Real Estate Serbia 2018

FOCUS ON

REAL ESTATE SERBIA

2018

DI PLOM ACY

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COM M E RC E

In the tide of new investments in recent years and the constant growth of the construction sector in Serbia, Konstruktor Group, as a general contractor, has managed to climb to the top of the construction companies in our country.

The company’s key competence is the complete implementation of the “design and build” and “turn-key” concepts in the construction, where contractors engage just one company from the outset to the end of the works and thus have one entity that is responsible for the entire process. The main condition for this is that the construction company has to have strong design and execution competences to carry out the whole process without difficulty.

The Konstruktor Company has built over 150 facilities in line with the turn-key concept, and another 100 objects according to the design and build concept.

Konstruktor designs and constructs all types of high rise facilities of modern concept and design.

Production halls and logistic facilities of all types, sizes, purposes and technical difficulty.

Modern warehouses in line with the latest global standards.

Contemporary retail parks.

State-of-the-art business buildings, hotels and residential complexes.

Different engineering objects, bridges, silos, steel structures, energy facilities...

Konstruktor has been developing and building in accordance with market demands and, in the last 15 years of its operations, the company became specialized in construction of facilities of all sorts and purposes. With the team of over 50 engineers of all profiles, more than 100 direct employees and up to 500 construction workers, Konstruktor is ready to respond to every request coming from the Investor.

Maximum savings and Investors re-engagement Konstruktor are at the core of our business strategies.

Konstruktor. Because WE construct YOUR vision! www.kkonsalting.com

AVIV ARLON RETAIL PARK

LIDL, BUSINESS BUILDING

GREEN AVENUE, RESIDENTAL COMPLEX

STOP SHOP (1,2,3,4), RETAIL PARK

MARRIOT HOTEL

GRUNDFOS, PRODUCTION COMPLEX

CG FOODS EUROPE, PRODUCTION AND BUSINESS COMPLEX

JT INTERNATIONAL (1,2), WAREHOUSE, PRODUCTION COMPLEX

Oslobođenja 10, Rakovica, 11000 Belgrade, Serbia +381 11 2562 231 office@kkonsalting.com www.kkonsalting.com

Focus on

IV ANA MI H A J L O VI Ć

R E A L E S TAT E S E R B I A

EXPLOSIVE INVESTMENT GROWTH

I N T RO

Ten years after the onset of the global economic crisis, which was instigated by the collapse of the mortgage market, the real estate sector in Serbia now stands on firm ground, judging by the number of active construction sites. he road to recovery of the real estate sector in Serbia has been quite long. The detrimental effect of the economic crisis was reflected in a 50% decline in sales, prices that went down by up to 30%, as well as the total drop in construction activity. During those years, it was expected that state-funded residential construction improve situation in real estate market, like development of the Stepa Stepanovic residential project in Belgrade, with the construction of the 4,616 flats beginning in 2011. In terms of foreign investors, the real estate mar-

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ket in Serbia was considered risky only four years ago. This was due to the unstable economy, a lack of legal security, unresolved property and legal issues, and the poor infrastructure, while banks were not ready to take on the investment risk. The Law on Spatial Planning and Construction, adopted in 2009, was assessed as being very detrimental to investors. And the market had other demands as there was a severe lack of business and residential space in 2014, especially in Belgrade.

According to experts, the real estate market was the last one to recov-

The average surface of the sold apartments in new buildings in the second half of 2017 is 56 square meters

er, and the return to the pre-economic crisis took place only in 2016. Also, legal changes became the driving force behind the market growth. The Law on Land Conversion, as well as the introduction of electronic building permits, was essential for the commencement of construction activity in Serbia. Still, the relevant legislation needs to be further harmonized.

The real estate market in Serbia is growing which can be seen from the fact that there are over 28,000 currently active construction sites and 14.4% more building permits issued in the first quarter of this year relative to the same period in 2017. Out of 3,599 issued permits, 2,753 relate to the existing building work and 50.5% to the construction of new buildings. The biggest number of permits was issued in Vojvodina, as many as 1,118, followed by the region of Ĺ umadija and Western Serbia (1,042), and then the region of South and East Serbia (597). The least number of licenses this year was issued in Belgrade - only 390.

