Mia Zečević – Office and Logistics space still in focus

Despite the uncertainty due to the pandemic, the war in Ukraine, and the energy crisis, as well as the announced global recession – the commercial real estate market in Serbia continues to expand

Excluding residential real estate, the influx of foreign investments primarily drives further office and logistics real estate development, especially in industries recognized as the most profitable such as automotive, food, electronics, shared services, and ICT services. The market “attractiveness” of real estate is determined not only by good locations but also by its energy efficiency and independence from rising energy prices. Also, investments in real estate projects in seasonal tourist destinations are becoming more popular. These properties can provide a good return on investment with the help of a professional property management team.

Office space market

The Serbian office market experienced a huge expansion and got more than 230,000 square meters of additional new office space in the last two years. The most sought-after properties are the hybrid model office space in the capital city of Belgrade – especially the CBD (Central Business District). The total supply of modern office space in Belgrade reached approximately 1,254,000 square meters, with a current prime yield of 7.5 to 8% by the end of the third quarter of 2022. There is a constant increase in interest by IT companies for office space in cities like Novi Sad, Nis, and Kragujevac as well.

The low vacancy rate and the influx of foreign companies (especially from the market affected by the war) had a significant impact on the demand and, thus, the increase in the rental price, regardless of the number of square meters. Operating costs have remained relatively stable, but we expect all costs to increase in 2023 due to the expected rise in energy prices and the increasing rate of inflation.

For the last three years, the logistics sector has had the greatest potential for development in Serbia

Logistics sector

For the last three years, the logistics sector has had the greatest potential for development in Serbia, and that has been influenced by the rise of online shopping and increased complications in goods transportation. Logistic projects are mainly being developed in the surrounding areas of large cities – locations with good transit accessibility and low business costs.

In the last year, the total stock of logistics space increased by 16%, and the vacancy rate is at an extremely low level for newly built and existing facilities. Also, the rent level remained stable.

Retail market

The retail market in Serbia has significantly slowed down during the pandemic, but existing retail projects are doing well, and many have been expanded with new phases of development. Numerous new retail projects are in the pipeline throughout Serbia too.

In 2022 rental prices were increased in the range of 9% to 15%. Maintenance costs, especially energy costs, have increased from 5% upwards, but their growth is expected in 2023 – more than 12% due to the global energy crisis. Despite the negative impacts on the retail market, retailers still show positive performance records, and many international retailers remain in plans for their expansion strategies.

2023 is a special year for Novaston

NOVASTON real estate platform marks a decade of successful work in Serbia and the region (especially in Croatia), with over 40 strategic projects and managing a total of 500,000 m2 for more than 15 foreign and domestic clients (IKEA Serbia, CPI Property Group, NEPI Rockcastle, Schneider Electric…) In the next decade company’s goal is to expand the services it provides – from support in project development, property management services, valuation, mediation in the sale and letting of real estate, and marketing, but also by strategically positioning ourselves in projects as a business partner and investor.

NOVASTON is a recognizable company in the retail sector, and in recent years it has been strategically focusing its operations on the office and logistics sectors, as well as its positioning in the hotel management industry.

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