The ability of individual companies to continue being successful and develop will depend on the potential and speed of their responses to immediate market challenges.
CEO of NOVASTON, Mia Zečević, talks for Diplomacy&Commerce about how important are a vision and speed of adaptation in the real estate industry and says that economic and social changes that occurred during the pandemic will have a long-term effect on the real estate market.
After 2020, which was marked by people struggling to live and work during the pandemic and the emergence of what is popularly called “the new normal”, 2021 was all about the beginning of economic consolidation, but also a high degree of the real estate industry’s resilience and adaptability.
The retail sector has proven to be particularly successful, namely the concept of retail parks (open-air shopping malls), which was a more desirable option than shopping centres because shoppers can physically come into the shops while epidemiological measures were still in place. The situation has been stable for some time, shoppers have returned to their shopping habits and the pre-pandemic level of spending and attendance. Last year, there was a noticeable increase in turnover, which went up by 16% compared to 2020 in the most popular retail parks managed by Novaston.
The opening of Puls Shopping Park in Pirot, which is now operationally managed by our company, confirmed that there is still a demand for these retail spaces in the smaller cities in Serbia. This year, Ava Retail Park near IKEA will be opened and our Novaston platform will participate in the opening. In addition to new projects, existing retail parks such as STOP SHOP in Vršac are being expanded.
Demand for the business premises sector is not declining either. The offer of office stock in 2021 increased by 11% and these are mostly A class projects, with slightly fewer B projects in the city centre. Close to 100,000 square metres of business premises, mostly in Novi Beograd, will be finished soon, while the locations in the old part of the city are becoming increasingly relevant due to the infrastructure, location and prestige. An example of this is the Revolution Building, which is being built by Granit Invest in Vračar, with our Novaston Asset Management acting as an exclusive lease agent. Additionally, in the pedestrian zone, in Vuka Karadžića Street, the Rudnap Company is renovating the A-class office space. Our company is also involved in the project as a leasing partner. I should also mention Novi Sad where the Novkabel Company has been working on a high-tech energy sustainable facility for the Schneider Electric Development Centre, another project that the Novaston platform is taking part in.
Due to the increase in the supply of newly built real estate, the vacancy rate also increased and it currently stands at 6.5%, while the rent percentage remained at the same level due to the people still working from home. It is estimated that the offer of office space in the region will continue to grow. With a total stock of 1 million square metres, Serbia ranks third in the region, but also the first regarding prime rent in Belgrade (16.5 EUR/sqm). The rapid development of the logistics sector should also be mentioned. The growth of this sector is due to local economic development, a greater influx of foreign investments, the rapid expansion of e-commerce, and recovery from the pandemic-induced crisis.
“I should also mention Novi Sad where the Novkabel Company has been working on a high-tech energy sustainable facility for the Schneider Electric Development Centre, another project that the Novaston platform is taking part in”
In 2021, apartments were still the most sought after type of property on the real estate market, especially apartments under construction in Belgrade. The increase in the price of a square metre of residential properties, coupled with high demand, was a result of more expensive building materials, the cost of contractors’ services and the lack of a workforce. On the other hand, the hotel sector experienced the biggest challenges. Still, even in the hotel industry, having a vision and readiness to realize it proved to be crucial. The Novaston platform is engaged in a large hotel project called Petram Resort and Residences in Istria. This is a system of 252 luxury properties, spanning about 40,500 square metres, which is based on the development of the hotel concept, brand positioning, opening, booking and management including Facility and Property Management.
The economic and social changes that occurred during the pandemic will inevitably have a long-term impact on the ever-changing real estate market. The ability of individual companies to continue being successful and develop will depend on the potential and speed of their responses to immediate market challenges. In the medium and long term, the new normal has changed the requirements of clients and companies, and professional and innovative action will be crucial for positioning the real estate industry on the domestic and regional scene.