As the data collated by KPMG in the first half of 2017 shows, foreign developers, from South Africa, Israel and Austria, dominate the financing and construction of real estate in Serbia. There was also an increase of investments in the construction of commercial real es-

tate, while half of the funds were invested in the retail sector. The KPMG survey also showed that investors in Serbia had a 9.25% return on their business premises, 7.75% on retail outlets and 11.25% on investments in industrial projects.

The average bank loan, granted to this sector, amounted to between 10 and 13 million euros.

In terms of the transaction size, the biggest transaction executed last year was the Israeli company, BIG Shopping Centres acquiring the Belgrade Plaza Shopping Mall in Karaburma. The Israeli company has also launched the construction of a new 120,000-square-metre facility, worth 150 million euro, which is expected to be finished by the end of 2019. The Austrian Immofinanz, the Czech RC Reinvest, and the Israeli Aviv Arlon have also had significant investments, with the latter one announcing the construction of retail centre throughout the country. In Novi Sad, NEPI from South Africa, has begun the construction of the Promenade Mall, spanning 50,000 m2, which should be completed by the end of this year.

An increased interest in building shopping centers and retail parks in Serbia is a result of the oversaturation

11 more are planned for next year.

The value of the work executed by the contractors from Serbia in the first quarter of this year increased by 19.7%, expressed in current prices, while the number of apartments increased by 69.6%, expressed in the number of issued building permits. When it comes to residential construction, last year, 11% more apartments were sold / purchased in Serbia than in 2016. Over 33,600 apartments were sold, of which nearly a third was purchased directly from developers. The highest number of real estate transactions was recorded in Vojvodina (37%) and Belgrade (26%).

The new building construction drastically picked up pace especially in Belgrade with the whole neighbourhoods like Kapija Vračara, Panorama Voždovac, Sunnyville, Zemunske Kapije and other projects, being built by domestic developers. But there's no lack in foreign investors' interest when it comes to residential real estate. The construction of the K-District complex in Dorćol should start by the end of the year, which is a 200-million-euro investment by the Dutch company Pinnacle. Construction of condominiums has become quite popular since they offer future residents

of the region's markets. Just 7-8 years ago, there were only two to three shopping centres in Belgrade, with two opening last year alone - one in Karaburma and one in the city centre, an investment by the Israeli Ashtrom Group, worth 80 million euros. Two more are under construction - BW Gallery and Ada Mall, in which the GTC invested 105 million euros. The opening of Ada Mall is planned for the spring of 2019.

In the last seven years, twenty retail parks have been opened in Serbia, and

common utilities such as swimming pools, parks, and fitness centres, with everything happening under the watchful eye of security video surveillance.

This type of residential construction is now only available in Belgrade at the moment, and it seems that Israeli investors are dominating this sector too.

Shikun & Binui Group announced the construction of the Wellport complex in Novi Beograd, a 130-million-euro investment. The Israeli group has already completed the project Central Garden,

G R OW T H

MARKET IN SERBIA The real estate market in Serbia is growing which can be seen from the fact that there are over 28,000 currently active construction sites and 14.4% more building permits issued in the first quarter of this year.

while the Voždove Kapije project is under construction.

Mixed purpose facilities are also becoming increasingly popular. Skyline is being built in the Knez Miloš Street in Belgrade, which will consist of three business and residential towers. The developer is AFI Europe which will invest a total of 200 million euro in the project. The construction started last year.

By the end of 2019, the Knez Miloš Residences complex, comprising of seven facilities, will be built. The Israelis are also developers on this project. The Belgrade Waterfront development project recently got its first tenants, while works are under way on the other two towers of this largest construction site in this part of Europe. The other two towers will be ready for moving in next year. This project is being implemented since 2015, it spans a million square meters, has 6,000 apartments, and is worth 3.5 billion euros.

Last year, price of a square metre in a newly constructed building increased by 4.4% in relation to the 2016 average, taking into account the dinar/euro exchange rate. According to the data collated the Statistical Office of the Republic of Serbia, Belgrade has the highest average price of a square metre of 1,830 Euros, which is an increase of 6.7%. This year, according to the data from individual real estate agencies, the average price of a square metre in the capital has jumped to 2,200 euros. This was influenced by favourable housing loans, but also a much higher demand in relation to supply, especially in Belgrade and Novi Sad. Some consider these prices unrealistic, saying that similar thing happened in other European countries and that this trend has failed to continue. The question remains how long is this trend going to last and what will be the consequences. Still, it is certain that the Serbian real estate market is still in the early stages of development, unsaturated and as such, extremely interesting to foreign developers.

