REAL ESTATE - NEW RULES, specijalno izdanje Real Estate magazina

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ROUND TABLE OCTOBER | YEAR 2018

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INTRO

EXPANSION AND CHANGE In what way world trends and change in customer profile are transforming real estate sector?

Text: IVANA LAKIĆ

he real estate market in Serbia is in expansion - the price of the square meters, the number of active construction sites, are growing. Around 48,000 real estate in Serbia has new owners, which is the number of sales contracts concluded in the first half of this year, which is 15% more than the sales volume in the first half of 2017. Their total monetary value is 1.6 billion euros, which is 23% more than the same period last year.

Last year it was a record for the commercial real estate sector in Denmark. The total volume of transactions amounted to 12.7 billion euros, which is 49% more than in 2016. In Copenhagen alone, the volume of transactions increased by 30% compared to the previous record from 2006 and 2016, and the highest transaction was recorded within the residential sector.

The main question that arises is how long this trend can last. As for Copenhagen, experts say probably for a few more years. Namely, the capital of Denmark currently has about 1.8 million inhabitants and by the year 2045, it is expected to increase by 18%, or more precisely 317,000 new citizens.

The development of new urban areas in Copenhagen will contribute to the new light city railroad that will be put into operation in 2024. Belgrade expects to build the first metro line in 2020 and similar effects are expect-

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Buyer Does the average buyer of real estate in Serbia, apart from price and location, look at how his living space will behave during exploitation?

ed in the Serbian capital. Still, there are opinions that the expansion of the Serbian real estate market will last for only a few years, while others claim that there will always be demand, to what extent - remains to be seen.

Where are the main differences between these two markets?

When it comes to investors, it’s interesting to note that domestic investors in Denmark led the market in 2016, when they accounted for 55% of the market. However, in 2017 there were 46% of them, while foreign investors took over the leading role in investing in the real estate sector (54%).

In the financing and construction of real estate in Serbia, according to the KPMG’s data for the first half of 2017, foreign investors prevail from South Africa, Israel and Austria.

Danish design and architecture focus on human, natural materials, energy efficiency, comfort and clear design lines. This is then transferred

to cities, projects and entrances to homes and refines business premises.

How much has changed the profile of buyers of real estate in Serbia? Market participants say that customers have been educated to measure and recognize quality. However, does the average buyer of real estate in Serbia, apart from price and location, look at how his living space will behave during exploitation? How much will they save through electricity or water bills? Orientation to these effects of exploitation of the building would have a significant impact on investors.

How to provide additional value to the buyer, or to the future user of the property? What can we implement from the experience of Denmark?

How to ensure successful realization of construction projects from the perspective of investors in the new conditions? These are just some of the main questions that will be answered by the participants of the first round table “Real Estate - New Rules”.

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INTERVIEW

DIALOGUE – A DANISH RECIPE FOR SUSTAINABLE DEVELOPMENT For the past four decades, the Danish economy has grown by almost 80%, while energy consumption has remained largely unchanged, and in 2017, new records in the real estate sector were set Text: IVANA LAKIĆ

H.E. ANDERS CHRISTIAN HOUGÅRD Ambassador, The Royal Danish Embassy

n 2017, the volume of transactions in the real estate sector broke all previous records in Denmark by 30%. Anders Christian Hougård, the Ambassador of the Royal Danish Embassy, states that the increase in the number of residents, especially in urban areas, is one of the causes of such trends.

He especially emphasises the number of foreigners and students drawn to the capital of Denmark by job and education opportunities as a significant part of the demand.

Low interest rates on mortgage loans that facilitate the acquisition of funds for the purchase of real estate are significant for this trend. After all,

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Vision The vision of the construction of the Nordhavn district had to conform to the vision of Copenhagen itself – from compulsory environmentally friendly solutions, through sustainable public transport, to the type of housing.

as Mr. Hougård points out, the whole process is digitized, so applying for a constuction permit takes only a few clicks. “During the construction licencing reform in Serbia, an expert delegation travelled to Copenhagen for a knowledge exchange mission, and we are pleased that Denmark has contributed to the progress of Serbia on the Doing Business list, which was a direct consequence of the digitalization of construction permits.”

Speaking about the effects of trends prevalent in Denmark, the Ambassador says that a major challenge is a significant rise in real estate prices. “High prices are a limitation for the local population. On the other hand, the growth of demand for real estate facilitates urban development, as seen in Nordhavn – a new city district in Copenhagen. This area is being transformed from an active industrial zone to a modern residential and business area.

The vision for the construction of such a settlement had to conform to the vision of Copenhagen itself – from mandatory environmentally friendly solutions (renewable energy sources, energy efficiency measures, rainwater collection), through sustainable public

transportation (subway, buses, cycling lanes) to types of housing available to people of different incomes. The idea was not to create a “ghetto”, neither for the rich nor the poor, but to integrate everyone and provide citizens with activities and experiences, regardless of age, gender, race…”

During the last year, foreign investors in the real estate sectors have overtaken Danish investors. What is the Danish recipe for attracting foreign investors in the real estate sector?

— Well, as you stated before, property transactions have increased significantly, leading foreigners to realise the great potential in the Danish real-estate market. And we have an increase in population, so we expect this trend to continue.

However, if a government wants to attract more investors, foreign or domestic, it needs to make targeted decisions on expanding and improving the infrastructure, with special focus on public transport, and of course, cutting the ‘red tape’ and speeding up various procedures. Finally, the state institutions must make sure to conduct inspections and penalize all the wrong-doings.

With more people living in urban areas, this trend is creating many challenges for the planning, development and operations of the cities, which call for smart approaches to ensure that cities are optimized for economic activity, energy consumption, environmental impact and the overall quality of life. State of Green, a smart solution maker in this field, approaches the whole situation starting from Danish tradition. Can you tell us more about State of Green, which is a public-private partnership?

— State of Green is a non-profit, public-private partnership and it is a onepoint entry to more than 600 Danish businesses, governmental and academic institutions, experts, and researchers. The role of State of Green is to connect a client with all leading Danish players working to drive the global transition to a sustainable, low-carbon, resource-efficient society, whether it be within renewable energy, energy efficiency, water management, waste management, climate adaption or integrated urban solutions.

What I like about the State of Green is that it really summarizes a good Danish trait – dialogue! It gathers all the relevant stakeholders and promotes Danish solutions and green agenda, in a constant dialogue with all. In no field can one side be shut out – for a long-term effect, a dialogue is a necessity!

Industries Danish companies operating in Serbia come from different industries, and yet the green sector seems to be the most represented.

services, which will increase efficiency and productivity not just in public but in private sector as well.

