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, Niš, 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.

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 planning their expansion strategies.

2023 Is A Special Year

NOVASTON real estate platform marks a decade of successful operations in Serbia and the region (especially in Croatia), with over 40 strategic projects and managing a total of 500,000 square meters 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 to strategically position 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.

18 December 2022

The reconstruction of the Technical Faculties will begin at the end of 2023

The competition for the conceptual solution for the reconstruction of part of the University Center in Belgrade, which was held in April last year, was the first step in the preparation of the project for the extension and expansion of its capacities. The winning conceptual solution in the competition was created by the project bureau “4MIND doo” from Belgrade, and the block in question, which is located on

King Alexander Boulevard, contains the Faculty of Electrical Engineering, Civil Engineering, Architecture, Mechanical Engineering, and Technology and Metallurgy, as well as the University Library “Svetozar Marković” and the building of State Archives of Serbia. The intra-block zone between the faculty buildings has been an unused and devastated space for years, so the reconstruction project of the entire block involves planning, architectural and functional integration of the space, which will result in the connection of students of all faculties through a series of common contents. The reconstruction project of the University Center is in the process of drawing up technical documentation, and construction work could begin in the fall of 2023 at the earliest.

03 February 2023

The former turning point for steam locomotives near the Mostar loop in Belgrade will be reconstructed and turned into a multi-purpose center by the spring of 2025. The works have officially begun and are being carried out according to the project of a new architectural-urban solution, which was authored by Anđela Karabašević

Sudžum and Vladislav Sudžum, founders of the Belgrade studio AKVS architecture, which won the international competition in November 2021 with its team. It is expected that the works will last two years, where the reconstruction of the old railway turnout means the restoration of the Stove and Water Tower, as well as the construction of a new office building in the northeastern part of the site. The investor of the project is the Government of the Republic of Serbia, through the Office for Information Technologies and e-Government as well as the National Platform Serbia Creates, and the total value of the investment is estimated at 52 million euros.

15 March 2023

The first and oldest youth and amateur theater in Belgrade, better known under the acronym DADOV, experienced another major transformation after extensive and thorough reconstruction that was recently completed. The drama studio was founded back in 1958, and it has been in its current location since 1969 when it was moved to a new building purpose-built for its needs. After more than half a century of intensive use, the time has already expired for the

17 March 2023 reconstruction of the entire building, and in December 2021, work on the reconstruction, which lasted over a year, finally began. The theater now has over 900 square meters of usable space, as an additional 400 square meters were added during the reconstruction in order to introduce or optimize all the necessary functions. Practically everything related to the work process has been completely reconstructed and technically improved, and some functions for the realization of performances and benefits for actors are available for the first time. After the reconstruction, the theater has a large theater hall with 120 seats, which is production equipped for various other purposes, such as film screenings or smaller concerts and performances. The theater hall has slightly fewer seats than before the reconstruction, which is due to safety regulations and the need to provide access for spectators with wheelchairs.

Following a year-long competition process involving some of the world’s leading architecture firms, AL_A has been selected by the UNDP to design the new Belgrade Philharmonic Concert Hall. The Concert Hall is a landmark project for the City of Belgrade and Serbia. It has been the biggest cultural investment in the region for decades. Located next to the historic Palace of Serbia in New Belgrade, the project is an extraordinary commitment to building a brighter, more sustainable future for the city. With multiple performance, rehearsal, and creative spaces, including a symphonic concert hall with 1,600 seats, the Hall will be the first of its kind in the Balkans: an internationally recognized platform for world- class musical performance and a magnetic civic gathering place. AL_A leads an international team including landscape designers VDLA, engineers AFA Consult, and local architects Zabriskie. They join Arup, who continues their role in acoustic and theatrical design. Ana Brnabić, Prime Minister of Serbia, says: ‘The Belgrade Philharmonic Concert Hall is the largest cultural infrastructure project in Serbia and the region, and will be one of the largest in Europe itself. I am proud that this decades-long dream of our professional musicians, young talents, music lovers, and the people of Serbia is finally coming true in such a beautiful shape. I believe that this Hall will be one of the greatest cultural lega- cies of this Government. Investing in culture and in education is crucial for setting the pillars of a successful and strong modern country. This is something we have begun with numerous similar cultural projects. This Concert Hall will most definitely become a new landmark of Belgrade and attract visitors and tourists to our country. Furthermore, its quality programs will enrich our citizens’ cultural life. I strongly believe it will become another regional hub for making contacts and knowledge exchange, with the flow of creativity, ideas, and experience of domestic and foreign artists.