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Focus on R E A L E S TAT E S E R B I A

CBS INTERNATIONAL DOMINATES THE DOMESTIC MARKET An impressive portfolio guarantees the leading position. The results confirmed the market leadership

C O R P O R AT E

he real estate market in Serbia is moving upwards and according to a constant growth of demand this trend will continue in 2018. The number of sold and rented square meters of residential, office and retail units provides a much better perspective of life in our country and a factor that is pretty encouraging is the increased activity in con-

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struction in the upcoming period.

Compared to the previous years, when the interest in office space was mostly concentrated in New Belgrade, new data suggests that the center of Belgrade is becoming more and more interesting for starting and continuing a successful business. Reports say that last year’s successful trend continuous this year, so only in the first

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INFO

EXCLUSIVE CBS International is the exclusive sales representative of over 30 of the largest projects in Serbia in all segments.

half of 2018 the unbelievable 71,000 sq m of modern office space was leased, mainly to large international companies, and most dominantly to IT sector.

That’s why the leading real estate consultancy in Serbia, which in addition to Belgrade office, operates in Montenegro and Macedonia, has more than a great reason to be satisfied, because in the total number of transactions realized by the agencies in this impressive figure of the lease acquisitions, CBS International participated with more than 60 percent. According to the report of The Serbian Business Register Agency CBS International is the largest commercial real estate services company in terms of the revenue for eight years, with impressive portfolio of integrated services including: office agency, retail agency, residential sales and lease agency, industrial & land agency, valuation & development advisory, capital markets, market research, project management, property and facility management, marketing. CBS International, which has been operating on the Serbian market for eleven years, is an undisputed leader and today em-

ploys a team of 75 employees and 44 licensed real estate agents, as well as licensed valuers recognized by RICS and Ministry of Finance, with a portfolio of more than 1,500 clients.

CBS International is the exclusive sales representative of over 30 of the largest projects in Serbia in all segments, including some of the biggest projects in the capital like Central Garden, Skyline, Business Garden, the Duke’s Gates, Wellport, My Aviv and many others.

The main goal of CBS International for the future is regional expansion, along with its strategic partner Cushman and Wakefield Group, a leading global real estate services company.

At the end of the last year the real estate consultancy CBS International, following the selection of a reputable international financial publication Euromoney, was again named named No. 1 real estate advisor in all 4 categories: Top Real Estate Advisor Overall, Top Valuation Consultant, Top Agency/Letting, Top Research Consultant.

For more information, please visit our website: www.cw-cbs.rs or www. cushmanwakefield.com.

Focus on R E A L E S TAT E S E R B I A

THE SITUATION IS RAPIDLY IMPROVING Square metre of property in Belgrade increasingly more expensive, luxury real estate always finds it buyer C O R P O R AT E

fter a number of difficult years for the real estate sector due to falling prices and reduced volume of new construction after the crisis in 2008, the situation is rapidly improving.

Thanks to numerous new infrastructure projects, hotels and residential blocks, Belgrade's appeal is growing. And with a greater interest, market also reacted by raising the prices of property. The same property that, two years ago, you could have bought for 1,500 euro per square metre, now costs at least 2,000 euro.

More precisely, and according to the latest available data, the prices of apartments in Belgrade range from 600-800 eurosper square metre in suburban municipalities, to more than 2,500 euro per square metre in city centre. An apartment that can house a three-member or four-member family, costs an average of 80,000 euro provided it is located in one of the Belgrade municipalities.

At the same time, there is an increasing price differentiation between apartments located in „older“ buildings and

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those in newer buildings.

On one hand, new properties are getting more expensive, and at a similar location, the difference in the price of a square metre of the old and new apartment can can be over 50%. Also, there is a much greater interest in newer properties. In certain buildings and complexes which are just starting to be built, apartments are already sold out and there are even waiting lists.

This trend of growing prices began a year ago, with a sudden jump occuring six months ago.