To what extent and how often do Danish businessmen turn to the Danish Business Club for advice on reaching the Serbian market?

— Two years ago, the Embassy established the Danish Business Club, and we are happy to see more companies deciding to become members.

Additionally, each Danish embassy has a Trade Council representative, which offers business-related support to Danish companies and other relevant stakeholders.

Bearing in mind that Danish investors in the real estate sector were very active in their homeland; would they be interested in doing business in Serbia?

— Serbia does definitely have some advantages as an investment destination, from a good geographic location to educated labour force. The economic stability of the past few years also helps in attracting new investments.

We of course see the increase in real estate development, primarily in Belgrade but also in other tourist destinations around the country. I believe that, with the building of infrastructure, we could potentially see some interest from also Danish real estate developers.

PRAGMATIC APPROACH TO RESOURCES In Denmark, the governments have placed high fees on resource consumption. This has led people and businesses to become more aware of their consumption, and attempt to seek out ways to save money.

After all, waste is an opportunity cost! Why waste something if you can earn money on it? Why throw away plastic if you can earn by recycling it? Why not incinerate some the waste and create energy? Why not use up the agricultural biomass that is anyway available to create energy and save your own money? It is really that simple. In Denmark, no one feels like throwing the money out of the window.

The most important lesson is a need for people to become more aware of their consumption, and try to find different ways to manage their usage. However, there needs to be political focus on the area, if we want to see big changes.

Approximately 40 Danish companies do business in Serbia. Which industry is the most represented by Danish companies operating in Serbia?

— Danish companies in Serbia come from various industries, most of them are actually SMEs. However, the green sector, with companies such as Grundfoss, Danfoss, Kamstrup, AVK and others, seem to be the most prevalent industry.

According to your findings, how satisfied are they with their business activities in Serbia?

— Danish companies are very happy to be in Serbia, seeing many great opportunities. Some have however, mentioned the large bureaucracy as a hurdle. In this sense, we praise the Government’s efforts in digitizing its

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PLANNING MODEL

NEW RULES AND NEW POSSIBILITIES Energy Efficiency in Construction as an Economic Development Engine

NENAD MITOŠEVIĆ Trade Advisor, The Royal Danish Embassy

e are witnessing a time in which the topic of energy efficiency and renewable energy sources is becoming increasingly important. We are also witnessing climate change that seems to be accelerating and requiring that comfort issues be resolved in different ways than before. At the same time, buyers and users of real estate are becoming increasingly sophisticated and ask better questions regarding long-term housing costs and the future value of their current investment.

Real estate investment in Denmark, especially in cities, was certainly a good move, as prices rose by over 15% in the past three years, and continued growth is expected beyond 2019 because of projects like the expansion of northern Copenhagen, but also because of the growth of cities such as Aarhus and Odense.

In my opinion, the key factor behind the growth in this sector is related to planning. Primarily, I am talking about spatial planning and quality of construction planning. For example, the remote heating system in Denmark is also a remote cooling system and a hot water supply system.

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An Important Role City and local authorities play a very important role in shaping and synchronizing strategies with investors, creating a clear picture of where they want cities to be in five, ten or twenty years.

When a new building is constructed, it is completely irrelevant whether the building has one or three pipes - if so planned. It should be noted that we are talking about central cooling in a country where the need for cooling is much lower than, for example, in Serbia, where such solutions are not applied. Also, such an object is ready for future user needs and will not require additional investments in air conditioning, neither by the owner nor by the user. Central hot water supply is available in some buildings, but is not a part of a standard construction solution. The comfort of having a central hot water supply needs no special mention.

Naturally, city and local authorities play a very important role in all this, forming and synchronizing strategies with investors, creating a clear picture of where they want cities to be in five, ten or twenty years.

In this endeavor, investors are key partners of cities and municipalities in implementing these goals. Goals that require, for example, buildings whose construction is due to be finished in 2020 to be another 20-30% more energy efficient than now cer-

tainly affect the increase in investment costs. The ultimate goal is also known and set for 2050. The goal is for Denmark to completely cease to use fossil fuels for its energy needs. It sounds far-off and unrealistic, but the process is made up of many smaller steps that should lead to that goal.

It is a goal pursued since the 1970s.

Take Copenhagen, a city with the ambition of being the first CO2 neutral capital in the world. Such a decision, apart from clearly communicating the direction in which the city will develop and where the development priorities are, attracts people who want to live in a healthier environment and who can and will pay for it. In this way, with such a message, Copenhagen is reaching many more potential new buyers and tenants around the world.

Users of real estate in Denmark are people from all over the world who are connected by the same desire and goal to live in a healthier and cleaner city. Copenhagen plans to achieve this before 2030!

How did the investors in Denmark accept and support the idea that it was necessary to embrace sustainable development, employ increased

energy efficiency measures and renewable energy sources? The answer: the market, higher prices and the improvement of their own capacities and capabilities.

By market I mean the evolution of consumer awareness and customers who want lower monthly bills while retaining comfort. Energy prices, though oscillating, generally grow each year, and each decade. In the long term, this trend will be reflected in Serbia. True, in Serbia, consumers are not currently interested in the manner in which the energy they use is obtained, nor where, bur in due time, you can be sure that this will change. With the improvement of living standards, perceptions and priorities change, but the desire for a lower electricity or heating bill certainly will not. Is there a way to fulfill this request? Only by increased energy efficiency and smarter construction. By smarter construction we also mean the implementation of information technologies, BMS systems, as well as systems that we now call “smart homes”. Digitization is a trend that construction isn’t immune to, and this trend will not bypass Serbia. It is possible to resist trends and market demands, but in this case, resistance is futile.

The higher prices argument is also there. Danish experience shows that buildings that meet future energy efficiency standards, which is proved with certain voluntary certificates, achieve about 10% higher prices in

sales or rentals. This means that investments are certainly lucrative, either through higher rental rates, or through higher selling prices. If we look at the current data on the age of buildings in Serbia, we can see that 50% were built more than 50 years ago. You can expect that the facilities being built today will be used in 2068 and beyond. Do we mean to say that those facilities will be of use to us in 50 years’ time?

After all, the fact is that investors who first embark on the realization of projects under these new rules will gain an advantage in know-how, experience, and will build a reputation and their brands. The advantage in know-how can also relate to the possibility of project realization outside of

Increased Value Danish experience shows that buildings that meet future energy efficiency standards, proven by certain voluntary certificates, achieve about 10% higher prices in sales or rentals .

