Novi Sad Property Market 2017

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1 CBS International doo

2 The first western-type shopping centre will be developed in Novi Sad Image 1 - Novi Sad retail market in numbers Traditional shopping centers (western-style, neighborhood malls, department stores) 32,300 49% 66,300 sq m GLA in Novi Sad 34,000 51% Specialized formats (Retail parks) Source: CBS International GLA Gross Leasable Area 2017 SUMMARY Being the second largest city in Serbia and the economic and administrative center of Vojvodina, Novi Sad has a significant potential for development and therefore represents an attractive destination for the investors Residential market is the most active segment in Novi Sad property market, with 4,505 residential units sold in 2017 Modern retail stock currently stands at the level of 66,300 sq m of GLA South-African investment fund NEPI works intensively on its large shopping mall Promenada of 47,000 sq m Office market is the least developed property segment, however, new projects are under construction, which will increase the overall offer CBS Research 2

3 OFFIC MARKET The modern office market in Novi Sad could be considered as undeveloped, with several owner-occupied small-scale office buildings and a portion of office space built within mixed-use complexes. However, in the recent years, several projects have been developed along Oslobodjenja Boulevard, which has attracted a large number of international companies over the years and has become the important city s commercial destination. The project which will definitely change Novi Sad s modern office supply is Pupin s Palace, located in Novi Sad downtown, developed by the local renowned investor Galens. The first modern Class A office building will be developed within mixeduse complex and it will comprise app. 13,500 sq m of GLA of modern office space, while the residential part will comprise app. 11,000 sq m of GLA. Pupin s Palace 30,000 sq m GLA Analysing per sector of business, ICT sector is the most active segment, having in mind that the development of ICT sector is the priority for Novi Sad and the local authorities. Some efforts have already been made with the establishment of IT Business Incubator and Vojvodina ICT cluster, seated in Novi Sad. With regard to the rental levels, the average rents in the city center usually range between EUR 8-11/sq/month, while the very attractive premises in the city centre can go up to EUR 12/sq m. The appearance of Class A office building will definitely boost the average rents in the city centre. The office space at less attractive areas usually range between EUR 4-7/sq m per month. RETAIL MARKET The total modern retail stock in Novi Sad stands at the level of 66,300 sq m of GLA, whereas the share of the traditional formats equals 49%, amounting app. 32,000 sq m. With app. 350,000 inhabitants, Novi Sad has 194 sq m of modern shopping centres per 1,000 inhabitants. When it comes to the future deliveries, South-African fund NEPI commenced the construction of Novi Sad s first westerntype shopping center, located in Oslobodjenja Boulevard. This large-scale project, named Promenada, will comprise app. 47,000 sq m of modern retail space, upon completion. Although Novi Sad hosts several retail projects, high street zone remains preferred retail destination, as numerous brands have their stores in Novi Sad high street zone. The most favorable retail locations are Zmaj Jovina, Modena and Dunavska street. CBS Research 3

4 When it comes to the rental levels, the main pedestrian zones, such as Zmaj Jovina Street, Modena and Kralja Aleksandra Street, command the highest rental levels, which vary between EUR 30-60/sq m/month depending on the size, conditions of retail units and position. Rental levels around Oslobodjenja Boulevard and Jevrejska Street vary between EUR/sq m. The asking rental levels in shopping centres vary between EUR 10-15/sq m per month, depending on the size of the leased area, position, and type. RESIDENTIAL MARKET Similarly to majority of the cities in Serbia, residential property market is the most attractive market segment in Novi Sad. According to the official statistics 1,264 new apartments were delivered to Novi Sad residential market in 2016, which indicates significant increase in the construction activity, considering that only 705 residential units were completed in The number of sold apartments strongly exceeds the number of completed residential units several years in a row, which points to the strong demand. As per the future supply, local investors are the most active developers on Novi Sad residential market, with the several on-going large-scale residential projects. By far the most ambitious project is residential complex Kraljev Park, located along Kraljevica Marka Street in Rotkvarija settlement, which commenced construction in October The project, developed by Galens company, will comprise 583 units in four lamellas, and completion is scheduled for 2018 year-end. The same investor is aiming to deliver a new portion of residential units within the mixed-use complex Pupin s Palace, whereas the residential part of the project will feature around 200 apartments. After several successful and sold out residential projects in Novi Sad, City Gradnja commenced the construction of the first modern high-rise project in Novi Sad, situated in Brace Ribnikar Street, in Grbavica settlement. This 12-storey complex will have app. 14,000 sq m of residential and commercial space, 126 residential units and 190 parking spaces. The completion of this project is scheduled for June Chart 1 Residential supply vs. demand 1, , , ,264 Completed units , Sold units 4,505 Source: Republic Geodetic Agency, Total number of registered S&P agreements Statistical Office of the Republic of Serbia, Number of constructed units; data for 2017 will be published in July 2018 CBS Research 4

5 Novi Sad Property Market, Q NEPI Promenada 47,000 sq m GLA Galens, Kraljev Park CONTACTS Dragan Radulovic Regional Managing Director Boris Stevovic Head of Branch Office Novi Sad Tamara Kostadinovic Head of Market Research Serbia CBS INTERNATIONAL OFFICE CBS International doo 88b, Omladinskih brigada Str Belgrade, Serbia NOVI SAD BRANCH OFFICE CBS International doo 1, Mite Ruzica Str Novi Sad, Serbia CBS Research 5