The most expensive apartments are in located in modern condominiums that, besides modern and luxurious space, also offer tenants a joint activity space like parks, swimming pools, garden, gym... If you want to live in this kind of residential „paradise“, you will have to pay 4,000 euro per square metre.

Furthermore, the prices of old apartments rose in 2017, so for instance, in Novi Beograd, it is a real miracle if you find a small apartment, and the usually retail at the price of 1,700 euro per square metre.

All of you who want to find the perfect roof over their heads can look at the diverse offer on the real estate advertising website Moj Kvadrat

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The real estate prices were pushed up mostly by a huge demand which was a result of lower interest rates on mortgages. Last year alone, banks were racing each other which one was going to offer a better deal and lower interest rates.

But before you take a mortgage, please make sure that you know everything about the procedure of obtaining one because the procedure can oftentimes be long and requires a lot of patience which will pay off in the end since you will become the owner of your home.

Location is one of the things to consider when buying an apartment. Is it better to buy an apartment away from the centre, which is cheaper, so you get more square metres, or should you "sacrifice" the size for a good location?

The most sought after locations are traditionally the centre of Novi Beograd, but also the elite parts of the city and new residential-business complexes.

Novi Beograd is a popular choice for people who want to buy a brand new apartment and the demand for these apartments is great despite the fact that their price can reach 3,000 euro per square metre.

Otherwise, estimates show that 3,000 to 5,000 apartments are built annually in Belgrade, while 11,000 to 14,000 apartments are sold. This means that significantly more apartments are sold than built in Belgrade each year. It is also interesting to note that properties are more purchased in cash than through mortgages.

Despite the high demand and waiting list for apartments, the offer is still ample, and all of you who want to find the perfect roof over their heads can look at the diverse offer and find their housing oasis on the real estate advertising website Moj Kvadrat.

Focus on R E A L E S TAT E S E R B I A

CAN’T SEE THE FOREST FOR THE CRANES! This is a new golden age for the Serbian construction industry, and it is up to us to choose the view COM M E N T

oes 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 a 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 obli-

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gated 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.

ERVIN PAŠANOVIĆ General Manager, Adventis Real Estate Management

G R OW T H

PERIOD OF STABILITY 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.

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, the prices 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.

Focus on R E A L E S TAT E S E R B I A

INVESTMENTS IN BOTH SERBIA AND THE REGION Delta Real Estate is already positioned as a regional company in the real estate business

n addition to the planned investments in Serbia, and announced investments of 400 million euro, Delta Real Estate continues to expand in the region. Apart from opening a hotel in Ljubljana, the company is also planning to open two shopping malls there. In Bulgaria, we are planning to build a complex in the one of the most popular tourist centres Varna, and in Banja Luka, the company is building a largest shopping mall in the Republic of Srpska and Bosnia and Herzegovina that will be opened in the first quarter of 2019.

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For some time, Delta has been announcing regional expansion in the real estate business. How is the construction of the planned shopping malls going?

— Delta Real Estate is already positioned as a regional company in the real estate business. Apart from opening the InterContinental Hotel in Ljubljana, the company is also planning to open two shopping malls there.

We are currently building in Varna, the second largest city in Bulgaria and the most important tourist center of this country, which yearly sees more than one million tourists. The Delta Planet Varna project is nearing com-

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pletion. At this moment, 90% of works are completed. This shopping mall has over 160 different purpose shops and a cinema with 12 theatres and state-ofthe-art technology - the first 4DX – is in in Varna, which is the second largest city in Bulgaria and the most important tourist center of this country, which has one million tourists vacationing here every year.

The shopping mall in Banja Luka, the largest in the Republic of Srpska and Bosnia and Herzegovina, will be opened in the first quarter of next year.

The construction of the mall's building is almost completely finished. The works on the installation of roof coverings and facade are in full swing, and the first tenants will begin to decorate the interior of their premises in the mall in early autumn. In addition to a number of new shops, the Mall will also have the largest cinema in this part of the world, with 6 cmovie theatres, as well as a a supermarket, restaurants and around 1,000 parking spaces.

How far along are you with the implementation of Delta's projects in Serbia?