Serbia. The issue of energy efficiency and sustainable development is not only an issue in EU countries but it is a long-term issue for many other markets. Answers to the questions you might have today that can be given

by Denmark, you can offer tomorrow to other markets. After all, by knowing your stuff, you will be able to negotiate better deals for your projects in negotiations with contractors and suppliers. I don’t think that it is necessary to state the importance of reputation and brand value, for it is one of the first things the customers take notice of and ask about. Imagine the reach and value of your brand if you are recognized by customers outside of your region. After all, ask yourself do you want your company to be a leader or a follower. Now, as well as in 10 or 20 years.

Although I wrote the most about the necessity of synergy between investors, local and city authorities, it is important to mention that, in order to succeed, it is necessary to include all the parties vital to the realization of projects. From architects, designers, constructors to workers, all of whom actually have to execute the plan. It would be great if they all had the same goal. In Denmark, people agreed on the goal 50 years ago. For Danish companies, all this isn’t new, it is something that has been going on for many years, and we are happy to share our knowledge. The idea is not just to get to the 2050 goal, but also to motivate others to join us.

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URBAN PLANNING

IMPACT OF THE FUTURE PROJECTS Quality information and data that are important not only for the project itself, but for the entire city

PETAR STOJANOVIĆ d.i.a Director, City Planners

he definition of the concept of city development is not directly linked to the plan of territorial expansion. Both themes are the starting points for urban planning, as an instrument of implementation and conception of development, as well as articulation and expansion of the capital city. Given a decennial lack of infrastructure that can support constant growth, the focus of planning has long been oriented towards a collection of planning documents that will address the consequences of unplanned expansion and define, in time frames, the increase in the area and the population of the city. It cannot be said that the concept of further development and transformation of the existing tissue did not exist, but it was lagging at the levels of already developed, but unrealized urban plans that, after several decades, were already behind the dynamics and pulse of life, business. The result of such backlog is unengaged land, whose purpose was determined forty-fifty years ago, which in many ways made it difficult for the transformation and new projects within the existing tissue, which should have been a financial driver for investing in the missing, but also new infrastructure.

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Various analyzes City Planners conducts various analyzes of the impact of major projects on the wider and narrower environment.

That represent a very wide range of analyzes and studies for each project individually.

Defining or at least profiling the conception of the development of the city, which is noticeable in recent years, is based predominantly on ideas that have been present in professional circles for decades, on the idea of opening the city towards rivers and transforming urban tissue in accordance with changes in trends and dynamics of life, conditions and needs of housing and business. This approach has created a space for urban planning preparation, and consequently, the implementation of institutionalized, large projects.

The platform for further individual development of urban plans was the “General Regulatory Plan” that unified and harmonized city planning and enabled, but also defined the conditions for the construction of high-rise buildings that are checked and implemented through the development of planning documents, urban planning projects and detailed regulation plans for individual locations. The development of planning documents for high-rise buildings, as well as other major projects, which are an “economic flyer” od city development, are initiated and financed by large investors.

During the development of such plans, City Planners conducts various analyzes of the impact of such projects on the wider and narrower environment. That represent a very wide range of analyzes and studies for each project individually, the sphere

of traffic, environmental protection, cultural heritage, etc. Through this approach we get information on the impact of the future project on all aspects of life and functioning of the city. Quality information and data that are important not only for the project itself, but for the entire city.

By linking such data obtained from individual projects, city authorities acquire a wider picture of real-life conditions “from the field” and can continue to direct and control their directions of development through

Scope of work City Planners have been involved in designing, urban planning and consulting in the field of urban planning, construction and administrative procedures since 2000.

their control instruments.

As an example, I will use the engagement of City Planners in the development of a detailed regulation plan for the Skyline Belgrade project, which is currently being built at the site of the former Federal Ministry of Internal Affairs in Kneza Miloša Street, near the park “Three keys” on Mostar Loop.

Kneza Miloša Street has great traffic significance, but also because of its position in the traffic network and the existence of facilities of im-

portance, it is of great importance to the city. The street begins with the Assembly, the Appellate Court, and then the facilities of the Government, ministries and several embassies. Such a dynamic and symbolic series was then stopped and completed with a demolished object and unmanaged land. In addition to the realization of a major project, the idea was to create a “destination” at the end of that avenue by introducing a visually representative object as well as content that is of significance but also of in-

terest to a wider population. That is why within the project a public area was formed, a piazzetta, a square in which the public, pedestrian surface is being introduced fluently - the existing broad pavement, and then proceeded to the logical end of that street, which is the park of the Three Keys. This approach to the project and the treatment of public pedestrians and traffic surfaces has also provided a great contribution to the city and analyzes and studies designed for these needs perceive the impact of this project on a wider context of urban tissue. Concludingly, the analysis of the traffic impact in the city was analyzed at the micro and macro level, so we, the investor, but also the city and the profession, recognized the real dynamics of the city. Traffic analysis has shown what changes the project itself must endure, not only integrating smoothly into the existing urban matrix, but also contributing to its improvement and development.

In addition to the economic importance, which is indisputable, such big projects are of general interest to Belgrade, because in the phase of urban planning and preparation we are using funds from the private sector to contribute to the check and implementation of elements of conceptual development of the city.

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INVESTOR INCENTIVE

MOTIVATING GREEN CONSTRUCTION Increasing the number of Green Building Initiatives will stimulate the market demand for them

DRAGANA KORICA M. Arch, CEO, Green Building Council of Serbia

henever green construction is mentioned, almost always a question arises: „What do I get out of it?“ In all honesty, this universal, general question is valid for almost everything, not just for green construction. Let’s put aside the social responsibility, the savings generated over years of maintenance and management, the reduction of CO2 emissions, and the comfort it will provide us all with. Aside from the benefits that the green construction is proven to provide, it is crucial that, at the very beginning, there must be some kind of motivation that would initiate this type of building to be chosen.

Whether a new building is being constructed or an old one is being renovated, when one is facing that step, that step should be green. As beneficial as that is to the individual, it is also of the greatest interest to the state, due to the fact that our country is committed to the opening

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Initiatives Green building councils around the world are actively working with their government on structural initiatives to help shape the market, as well as to improve green building schemes and initiatives.

of Chapter 27, the treaty with the Energy Community, as well as the acceptance of the Paris Agreement, in addition to our responsibilities to our own community.

By increasing the number of Green Building initiatives, the market demand for them would be stimulated and would reach a critical mass that would enable them to be self-sustainable, which is the ultimate goal in everyone’s interest.

The latest EBRD loan program of the Green Economy Financing Facility (GEFF) for the purpose of financing of green economy, as a green construction form, is the current financial form of support an initial motivation for energy efficiency. This initiative supports households, housing communities (85% of residential buildings, which account for the 75% of the construction sector, are energy inefficient), and representatives of energy efficient technologies, as well as investing in energy efficiency measures and projects with renewable energy sources.

