Belgrade City Report City Reports
GDP Growth Q4 (y-o-y) Net Salary February Economy / Investment Economics 1.2% Inflation February (y-o-y) 1.5% 450 Unemployment Rate Q4 18.5% Retail Sales Index February (y-o-y) 11.8% Tourist Arrivals Belgrade February (y-o-y) 26.9% Industrial production February (y-o-y) 14.0% Source: Statistical Office of the Republic of Serbia; Oxford Economics Prime yields was concluded with the opening of the first two chapters of the EU membership negotiations, nearly two years after talks had been formally launched. Fitch rating agency upgraded the country s outlook from stable to positive. Above expectation GDP growth has enabled the government to call an early election, which would allow the acceleration of IMF driven reforms. This will further enable the growth rate expected to pick up to 1.5% in 2016 and 2% in 2017. 8.0% 8.5% 10.25% Shopping Centres Office Industrial Key Transactions The beginning of the year was highlighted with increased investment activity. One of the prime shopping centres, Delta City, has been acquired by South African REIT Hyprop Investments and Homestead Group Holdings. The acquisition included the Delta City shopping centre in Podgorica (Montenegro). Name Property type Price (million) Seller Buyer Delta City Shopping centre 127.7 Delta Real Estate Hyprop Investments/ Homestead Group Holdings
629,300 641,300 Office Market Supply Office stock (sq m) / New supply In the first quarter 2016, Airport City phase IV building 1 was delivered and increased the A Class office stock in the New Belgrade area. Following this, the investor commenced construction of the second building. Although construction activity is growing, the level of newly delivered projects is limited, resulting in a very low vacancy level. Property Submarket Size (sq m) Airport City IV phase (Bldg 1) New Belgrade 12,000 10,000 12,000 Office stock New supply Vacancy rate 2014 8% 4.2% 3.8% Demand Market activity was dominated by net take-up underpinned by the relocation and expansion of existing occupiers. The most active sector was IT, followed by the legal and the insurance sectors. A Class B Class 2.5% 5.4% Future office projects Prime rents Property Submarket Size (sq m) Status 15-17 Deneza office builidng New Belgrade 2,700 Under construction Green Square City center 2,700 Under construction Navigator Business Center New Belgrade 14,900 Under construction GTC Fortyone 2nd phase New Belgrade 8,000 Under construction Sirius Offices 1st phase New Belgrade 18,500 Under construction Airport City 4th phase (Bldg 2) New Belgrade 12,000 Under construction Atrijum 63 New Belgrade 5,000 Under construction 2014
Retail Market Supply Prime shopping center supply ( 000 sq m) Construction activity remained dominant in the secondary cities where the number of new retail parks continued to grow. From the beginning of 2016, no larger scale retail schemes were delivered in Belgrade. Name Type Developer City Size (sq m) 128 128 176 Shoppi Retail Park MPC Properties Subotica 10,000 Stop Shop Retail Park Immofinanz Niš 13,000 48 2016 2017 Existing stock New supply Belgrade Prime Shopping center density 78 sq m per 1,000 inhabitants Demand Zara Home and Calvin Klein Underwear opened their first stores in Ušće shopping centre 4F announces market entry Existing retailers continue to expand in prime and secondary locations Scheme Ušće shopping centre Brand name Zara Home / Calvin Klein Underwear Rental levels Future retail projects in Belgrade 40-60 Name Type Developer Size (sq m) Opening year Rajićeva SC Ashtrom group 15,300 2017 25-27 Belgrade Plaza SC Plaza Centers 32,300 2017 Ikea BB Ikea 30,000 2017 Shoppi Borca RP MPC Properties 13,000 2016 Ada Mall SC GTC 32,000 2018 Shopping Centre High street SC = Shopping centre, RP = Retail Park, BB = Big Box
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Industrial Market Supply / Stock ( 000 sq m) Construction activity was focused on secondary cities which have witnessed the delivery of several owner occupied facilities. There were no new industrial schemes delivered in Belgrade since the beginning of 2016. 478 sq m 231 sq m Property City Type Size (sq m) Geox Vranje Light Industrial 20,000 Greater Belgrade Belgrade Industrial production index Demand 120% 115% 110% 105% Strong demand from manufacturing companies Expanding retail market will further underpin development of the industrial market Gefco Group to enter the market 100% 95% Source: Statistical office of Repblic of Serbia Future projects Prime Rents Future construction activity will remain reliant on owner occupied schemes, focused in Greater Belgrade and secondary cities. Investor Location Type Lidl Nova Pazova Distribution centre Eyemaxx 2nd phase Stara Pazova Distribution centre Mei Ta Obrenovac Light industrial 2014 4-5 4-5 4-5
Andrew Peirson Managing Director +381 11 785 0579 andrew.peirson@eu.jll.com Jana Golubović Research Analyst +381 11 785 0589 jana.golubovic@eu.jll.com Featured Research: Belgrade Office Pulse report Belgrade Retail Pulse report Belgrade Industrial Pulse report www.jll.rs COPYRIGHT JONES LANG LASALLE IP, INC. 2016. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.