— In addition to the investments in the region, Delta is also planning to implement very significant projects in Serbia. We are ready to invest 400 million

C O R P O R AT E

ZORANA ŽDRALE BURLIĆ CEO of Delta Real Estate

The plan is to build a new business building for Delta Holding, which will have nine office levels, a fitness centre, a restaurant, an underground garage with almost 200 parking spaces, etc.

euro and open three construction sites in Belgrade.

In Block 19, we are planning to build a Delta Centre, that will house the InterContinental Hotel Belgrade. There will also be a business building with modern office space and an exclusive shopping and restaurant area. The complex will comprise of an underground parking garage with almost 600 parking spaces.

The entire business complex will have a modern appearance and will represent a unique green business oasis. We are still in a design phase, and the value of this investment is 130 million euro.

The super regional shopping mall, Delta Planet at Autokomanda will cost 200 million euro to complete. The plan is to build a new business building for Delta Holding, which will have nine office levels, a fitness centre, a restaurant, an underground garage with almost 200 parking spaces, etc.

When are you going to start constructing these facilities?

— The financing and technical documentation for these projects are both in place and the construction of these facilities could begin 15 days after obtaining all the required permits.

Focus on R E A L E S TAT E S E R B I A

ONLY ONE IN FOUR PROPERTIES IS OWNED

BY A WOMAN The new Law on the Cadastre Registration Procedure allowes the spouses who, at the time of marriage, acquired an apartment or a house to automatically be registered as co-owners of the property

COM M E N T

nly one in four properties in Serbia are 100 percent owned by women, while another 11 percent are in mixed ownership, according to the State Geodetic Authority (SGA). This is, in addition to the fact that women are less paid for the same jobs or have fewer opportunities for career advancement in relation to men, another illustrative example of the unequal position that women have in our society.

The new Law on the Cadastre Registration Procedure came into force on 1st July and thanks to the cooperation between NALED, the Cabinet of the Deputy Prime Minister of Serbia, SGA and the Economic Caucus of the National Assembly, an amendment to the law has been drafted with a view of allowing the spouses who, during their marriage, acquire an apartment, a house or other facility, to be automatically registered in the cadastre as the holders of common property rights.

On the other hand, if we are talking about special property acquired during marriage, it is possible for the spouses to voluntarily agree that only one partner should be registered in the cadastre as the owner and that the nota-

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ry public will notify the State Geodetic Authority thereof.

“The property acquired during marriage has so far been treated as common property, but in practice, it was often the case that only a man was registered as the owner, so that in the case of divorce, the spouses had to go through a long litigation to prove their ownership share. All this meant wasted time and resources of all participants in the procedure, court included“, says Jelena Bojović, Director of Regulatory Reform in NALED. The amendment on the automatic registration of the joint property of spouses is one of the total of 19 amendments to the Law on Cadastre Registration Procedure forwarded to the National Assembly by the deputies of the Economic Caucus, following the initiative and the support of NALED. All 19 amendments were accepted by the National Assembly, which meant improvements were made in the text of the law.

Now, the law allows the registration of property in the cadastre to be completed by going to just one place - the notary public - instead of six different counters, which, in turn, increases the cadastre’s accuracy and legal certainty.

JELENA BOJOVIĆ Director of Regulatory Reform in NALED

L I T I G AT I O N

COMMON PROPERTY The property acquired during marriage has so far been treated as common property, but in practice, it was often the case that only a man was registered as the owner, so that in the case of divorce, the spouses had to go through a long litigation to prove their ownership share.

Economic empowerment of women has been long in NALED’s focus and is one of the key initiatives launched in collaboration with the Government of Serbia’s Gender Equality Coordination Body and the Etno Mreža association, with over 1,000 young women and young people in general, living in rural areas, hired to make traditional arts and crafts which were then given as presents to diplomats. According to Employment Counter, on the 1000zena.rs website, so far, women spent 9,583 working days on this project which is sufficient to have a month-long work engagement for 436 women who can generate extra income for their families in this way.

Women in rural areas make up more than a half of the population, but three out of four are not paid for the work they do. The inequality data is not much better on the country level too. Only 43.7% of women are employed versus 56% of men. 71% of men are in managerial positions. Of the 250 deputies in the parliament, 87 are women. In 166 local self-governments, only 11 are town mayors or head of municipality.

Among the 22 members of the Government of Serbia, only five are women.