Energy efficiency is an aspect of green construction which has the highest level of achievement in the world, precisely because the majority of initiatives, mostly financial, are introduced for it.

However, the fact that those initiatives that would encourage investors to invest in green construction do not always have to be of a financial nature must also be emphasized. There

are also structural initiatives coming from the decision-makers.

Green building councils around the world are actively working with their governments on such initiatives to help better shape the market, as well as to improve green building schemes and initiatives.

Some of the examples include: � Reducing taxes for energy renovations for all types of households; � I nitiatives that reduce taxes on sustainable investments, creating opportunities for green investment and ultimately generating higher revenues and taxes for the government itself; � 50% reduction of labour taxation within the construction sector applying the green standards; � Priority to those that build green; accelerated procedures and shortening of the processes for those devoted to “the green”, considerably economizes and reduces the risks to the investor/contractor, especially the risk of their finances being in the waiting period; � 50% discount on various binding fees (for example, those related to infrastructure, etc.) for projects applying for a particular green certificate.

The point of these initiatives is to create a clear foundation for green construction. In order to succeed, it is necessary to harmonize the entire system. As I often say, we all need to be involved in that joint endeavour.

INTERVIEW

DEVELOPMENT IN LINE WITH CHANGES Investors know how to recognize where there is demand and space for investments Text: VLADIMIR MITIĆ

ith the advent of digitization and category of the hotel and requirements of the change of our ways of life, all a certain brand. For example, an InterConfields of business have changed, tinental hotel requires room size of at least and the real estate world is constantly in flux.

40 square meters. The Indigo hotel chain is These days, shopping malls are expected to characterized by its respect for the culture provide much more content to their visitors and the history of the area in which their hoand be a place for socializing, walks and fun, tels are located. not just shopping. Business premises must provide employees an area where they can You have positioned yourself as a regional relax and have fun, not only to work, says company. On the basis of which criteria and Zorana Ždrale Burlić, General manager of standards do you place your projects on difDelta Real Estate. ferent markets?

“All the changes aside, investors know how — We decide on where to invest by researching to recognize the demand and space for inthe market and business climate of the place, vestments. Currently in Serbia, housing conas well as knowing our own capacities. Ljubljastruction is at its peak, the prices of a square na did not have a high-category luxury hotel, meter are the highest in the region, the loans and with our know-how, finances and excelexceptionally favorable, but this trend will last lent cooperation with competent institutions, for a maximum of two years. Belgrade did not ZORANA ŽDRALE BURLIĆ we built InterContinental in only 18 months. have adequate retail, which investors picked The retail market in Banja Luka is very small General manager, Delta Real Estate up upon, and currently, there are several shopand in that fact we saw a chance to invest. At ping malls under construction. There is also a the beginning of next year, that city will get demand for business space. Next year, we’ll be opening the largest shopping mall in Bosnia and Herzegovina, Plans Delta Planet shopping malls in Varna and Banja Luka and one that will be able to meet the needs of not only Banja the Indigo Hotel in Čika Ljubina Street in Belgrade. We Luka, but also those of surrounding towns. The situation Next year, Delta will also start working on three other big projects: Delta in Varna is slightly different. The competition is strong, Real Estate will be opening Delta Planet Belgrade, Delta Center and the Delta Holding HQ. but our shopping mall will be completely different from Planet shopping The projects are an investment of 600 million euros and everything else in that city. malls in Varna will generate jobs for a total of several thousand people and Banja Luka and the Indigo during construction and after the opening of facilities.”

What are the biggest challenges of further developHotel in Čika ment of the real estate sector in Serbia?

Ljubina Street in What are the current trends in building retail and ho— The Biggest challenges in Serbia are bureaucratic and Belgrade. tel facilities? administrative in nature, as well as different rules for dif— Trends in retail are dictated by big brands and their ferent players on the market. Market security and clear needs. The current trend is that shops get fewer, while rules of the game are important to every investor. If that their size gets bigger, allowing customers to easily enis absent, then you are taking too many chances and end ter and exit the premises and feel comfortable there. In up deciding to play the game elsewhere, somewhere both shopping malls we are currently building we have, with clearly set rules. In Serbia, permits, administrative in agreement with the tenants, made the changes that and legal issues take too long, and this slows down the they need. The hotel industry standards depend on the development of our industry.

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THE GREATEST SUCCESS “Our employees are our greatest success, their knowledge expertise and dedication with which they do their jobs. Second, our reputation, including the reputation we have with banks when we arrange loans and terms of investment, as well as

with tenants, when we lease a shopping mall as soon as we start the construction. We are proven not only as experts in design and construction, but also in property management. Therefore, in the eyes of our clients and associates, we are a reliable, long-term partner. We plan to uphold that reputation in the future, with our results only improving.”

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INTERVIEW

TRUSTED INVESTOR ASSOCIATE The core competence of Konstruktor Group is the full implementation of the “design and build” concept Text: VLADIMIR MITIĆ

OGNJEN KISIN CEO, Konstruktor Group www.konstruktorgrupa.com

he Konstruktor Group started their activities in 2004, with the establishment of Konstruktor Consulting, the first company within the group. Today, several companies of various activities operate within the group. They have positioned themselves as one of the leading companies in Serbia in the field of high-rise building design and construction.

According to Ognjen Kisin, the CEO of Konstruktor Group, the core competence of this company is the full implementation of the “design and build” concept, that is, the concept of design and construction, where investors employ Konstruktor from the very beginning to the completion of the project. Construction of facilities according to the turn-key concept that we provide is also highlighted as an advantage for investors, which brings to better offers and shorter deadlines.

“Konstruktor’s infrastructure, as well as staff logistics and know-how facilitate the economization of in-

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Group activities The Konstruktor Group is consisted of several companies: Konstruktor Consulting, Konstruktor Metal, Konstruktor Equipment, Konstruktor Distribution and others.

vestors’ funds. The precondition for all of the above is the strength of the company, both in design and execution, and Konstruktor is strong,” Kisin points out.

These modern “trends” bring constant improvement and advancement of the engineers’ employees’ knowhow and become an inevitable part of the business.

What specific features of modern design and construction dictate today’s trends?

— Today’s “trends” are actually a constant advancement of the construction sector everywhere in the world, as well as the application of the latest technologies and materials to be implemented in modern architectural solutions.

What benefits to investors does the “design and build” concept, by which Konstruktor is recognizable, bring?

— The “design and build” was introduced to this region not so long ago and it brings great benefits to investors. Construction companies in Serbia are mostly either designers or contractors, which puts the investor in the awkward position of being

the arbitrator in case of any form of non-compatibility during project implementation.

“Design and build” means that the investor hires one company and thus has a single partner responsible for the entire process, from the very beginning to the end of construction realization.

