgrade ranges between €18-24 per sqm, while class B office space commands levels of €13-18 per sqm per month
Following the 2004 award for Investor of the Year in South East Europe (SEE) by the Organization for Economic Co-operation and Development (OECD) presented to Ball Packaging Europe (USA), Metro Cash & Carry (Germany) was the winner in 2005 and this year Airport City Belgrade (Israel) won as the largest Greenfield investment in the region.
Growing investment opportunities for international real estate developers in Serbia have been reflected in recent FDI figures. Total value of their projects in 2005 reached $181 million, while in the first nine months of 2006 alone they amounted to $153 million.
Prepared in cooperation with Colliers International
The Belgrade speculative office market shows clear signs of strong development. Since the beginning of 2005, the total inventory of Class A and B office premises increased by 18.5%, reaching its current level of 226,000 sqm of leasable area. It must be noted that the intense development of office inventory in Belgrade started after 2000, and that the presented market characteristics are directly influenced by the modest inventory size.
130,500 sqm of Class A and B office leasable space is located in Belgrade's Central Business District (which includes downtown and the central area of New Belgrade municipality), while the remaining 96,500 sqm is located in the wider center and suburban areas of the city. The largest number of new completions occurred in the area of New Belgrade, reinforcing its leading position in the overall country's real estate development.
Due to steadily increasing inventory, rental levels for Belgrade’s Class A and B office space have also recorded a slight but steady decrease during the past 12 months. The net rental rates for Class A office premises in Belgrade range between €18-24 per sqm per month. Net rental rates for Class B office space command levels of €13-18 per sqm per month depending on location, accessibility, parking opportunities and amenities. Through the end of this year, rents should remain at their current levels, but the slight decreasing trend is expected to continue during 2007. If take-up and development completions follow the expected growth pattern, there is a strong possibility for this decrease.
Sales prices stabilized during the second quarter of 2006 and recorded a marginal increase compared to previous years. An increase in prices is recorded in New Belgrade, especially in the blocks along Jurija Gagarina Street. In general, sales prices in prime residential areas range between €1,200 and €2,000 per square meter. Most of the projects marketed as prestigious properties have asking prices above €2,000 per square meter. However, due to various factors including quality and location, their absorption rates have remained modest.