Source: NALED

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LIDL LOGISTICS CENTER IN NOVA PAZOVA Lidl Srbija Logistics Center is one of the largest facilities in South East Europe with the LEED Gold Certificate, earned for respecting the highest standards in sustainable construction C O R P O R AT E

idl Srbija Logistics center in Nova Pazova had opened on 12 June 2018, when the first test product were delivered. The Center, covering more than 45,000 square meters, with storage capacity of 30,000 pallets and 120 loading and unloading ramps, is to function as a central hub for distributing goods to all Lidl stores, whose opening is expected by the end of the year.

By contracting around 50 national subcontractors during a year-long construction of its Logistics Center, Lidl Srbija, as noteworthy investor and employer, had actively engaged the Serbian construction industry.

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RESPONSIBILITY Lidl Srbija Logistics Center is one of the largest facilities in South East Europe with the LEED Gold Certificate, earned for respecting the highest standards in sustainable construction – use of sustainable building materials, more efficient use of water, waste reduction, improved energy performance of buildings and better-quality working conditions such as enhanced indoor air quality and daylight. Energy savings at the Logistics Center have reached 32 percent; water consumption, owing to special faucets and showers installed, has been reduced by 20 percent, with the active utilization of the rainwater drainage system. Lidl takes the utmost care in regard to proper waste disposal. Packaging waste is collected at the Logistics Center and in stores and separated in the special recycling zone.

EFFICIENCY The efficiency at the Logistics Center is warranted with a combination of modern technologies and optimized processes that have been tried and tested in 30 other Lidl operating markets. Goods and products are efficiently picked up from the distribution center using the “pick-by-voice” auto-

mated system, a system with almost 99 percent management precision that allows a hands-free, paper-less, and hence more operational work of an employee who receives instructions via headphones. Besides that, modern commissioning vehicles at the Logistics Center make daily work easier.

QUALITY Lidl Srbija guarantees the quality of its products by paying close attention to their design, development, manufacture,

storage, placement on the store shelves and sale to consumers. The paramount criterion in selecting suppliers is quality.

To provide consumers only with the best quality products on Lidl stores’ shelves, employees at the Logistics Center inspect the quality and the freshness of the received products daily against strict international standards. The goods are entered into the system only after thorough inspection and stored in chambers with special temperatures adequate and optimal for preserving their freshness.

Because each delivery in store is from the Logistics Center and not from individual suppliers, each and every product placed on Lidl stores’ shelves fully meets international standards.

Lidl takes the utmost care in regard to proper waste disposal

FRESHNESS Orders from Lidl stores will be accepted daily so the fresh products can reach their consumers in the shortest time possible. The Logistics Center operates five temperature zones and has a unique chamber for storing chocolate products only (+18 ºC). The temperature is permanently monitored during product transport, using cold storage trucks with several temperature regimens, allowing the goods to reach Lidl stores under the same temperature as in storage chambers at the Logistics Center. Special boxes allow transport of cooled and frozen products in appropriate temperatures; even with trucks without own cooling systems. Those boxes can preserve products’ temperature up to 24 hours.

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Focus on R E A L E S TAT E S E R B I A

LEADER IN MANAGING REAL ESTATE IN SOUTH EAST EUROPE

Confluence Property Management (CPM) is a leader in managing real estate in South East Europe with the portfolio of 57 assets with the total surface area of more than 420,000 m2 PM provides advanced real estate solutions through the combination of a senior management team, with decades of experience working in international real estate, and a talented native staff with comprehensive knowledge of the local market. Focused on enhancing asset value our property managers are empowered to minimize operating costs, improve efficiency and enhance customer service in order to protect the value of each investment. Confluence currently manages a portfolio of assets comprised of retail, office, residential and mixed-use in the Balkans, including the largest shopping centers, biggest retail chains and one of the largest office. CPM is managing more than 70% of retail objects across Serbia, among which are UŠĆE Shopping Center, the biggest shopping center in the Balkans, located in the heart of the Serbia capital city with over million visitors per month, Immo Outlet Center, first and the most popular outlet center in the capital of Serbia, Shoppi Retail Parks, the chain of retail facilities across Serbia (Subotica, Borča and Smederevo) and many others. Apart from Serbia, CPM also manages shopping centers across Bosnia and Herzegovina such as Alta Shopping Center, the first modern retail complex in the Bosnian capital Sarajevo, located in the city central business district and BIN-

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GO City Center in Tuzla. Our portfolio also includes office assets such as UŠCE Tower, the highest building in Serbia and one of the tallest business buildings in the Balkans, Navigator Business Center, a modern, Class A business complex, built according to the LEED standards.