As I mentioned, this is dependent on the company’s strength in design and execution. In such a way, investors get security, speed and guarantees.

The construction industry is among the least digitized industries in the world. However, Konstruktor recognizes the importance of the IT platform as a way to support the functioning of unified procedures. How does this approach benefit investors?

— It brings transparency. The unified procedure allows access to all information in the form of submitted documentation for obtaining building permits and other essential elements in the process of obtaining permits for each individual project.

To date, you have built over 200 different buildings or more than half a million square meters. Which project do you consider the greatest success the company ever achieved?

— The construction of each building had its own difficulties and challenges.

If I had to single out the biggest, let’s say there are two, Grundfos in Idjija, the greatest investment of 2012, and the Lidl Administrative Building in 2017 in Stara Pazova. This was due to high-quality facilities, reputable investors and tight deadlines.

The Grundfos investment amounted to 27,000 square meters and the construction works were completed in a record time of nine months, while Lidl was the most complex business building in the region, built according to the highest quality standards.

Both buildings were turn-key contracts. This year, we are constructing another building for Grundfos, and a fourth for Lidl.

Concept “Design and build” means that the investor hires one company and thus has a single partner responsible for the entire process, from the very beginning to the end of construction realization.

What are the biggest challenges your company has faced on the market

IMPORTANT RECOGNITION Konstruktor Consulting received a very important recognition as the fastest growing company in Serbia, i.e. the Golden Gazelle of Serbia. What can you tell us about that?

We are very pleased with the recognition; the award is made even more important by the fact that it is awarded

by Bisnode, the leading commercial rating analytics company, and a jury consisting of renowned members. We will continue to grow at the same pace, while following market needs.

during project implementation?

— The answer to this question is similar to the previous one. Each of them had a specific challenge depending on the difficulties that came with it and the uniqueness of the project. Some common challenges that arose, and still do, are tight deadlines for the construction of buildings according to the highest quality standards under a turn-key contract.

Building a large and demanding facility in a short time period is definitely a challenge, and a consistently successful realization is one of the motivating factors for our employees.

What will the key directions of your company’s development be in the upcoming period?

— Investing in human and material resources within the Konstruktor Group are endless, and this is something that will remain so forever.

It was quality that brought the best results to the company and facilitated its constant growth. By building ourselves up, we also built better deals and more facilities for our clients.

Consequently, the volume of our work increased year after year, and re-hiring by investors became a recognizable feature of Konstruktor’s identity.

Our intention is to keep confirming our leading position on the Serbian market in the field of design and construction by the turnkey system, logistics and retail facilities, as well as the position of a reliable contractor of business facilities and residential complexes.

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15

INTERVIEW

CUSTOMERS DEMAND QUALITY Nowadays, investors approach their projects with more care and professionalism, in line with the demands of their customers, who have become better educated Text: VLADIMIR MITIĆ

VLADIMIR ŠOJIĆ Director of Sales and Marketing, Galens invest

he new building sector in Serbia has lately been expanding, but not at the same speed as it was in 2008 and 2009, Vladimir Šojić, director of sales and marketing in Galens Invest, says. According to him, nowadays, investors approach their projects with more care and professionalism, adhering to the demands of the market and trying to attract future clients by using modern materials and by designing family housing.

“Customers are now educated to the extent that they recognize and demand quality and follow trends.

Therefore, our housing construction is in line with global trends, if not better, as I had the opportunity to visit construction sites and newly built complexes in major European cities.”

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What do customers pay most attention to, according to your experience?

— Customer profile has changed significantly over the past five years. As I mentioned, they are now educated about the market, apartments are no longer purchased as an investment, but rather as a family home.

Therefore, attention is paid to the

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Plans Galens invest currently has active construction contracts of over 200,000 square meters, and in the next two years will invest in the construction of over 500,000 square meters of residential and commercial buildings.

micro-location, the substance of the building, the vicinity of the necessary institutions, energy efficiency, security and, naturally, the amount of parking spaces.

How important is the selection of modern materials and equipment in the realization of construction projects?

— In my previous answer, I already mentioned important factors for the realization of residential objects.

As for commercial facilities, there is still a great demand for quality business spaces, especially in Novi Sad, in a good location, where location is everything, quality design space and the use of modern materials and the VRF systems (central air conditioning, ventilation and heating) and a significant reduction in monthly maintenance costs.

On the basis of which criteria and standards does Galens Invest choose its projects?

— The process of determining the criteria for Galens Invest’s projects

begins with the selection of the site, where we strive for the opportunity to create the urban design of the building ourselves and design it in line with market needs, 11 years of experience and over 300,000 square meters of living space built and sold.

What projects do you plan in future?

— Currently, several projects in Novi Sad and Belgrade are in the works, projects which we plan on initiating in the next two years.

Their technical documentation is near completion; in Novi Sad the construction of the “Garden Avenue Residence” complex with 600 residential units will begin by the end of the year. In Belgrade, the construction of the “New Minel” residential and business complex in Tošin Bunar will also start by the end of 2018, and it will contain over 120,000 square meters of residential and office space. Speaking in figures, over the next two years, the planned building investments will be over 500,000 square meters of residential and business spaces.

PORTFOLIO Galens Invest 11 Hajduk Veljova Street, 5th floor, Novi Sad, +381 21 427 716 office@galens.rs, www.galens.rs Most important project: PUPIN’S PALACE, NOVI SAD Type of object: Business-residential complex Status: Completion of construction 2019.

MARKETING AND SALES

SUPPORT TO INVESTORS The outcome of an investment and its potential success should be foreseen at the very beginning, with the most significant factor being the mixture of marketing and sales

VLADIMIR POPOVIĆ Co-owner and Managing Director, West Properties

constant high demand for real estate, along with a small supply cannot be a guarantee that the investor will sell everything if the project is not approached in an adequate manner.

Consultancy services provided by West Properties include advice on what is best built in a particular location, financial feasibility and cost-effectiveness analysis, project management during the adaptation or construction process, real estate marketing, best use of space, all the way to professional management of real estate and the process of its maintenance.

With this, we provide key information to the investor on the basis

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Panorama Voždovac

Decision West Properties provides key information to the investor on the basis of which they can make a decision on whether to start with the realization of the project or not.

of which they can make a decision on whether to start with the realization of the project or not. The final outcome of the investment and its potential success should be foreseen at the very beginning, with the most significant factor being the mixture of marketing and sales. Foreign investors know these principles very well, while the local ones talk to us the most when there is already a problem in construction realization.

