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Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
According to Oxford Economics, GDP growth slowed to an estimated 1.9% in 2017 due to subdued EU/Russian export markets and fiscal restraint aimed at lasting deficit and inflation reduction. Progress with these reforms and an agricultural rebound after last year’s weather issues, have created conditions for a recovery to 2.7% growth in 2018 and then about 3% in the period between 2019 and 2021.
Growth is set to be more stable in the forecasted period, with the reduced budget deficit helping to improve the trade balance and keep the current account deficit small enough to be financed by FDI and remittances, ensuring a more stable exchange ratethat further tightens control over inflation. Lower inflation can allow a continued decline in interest rates, sustaining the growth of investment, which will drive medium term growth along with rising exports and recovering household expenditure as real incomes slowly rise.
Economy
Unemployment rateQ4 2017, Belgrade
GDP Growth
Q1 2018 y-o-y
Net Salary February 2018,
Belgrade
Inflation March2018 y-o-y
Retail Sales, March 2018 y-o-y
Industrial production, March 2018 y-o-y
4.5% 1.4% 14.3%
€494 2.2% 4.1%€
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Prime Yields
Recent Investment Transaction
IndustrialShopping Centre Office
8.00% 8.50% 9.75%
Sector Property City Seller Buyer
Office Belgrade Business Center Belgrade Centrice Real Estate Gmbh Global Trade Centers (GTC)
Retail Mercator Centre Belgrade Mercator MPC Properties
Stable economic growth, government reforms and other incentives have secured a stable influx of investments in Belgrade’s real estate market. The appeal of the market has been confirmed by the continuous expansion of investors already present on the market.
Such an example is the acquisition of Mercator Center, one of Belgrade’s modern shopping centers, by well-known local investor MPC Properties in the first quarter of 2018. Previously, during 2017, international investor GTC acquired Belgrade Business Center, one of the city’s modern office buildings located in the central business district. With this acquisition, GTC’s portfolio in Belgrade totals nearly 100,000 sq m of Class A office stock.
Source: JLL, 2018
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Office stock in Belgrade (sq m)
Previous office completions• No new large-scale office completions in the first
quarter of 2018
• More active period expected ahead with several projects in the pipeline
• Most active submarket remains to be New Belgrade with increasing activity recorded in the city center
• Secondary cities, particularly Novi Sad, note higher levels of construction activity
• Market activity was dominated by net take-up, driven mostly by relocations in New Belgrade
• The most active sector was IT, followed by the construction industry
Property Submarket Size (sq m)
Sirius offices phase 1 New Belgrade 14,500
N House phase 1 New Belgrade 5,800
Atrijum 63 New Belgrade 5,000
GTC Fortyone 3rd phase New Belgrade 10,000
Source: JLL, 2018
Source: JLL, 2018
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Class A Stock Class B Stock
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Vacancy rate based on office building class
Prime rental levels (€/sq m/month)Future office projects
€15 - € 16.5
Source: JLL, 2018
Source: JLL, 2018 (*whole project size)
Project Size (sq m) Status
Green Heart *46,000Under
construction
Business Garden 16,000Under
construction
Ziegel House 5,000Under
Construction
Usce Tower 2 22,000 Planned
Skyline Belgrade 30,000 Planned
NavigatorBusiness centre 2
27,000 Planned
Sirius Offices 2nd phase
10,000 Planned
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Total Vacancy Rate Class A Vacancy Rate Class B Vacancy Rate
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Modern shopping centre stock in Belgrade (sq m)
Prime Shopping centre density in Belgrade
105 sq mPer 1,000 inhabitants
Source: JLL, 2018
Property Type Size (sq m) City
Stop Shop Retail Park 7,200 Požarevac
Stop Shop Retail Park 8,200 Vršac
Latest retail deliveries in Serbia
Source: JLL, 2018
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2012 2013 2014 2015 2016 2017 Q1 2018
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Future shopping centres in Belgrade
Demand Rental levels (€/sq m/month)
Shopping centres
€27 - €29
High street
€40 - 60
Property Format Size (sq m) Completion year
Ada Mall Shopping centre 34,000 2018
Big Fashion Vidikovac Shopping centre 65,000 2019
BW Galerija Shopping centre 93,000 2020
• Several brands are interested in entering the market
• Retailers present on the market remain active
Retailer activity in Q1 2018
Source: JLL, 2018
Source: JLL, 2018
Location Brand
Zemun Park, NEST Kraljevo Maxi Supermarket
Novi Pazar, Aviv Park Zvezdara Nefa Furniture
Stadion Voždovac Meli Melo, Women Secret
Ušće Shopping Center Gagliardi
Big Fashion Tehnomanija
Capitol Park Sombor Intersport
Vivo Shopping Park Jagodina LC Waikiki
Capitol Park Šabac H&M
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Recent completions
Industrial stock (sq m)
Belgrade Greater Belgrade
• Construction activity in the first quarter of 2018 was mostly focused within secondary cities
• Numerous new projects and project expansions to be completed in secondary cities
• Several speculative schemes in the pipeline for the Greater Belgrade region
• Local municipalities continue to invest in infrastructure and offer incentives
Source: JLL, 2018
292,000
599,000
Scheme Type Location
Yumco Light industrial Bujanovac
BizLink Light industrial Prokuplje
Agromarket Distribution warehouse Inđija
Prva petoletka-namenska Light industrial Trstenik
Leoni Light industrial Niš
Belgrade City Report Q1 2018COPYRIGHT © JONES LANG LASALLE IP, INC. 2018
Future projects
Industrial production index Prime rents (€/sq m/month)
Q1 2018
€4 - €5
• Several leasing transactions and acquisitions have been recorded on the market
• Demand in the first quarter of 2018 was mostly driven by the automotive sector
Source: Statistical Office of the Republic of Serbia, 2018
Source: JLL, 2018
Project Type Location
Mei Ta Light industrial Obrenovac
Yura Light industrial Leskovac
Albon Light industrial Ruma
Leoni Light industrial Kraljevo
Essex Europe Light industrial Zrenjanin
ZF Friedrichshafen Light industrial Pančevo
Vorwerk Autotec Light industrial Čačak
Caminada Light industrial Subotica
Tai Group Light industrial Kraljevo
LogMax Beta Distribution warehouse Stara Pazova
Industrial Park Belgrade 4 Distribution warehouse Šimanovci
92%
94%
96%
98%
100%
102%
104%
106%
Feb
-17
Ma
r-17
Ap
r-1
7
Ma
y-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
www.jll.rs
© 2018 Jones Lang LaSalle IP, Inc. 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.
Jana GolubovićSenior Research Analyst - SEE
+381 11 785 [email protected]
Vesna KićovićResearch Analyst - SEE
+381 63 235 [email protected]
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