Confluence brings a strategic, proactive leasing approach to real estate assets fulfilling both short-term needs and long-term goals, so tenants can focus on continuous financial growth. All international and regional players among them HM, Inditex (Zara, Pull&Bear, Bershka, Massimo Dutti, Stradivarius, Oysho, Zara Home), C&A, New Yorker, Deichmann, DM, LC Waikiki, Koton, C&A, are present in Confluence assets.

Currently company is focused on two new strategic projects – Ušće Tower Two and Navigator Business Center II whose openings are planned for Q1 2020.

Ušće Tower Two is a modern, luxury office building, offering A+ class business space on 22 floors, with 23,200 sq m of GLA. Along with the new tower, MPC Properties is developing a two-level underground garage with 750 parking lots aiming to cover parking needs of both towers.

Built next to the existing Ušće Tower One, Tower Two will redefine the concept of premium business space in Belgrade and set completely new standards. Located in the most prestigious part of the

C O R P O R AT E

FA C T

PORTFOLIO Confluence currently manages a portfolio of assets comprised of retail, office, residential and mixed-use in the Balkans

city, in the heart of the New Belgrade’s business district right at the confluence of Sava and Danube rivers, it offers easy access for all kinds of the traffic.

The building is designed in accordance with green building standards and will apply for a BREEAM excellent certification. Ušće Tower Two will be “the breathing building” with decentralized natural ventilation integrated in the façade and streaming fresh air at the touch of the button. Aside from the highest quality work space with flexible rental areas on each floor, Tower Two offers additional facilities and amazing surroundings, perfectly complementing the existing buildings, Ušće Tower One and the UŠĆE Shopping Center.

Navigator Business Center II is located in New Belgrade’s prime business zone, easily accessible from the city center, the airport and other parts of the city by all types of traffic.

It will add 27,000 sq m of GLA on 8 floors along with 500 parking lots on three underground garage levels. With its floor spaces exceeding 3,000 sq m it will be unique on the Belgrade’s office market. With the opening of Navigator II, the total “Navigator” complex will accommodate 45,000 sq m of modern office space.

The building is meets the highest standards of modern business and will be constructed in accordance with LEED Gold standards.

Focus on R E A L E S TAT E S E R B I A

FOR A CAREFREE VACATION THERE IS AMS OSIGURANJE

C O R P O R AT E

Travel completely relieved and feeling safe, while leaving the care for your and your family's health to the professional team of AMS Osiguranje ou would like to spend the upcoming days abroad, but are you stressed that something can happen to you or your loved ones?

Choosing a quality Travel Health Insurance will protect you from unwanted financial losses and provide you and your loved ones with a carefree holiday you deserve. Travel completely relieved and feeling safe, while leaving the care for your and your family's health to the professional team of AMS Osiguranje.

A sudden illness or an accident can become an integral part of your vaca-

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tion, with the costs of medical treatment abroad high and often exceedubg your budget. That's why it's smart to insure yourself on time.

We are mindful of you and your budget and therefore we offer you the best prices and services in our market.

You can buy a Travel Health Insurance policy online at AMS Osiguranje's webshop, and thus save your precious time and money. Should you decide to buy this insurance online we are offering a 30% discount on the premium during the promotional period. So, for only 735 dinars, which is how much

Do not allow unforeseen events to surprise you, and let AMS Osiguranje care for you, because our clients always come first

the premium for an individual travel health insurance policy costs for seven days of stay in Europe with the included discount, you will be protected from exuberant medical costs such as surgical interventions, hospitalization and other health services, in line with the terms and conditions of your insurance policy. This is a real benefit for those who are traveling on holiday with their families, because if you take a family insurance, the premium costs 1,617 dinars for the same, aforementioned period.

While on the road, do not forget to insure your apartment or house. We offer you the opportunity to protect your home from a variety of risks at affordable prices, and if you choose to insure the things in your home too, you will be entitled to an additional 10% discount on the entire insurance premium, which further alleviates your budget.