Let’s put it this way. One of the successful projects West Properties worked on is the Panorama Voždovac. The sale was officially launched on September 27th 2017, when the show room was opened, and by November 2017, 60% of apartments there were sold. It was not a success overnight, as we started working on the project much earlier using a good selection of marketing tools and today, the whole of the complex is sold away, a long way away from the completion of construction. With this method, a

need of potential customers is created for a certain building. In addition, sales on this project were conducted in such a manner that a rise in price of over 40% was achieved, compared to the initial price of a square meter of property.

During its 17 years of existence, West Properties strived to always provide its clients with a better way of doing business. Care for our clients and their interests has always been our priority. We consider each client as a long-term partner to whom we provide a custom made service, which is an approach that distinguishes us.

We help investors decide on a location for their project, on its look, on which final materials to use. We advise them on the organization of housing units, including their size, the percentage of certain structures in the total number of housing units, as well as unit layout, all for the purpose of faster and more successful sales, as well as better positioning of the residential complex compared to the competition. Our services include price proposals for each apartment, depending on a number of different parameters, the dynamics of payments, and the creation of special discounts, along with the proposal of legal and administrative documentation accompanying the sale process.

Based on macro and micro research, we are here to give input to the investor, so that they could create a building in harmony with the location and a project that can generate a good result, saving time and money, and increasing the profit by approaching the project the right way.

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INTERVIEW

ARCHITECT AS PRODUCT INTEGRATOR From the very concept design, architect integrates the ideas and requirements by investors, finance, marketing, energy efficiency, real estate Text: VLADIMIR MITIĆ

es as opposed to general buildings.

That would put Serbia on the map of world Architecture.”

DANILO DANGUBIĆ AA Dipl Arch RIBA, Danilo Dangubić Architects

rchitecture thought has long ago became global and it does not recognize borders as such, It’s manifestation obviously adopts specificities of place where it realizes in a manner of differentiation of culture, societies, climate among many aspects that shape Architecture, points out architect Danilo Dangubić referring to the question where is Serbia comparing to the world terms.

“It is hard to talk about Architecture as a local phenomenon. As a profession, Architecture is integral part of large industry and the most vulnerable to turbulence within. It shares the destiny of specialties and professions involved in building our surroundings. In Serbia, it is ever more enlightened capacity and impotence of Architecture in process of project creation, which is really good. Even more buildings have architect’s signature, redefining culture of living and aligning itself with cultural body of cities and state. At the moment we are in expansive investment cycle and it is important not to miss the opportunity to build as many important Architectural masterpiec-

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Crucial “For me as an architect it is crucial to create quality, inspiring and intuitive space for life that is flexible to accommodate various concepts of lives at the moment and through time.”

How has change in buyers profile influenced strategy from the point of Architecture?

— Humans are in epicenter of architectural thought with all its individualities, needs and way of living. As such he is a buyer for only short instant of time, for the major part of his life he is an inhabitant that merges with space he lives in. He shapes that space and the space influences human. For me as an architect it is crucial to create quality, inspiring and intuitive space for life that is flexible to accommodate various concepts of lives at the moment and through time. Residential ings as a typology has come long way

of transformation in Serbia. Whole model has been redefined, the way residential buildings are financed, designed, built and at last the way they sell. For more than fifty years apartments were ‘honored’ so the concept of purchase and Real-estate market is relatively new and it is just reaching its full affirmation. People are ever more informed of qualities and performance architecture offers and in positive manner they are even more demanding when it comes to their future dwelling. So, I would not agree we are experiencing a change of users profile but more so each user represents a unique profile itself. Adding to this factor of time and change of demands and needs of each user we are faced with a very complex model of residential building typology. It is

diversity of end users for whom we are designing that becomes a potential for creating inspiring and innovative spaces and buildings.

What are the means of securing additional value to future buyer or user of the building? What are the principles you are led by?

— Building as an architectural masterpiece is greatest addon value you could give to an end user. Recognition and uniqueness of architectural concept and form stands-out particular building from the rest and becoming a landmark. Architectural quality through material and detail secures longevity of building which is another important parameter that quality wise determines value of the building.

By means of energy performance we create comforting living space, extend buildings lifespan, rationalize its maintenance and creating vast savings in buildings exploitation. Special value to a project is given by concept of living you build into it. Primarily it refers to those particular life rituals that make life fulfilling and great and architecture elevates it through shaping of space, material and light.

How particular trends, such as green building, change todays architecture?

— Trends are not inherent in architecture, because it is a long-term conception of quality of the greatest importance and needs of man, while trends are short-lived and limited by particular fascination. Nature is an integral part of the quality-of-life system, and therefore the concept of nature is integral to architectural consciousness. As a trend in projects, nature and greenery are often banalized and brought to the absurd in a perverse treatment where they contradict the basic concept of sustainability and energy efficiency. Buildings are an ever-increasing energy generator, we are nearing the day when

they will reach the level of efficiency that they will be able to give in and exchange energy. At that moment, the buildings will cease to be contaminants, and this will be the largest essential contribution of Architecture to nature. It is precisely this concept that is an integral part of every project I work on. Efficiency and high performance in every aspect of Architecture create all the more autonomous buildings that do not depend on infrastructure, but rather use it to communicate and exchange energy and resources between each other.

Cities with such buildings will represent urban equilibria against the conglomerate of dependent consumer buildings as we know them today. Led by these principles, we are already creating Architecture in which man and nature are generators of the idea of each project.

In relationship among architects with the investor - how each of these two factors should be involved in the decision-making process?

— There is almost no successful project without successful and close collaboration among investors and architects. These projects are the crown and the manifestation of this joint work. Construction is a long-lasting and demanding process that requires close cooperation and trust between investors and architects so that many participants of the process can complete and bring their specialty to the highest level. They lead a vast team of experts and specialists through the implementation of the project. From the design of the concept, through the definition of the budget and its realization to the very opening of the object, the investor and the architect communicate one, the same idea in each of their own languages. As opposed to decision making, it is much more important for the investor and architect to participate in the adop-

ABOUT DANILO DANGUBIĆ Danilo Dangubić leads architecture office Danilo Dangubić Architects in Belgrade.

He graduated from prestigious school of architecture Architectural Association in London where afterwards he was teaching. Main studies in architecture he completed at Drury University in USA. He is an author of cultural, residential and office projects amongst recently completed mixed-use building SK12 Concept of Living in Pančevo.

Collaboration There is almost no successful project without successful and close collaboration among investors and architects.

tion of the concept, framework and all the parameters that define the project, to stimulate each other to achieve maximum in the challenges that each project provides.

It seems that architects today have a new role (product integrator) within the entire construction project.

What exactly does this role mean?

What is your approach?

