ERVIN PAŠANOVIĆ, General Manager, Adventis Real Estate Management: CAN’T SEE THE FOREST FOR THE CRANES!

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This is a new golden age for the Serbian construction industry, and it is up to us to choose the view

Does the forest of cranes mean the renaissance of the Serbian construction industry? Does the dust behind a multitude of concrete mixers hide the new face of Belgrade? Serbia is undergoing construction! Rapid development, an increased demand for new buildings, and an impressive number of new commercial housing projects show that we have entered new cycle of economic growth. How did all of this come about? New buildings are increasingly in demand with our clients, prices are going up, waiting lists are created, and it is becoming difficult to satisfy the demand with the current offer. The legislator has managed to restore security in the business of real estate sale and rental to a large extent through three main laws: the Real Estate Brokerage Law, the Law on Notaries and the Law on Real Estate Appraisers. Agents or brokers are now licenced by the Ministry of Trade, Tourism and Telecommunications, rigorous control has been introduced and professionalism is now at the required level. Notaries are in charge of certifying purchase agreements and are a guarantee the truthfulness of the presented information, so multiple sales of the same property are practically impossible, and the assessors are obliged, in addition holding a licence issued by the Ministry of Finance, to report to the professional organizations to which they belong. Furthermore, building permit issuance has been expedited thanks to onestop-shop type of offices which are obligated to process a building permit application within 15 days. The state authorities and domestic and foreign investors have launched several large-scale projects that have bolstered the quality and the safety of new construction.

The costs associated with mortgages have never been lower, although certain indicators show that 80% of the purchased real estate was bought for cash which again shows that in order to see real development, the national GDP has to grow further so that we again have a strong and numerous middle class that can afford to buy real estate with the help of a mortgage. Market laws are slowly but surely starting to be applicable in our country too. Although, until recently, people were strongly convinced that old buildings, from the Socialist era, were more reliable, all of the aforementioned indicators actually show that most clients insist on buying housing in a new building, because they realize how much time and money is required to renovate worn-out installations, among other things. By the same token, the new Housing Loan, which stipulates a new category of professional residential building managers, significantly improves the quality of life so now, new residential quarters offer facility management as a standard clause in contracts. Companies that want to lease office space do not want to wait for a long period of adaptation, and their main requirement is having the Class A office space, with the lease price now exceeding 20 EUR/m2, on average. New developers are bringing new solutions and changing the face of Belgrade and our country. New neighbourhoods are springing in cities, we are building a new metropolis and a subway. We are just continuing to build and build with pride. In terms of figures, the estimates have shown that there is currently 850,000 square metres of available office space, and that the lease price of the B class office space ranges between 9 and 15 EUR per square metre. As for residential construction (Central Garden, Block A, West 65, Kapije Vračara, BWF), considering that 15,000 apartments were sold in Belgrade last year and that there is an estimated 17% increase in supply, we can conclude that we have a positive trend that, according to estimates, should be going on for the next two years even if no significant growth is achieved in other economic branches. I believe that, in the next period, theprices will fluctuate in line with the psychological expectations, and supply and demand, and that the bubble will not burst. Despite some of the industry’s professionals claiming otherwise, we are actually entering into a period of stability and security in the real estate sector that has always been the foundation of economy and economic growth. History is closely tied to buildings and success and development are clearly visible in historical monuments – from the Tower of Babylon to Belgrade Tower. This is a new golden age for the Serbian construction industry, and it is up to us to choose the view.

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