Do not allow unforeseen events to surprise you, and let AMS Osiguranje care for you, because our clients always come first. You can visit us at our offices at 16, Ruzveltova Street in Belgrade, or in one of our 250 sales outlets across Serbia. Our professional and kind staff is at your disposal for any advice regarding purchasing the best combination of insurance coverage that will suit your needs and financial situation.

For more information, please call us at 0800-009-009, or visit our website at www.ams.co.rs.

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Focus on

Ž I K ICA MI L O Š E VI Ć

R E A L E S TAT E S E R B I A

REAL ESTATE BOOM UNDERWAY Insufficient transport makes housing expensive COM M E N T

ack in the day, at the time of the Socialist Federal Republic of Yugoslavia (SFRJ), many found the information that a rather small town of Ljubljana had more holiday cottages (gross number, not per capita) than Munich quite surprising. The explanation for this was very simple – while people in Germany invested in stock trading, the surplus money in Yugoslavia was spent on building properties.

It is enough to see just how many holiday cottages are there on the Fruška Gora Mountain to conclude that the holiday cottage boom was not only happening in Ljubljana. Times have changed, capitalism and stock exchanges have now existed for 28 years, but the love that South Slavs have towards real estate did not disappear, just like in most of South Europe. The construction boom has also affected Spain, where it was both the driving force behind the economic growth and a trigger for the crisis. The problem with real estate is that even when it is rented, it generates lower yield on a monthly basis than interests or dividends. Still, real estate remains a very popular type of investment in our region, hence the construction boom here.

There is a story that the best buildings in the USSR were those built during the tsarist times and Stalin, followed by the buildings from the Khrushchev and Brezhnev times. As the years progressed, the quality of construction has been declininig in a linear fashion. However, things are different here, and we can see that the newest construction trends in most countries are all about better building materials, better insulation, and green construction in line with the environmental standards which all push up the value of property.

The construction boom was first started in major cities, such as Belgrade and especially Novi Sad, which

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The newest construction trends are all about better building materials, better insulation, and green construction in line with the environmental standards which all push up the value of property

after the disastrous spatial planning solutions from the 1960s to the 1980s, was left with a bunch of "holes" in the urban city core that could and should have been filled. In the area surrounding the town centre, there was a series of neighbourhoods with small, low and relatively poorly built houses that could have been demolished and replaced by high rise, which eventually did happen.

Due to the flat terrain, there was enough room for expansion in all directions.

This also caused a wide array of real estate prices which range from 800 to 1,500 euro per square metre. The older residential buildings (those in the quarters like Detelinara, around the Railway Station and Novo Naselje) are usually in a lower price range, while the real estate in the Liman neighbourhoods and town centre, as well as newly built real estate, are in an upper price range. It often happens that business buildings are joined with residential ones in a single building, mixing business premises with flats. The most popular location choice for business buildings are intersections of two or more streets, since, in certain cases, they are allowed to have 50% more floors than in other streets, because such buildings are considered „landmarks“.

We did not have to wait long for the construction boom to spillover into other cities, i.e. those cities where industry and economy have been revital-

ized and where there are quite a lot of investments in real estate. This boom is perhaps the most noticeable in the town of Sremska Mitrovica since it is the capital of the entire region. The economy in Mitrovica was devastated for 15 years and now it is completely revitalized. The square metre of residential housing at the elite locations costs about 700 euro. Subotica has experienced a similar progress in housing construction, profiting from the EU's proximity (the entire Vojvodina is close to the EU), and the prices here are similar to those in Mitrovica. One of the tragedies that is become increasingly noticeable is that surburban houses here can be bought for 200 euro per square metre or even less. This crude centralization is the consequence of the underdeveloped transport infrastructure, with everyone flocking to the cities. Why shouldn't a person, if they could, have a house in Smederevo and take only 30 minutes on a fast train to get to Belgrade to work?! The development of road infrastructure will stop the centralization of large cities and the devastation of villages, as well as bring about lower prices of real estate in cities. It is possible to have a developed real estate sector with excellent infrastructure. Spain has proven this, emerging from the crisis as the beacon of light for development of Southern European countries.