— Architecture as a profession redefined itself at the end of the last and beginning of this century and became a space or platform for many specialties, and primarily facilitating communication between them. Many analytical specialties have found their place within the architectural concept of design. New communication and media technologies are now an integral part of the process of creating what we call architecture in classical terms. So, it can be said that the architect is the integrator of all the specialties that participate in the creation and fabrication of buildings and cities.

From the very concept design, architect integrates the ideas and requirements by investors, finance, marketing, energy efficiency, real estate, and in the end, becomes part of the real estate team in order to support and communicate technical and technological qualities to the end user and contribute to affirmation of the new building. That is exactly where my approach to architecture and the process of creating objects is reflected. Designing a vision, taking responsibilities and leading a team of various specialties to the ultimate construction of this idea.

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SMART SOLUTIONS

MAKING CONSTRUCTION PROJECT MANAGEMENT EASY Buildcon enables companies to easily control several large projects at once, eliminate hidden costs and increase productivity

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uildcon is a cutting-edge cloud-based software for cost control, planning and reporting on construction projects.

This web and mobile solution is used by real estate investors, contracting companies and consultants.

Buildcon is aiming to fix currently major problems in the construction industry. Real-time information that software provides will prevent work stoppages, money hemorrhages and most importantly, drastically boost productivity.

The right information at the right time can be used to prevent expensive delays but also to plan the execution for the upcoming months. When we are certain that everything is under the budget, we are making faster and

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better decisions. We don’t have to wait for the monthly or weekly reports, we have that information instantly.

EVERY MAJOR PROJECT PARTICIPANT IS ON THE SAME PLATFORM Problems on construction projects are usually fixed by throwing more manpower and overtime hours. Buildcon cost control analytics will show if that’s the best solution (most cost-efficient or not). That’s saving huge amounts of profit that gets eaten by overtime costs.

Changing orders is also one of the main reasons for hidden costs. Work is performed on unapproved change order incurring a pure cost that wasn’t accounted for in the budget and contract. Buildcon provides total control over change orders so we can budget them and easily find a solution how to cover costs and stay on the budget.

The connection of data and information between a site and the office is crucial. Field tracking feature in Buildcon is created in such a way that every project progress is controlled by solely providing installed

quantity directly from the field that is marked and measured on the digital plan. Just with that, the system is automatically calculating progress, cost, material usage, performance and payment certificates. Having a control like that is how we can eliminate hidden costs and significantly boost profit.

PERFORMANCE FIRST Dynamic performance plan tool in Buildcon provides easy control of progress and prediction of the final result. Each group of work is represented in the performance table, so we know immediately if some of them are late, how it will affect the project on a monthly basis, and what corrections need to be made.

If we are working with different subcontractors and suppliers, it is really important to know how much revenue we can expect and how much of that revenue you need to allocate for operational costs and subs. With this system, you have that information at any moment with a clear picture of expected revenue and costs for the upcoming months.

Adaptable solution Buildcon software is easy to deploy and adaptable to the size and scope of the work of each company that uses it.

REPORTS - ANYTIME AND ANYWHERE Definitely, the most interesting thing for managers and executives is interactive and always relevant reporting across their portfolio. Buildcon delivers all necessary reports automatically generated for any type of projects. Performance plan, cash flow, monthly reports, everything by the highest industry standards.

CONTACT Buildcon Phone: +381 63 553 565 E-mail: office@buildcon.org Vojvode Stepe 18 Belgrade, Serbia www.buildcon.org

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INTERVIEW

SUCCESSFUL EXPANSION When entering a foreign real estate market, carefully studying all aspects specific to each market is key Text: KSENIJA MIJATOVIĆ

tion in the private sector. When it comes to public procurements and state tenders, even if local citizenship is required, that can always be overcome by establishing a legal entity at the local level. As for construction permits, globally, as in our country, a foreign investor applying for a building permit must own a company registered locally, as well as meeting all other requirements of local legal regulations. Thus, it is no longer a foreign, but a domestic legal entity.

KATARINA PREDIĆ Partner Tax, VAT and Transfer Pricing, Eurofast Global

dvice to investors who are considering investing in foreign markets would be to examine property taxes, as well as double taxes avoidance agreements with countries that they are considering investing in, says Katarina Predić, a partner at Eurofast Global.

“The decision should be made based on which countries Serbia has the most favorable agreements on how real estate income is treated, as well as capital gains from sales of real estate and dividend tax.”

Regarding the general aspect of the risk of entering a foreign real estate market, the key is to carefully study all aspects specific for each market, Predić points out.

“Of course, legally speaking, doing a flawless title search, one that would confirm the absence of any surprises, is essential. When buying property, make sure that it is registered in the cadaster, that there are no uncertainties or interruptions in ownership and verify that the real estate does not come with any burden, such as mortgage, litigation, etc.”

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Are investors from non-EU countries in a disadvantaged position compared to investors from member states when competing for deals in EU countries?

— I do not know of any such distinc-

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Market entry Eurofast offers a structured approach to market entry with their professional network having strong understanding of international and cross cultural issues for successfully doing business.

Are there countries where there are benefits for foreign investors in the real estate sector, and if so, what would those reliefs be?

— If by reliefs, you mean exemption from property tax and income or profit from said property, it does not exist as such. However, in some countries, including our own, underdeveloped areas are defined and investments in the form of purchase of real estate in those areas are encouraged by packages of measures and facilities, provided that those investments contribute to the development of the local economy. In Serbia, for example, one can purchase land in devastated regions, provided that the investment helps the development of the local economy. As far as indirect benefits go, in some countries, citizenship can be obtained by purchasing a property of a certain value, and in others, residence and the right to work in the EU. There was a number of concerns regarding the exemption from added

value tax in construction. From the point of view of this sector of industry, how would you rate the Serbian tax system?

— In order to stimulate construction, the legislature significantly expanded the volume of VAT exemption. Before that, only the biggest contractors that invoiced works on construction of a facility were exempted from VAT. However, the changes introduced three years ago, specifically since October 15, 2015, brought the exemption of all entities providing services in the field of civil engineering in the cases where services rendered belong to one of the activity codes listed in the Goods and Services Regulation. That is to say that the activity for which the legal entity is registered does not matter, but whether the services provided by it belong to some of the codes listed in the Regulation. The exemption is applicable if both parties are in the added value tax system or if the recipient of the service is an administrative body that performs management tasks. There are two practical questions that cause concerns and numerous queries to the Ministry of Finance: one is when the taxpayers are not sure if the services they provide belong to one of the codes, and the other is the uncertainty about which administrative bodies deal with management affairs. Thus, whitewashing is exempt from tax, while the provision of building services to schools or communal facilities is not, because, although they are administrative bodies, do not perform management tasks.

KPMG’s Property Lending Barometer

INCREASED FOCUS AND SUSTAINED ACTIVITY Latest surveys in Serbia show lack of strategic importance to real estate financing s we can see in the 9th edition of other European economies, mostly western, KPMG’s Property Lending Baromas the relatively high interest premiums in the eter, Europe’s property markets CEE region gradually decreased, approachhave seen stable lending activities recently. ing the level of what banks apply in Western Our study attempts to assess the prospects Europe: i.e. 3.1-3.3% for CEE and 2.7-3.0% for for lending in a number of European marWestern Europe in 2018. kets and depicts the specific mood of lendIn Serbia, loan interest premium applied ing sentiment in each of those countries: by banks for highly rated real estate projects Austria, Bulgaria, Croatia, Cyprus, Czech in case of new developments ranges from Republic, Hungary, Ireland, Netherlands, 3.00-4.7% and in case of income generating Poland, Romania, Slovakia, Slovenia, Sweprojects from 2.9-4.3% in 2018. den, and, of course, Serbia. The survey queRegarding asset class, still there remain ried 70 bank representatives from the 14 essential differences for lenders in Western countries included in the report.

Europe compared to those lending in developThe part of the optimism surrounding the ing markets in Central & Eastern Europe, with financing of real estate projects in Europe residential being preferred area for lenders may have to do with the fairly upbeat ecoin established markets like the Netherlands, nomic activity recently seen across much of Austria or Ireland. Meanwhile, most in CEE the continent, where the decent economic have indicated their preference for the office SANJA KOČOVIĆ growth as well as other improved economic segment, while the industrial/logistics asset measures we’ve seen in the last few years may class is also becoming increasingly popular.

KPMG d.o.o. Beograd continue, though at a more moderate pace. Director, Financial Institutions & Services Latest surveys in Serbia show lack of straReflecting on Serbia, real GDP growth tegic importance to real estate financing, with accelerated to an average of 4.9% year on only minority of participants (20%), increased year in the first half of 2018, from 1.4% in the same period their interest in the particular area. Traditional commercial as in 2017. The forecast indicates an average GDP growth banks are still seen as major players in the lending marreaching 3.30% in 2018 – 2020 period, in comparison to ket, followed by private equity and debt funds. The same anticipating growth of approximately 2-3% across Europe. survey shows average loan size of EUR 14.4-23.4 million.

However, the first half of 2018 has shown that European Impaired loans are fewer and fewer in the CEE region. property investment has seen somewhat of a reduction The proportion of fully compliant loans in banks’ portwith an investment volume for the first six months of this folios in Central & Eastern Europe has become much year decreased by 19% compared to H1 2017(reaching just greater, which is the trend being recently experienced below EUR 110 billion). in Serbia as well.

The most significant factor influencing loan portfolios Although financial institutions remain cautious when has always been the macroeconomic conditions in the it comes to real estate financing, there is an anticipated Reduction local market. A dynamic change in loan interest premimoderate growth in the next 12-18 months. This is mostThe first half of ums applied by banks for highly rated real estate projects ly consistent with banks’ expectations of growth in their 2018 has shown shows the clear convergence of two regions - CEE and own real estate loan portfolios.

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that European property investment has seen somewhat of a reduction with an investment volume.

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ITERVIEW

EFFICIENT MANAGEMENT OF ENERGY POTENTIAL Energy planning begins and ends with analyses from Kamstrup metering devices Text: KSENIJA MIJATOVIĆ

BRANKO CRNČEVIĆ CEO, Termonet

enmark is the European leader in energy saving and implementation of most advanced energy solutions. We asked Branko Crnčević, CEO of Termonet, a company representing Danish energy group programs in the field of thermotechnics, in what way are these enviable results achieved and what Serbia could implement.

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What is the basis of such an ambitious plan of Denmark?

— There is no single answer to that question. The tradition, economy, efficient management of energy potential and solutions in financial investments certainly form the foundation.

We have to look to the past, specifically 1903, when the first communal waste incinerator was built in Copenhagen, which in addition to hot water used for heating, also provided electricity through a steam turbine (cogeneration process). At the time of the energy crisis in the 1970s, the Danish government adopted a se-

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Data Management Kamstrup has outstanding software and hardware for communication, reading and analysis of data from energy networks, as well as data from individual users.

ries of acts outlining future energy development – an act on electricity generation and supply, a district heating act, a district cooling act, an act on energy efficiency and construction, etc. The government also made a number of incentive regulations related to taxes, subsidies and a number of mechanisms for their implementation. New taxes on energy consumption had also been introduced. In essence, as little dependence on imported fuels and fossil fuels and as much reliance on available renewable, domestic sources of energy as possible.

I should mention Denmark’s remarkable results in rationalizing energy consumption, namely, gross energy consumption in Denmark has remained roughly the same since 1975, and in the same period, its GDP has increased by over 100%. This is the result of significant improvements in end-user efficiency, as well as the transition to combined and renewable energy sources. At present, renewable energy sources account for around 30% of total consumption in Denmark. An interesting fact is that 40% of total energy consumption is related to buildings, and there is still significant potential for reducing this consumption. As a basis for everything I mentioned, there is a healthy and

strong economy. Thus, the entire system is rounded, with the decisions and plans reality-based and with a healthy perspective.

The increasingly mentioned smart cities rest on smart grids. What are smart grids and what must they provide?

— A smart grid, a secure power transmission network from a source to an end user, essentially envisions a twoway communication system for devices designed to measure and control the energy system. It provides fast and secure communication aimed at gathering relevant data and forming of databases, so that the end user would be provided with a secure and reliable service.

A smart grid must ensure the integration of all energy sources into a single distribution system, which includes the generation of renewable sources, heat pumps, energy storage, a power supply for electric cars, etc.

Ensuring the efficiency of the daily operational network lies in automation, control and operation in real time. Detailed operational information provides quick detection of errors, a better understanding and management of technical and non-technical losses, leading to optimization, quality maintenance and more sys-

tem efficiency. Smart grids provide data, which, in turn, ensures better planning, capacity planning and the quality of supply. It is very important to ensure the direct participation of end users in energy management.

Micro networks, as a functional units, are connected to the smart grid, providing direct connection of renewable energy source to the global system, and are most often controlled by the end user.

How far is Serbia from introducing such solutions?

— For several years now, Serbia has been working on the reconstruction of the energy system. The replacement or reconstruction of power plants, the introduction of modern metering, monitoring and new control devices, the construction of various renewable sources: all this is aimed at energy savings, however, at this level of economic and technological development, we are still far from the achievements of West European countries. Energy inefficiency is still great.

Energy efficiency is currently the most important field of investment aimed at reducing the specific ener-

gy consumption, which is currently about twice as large as in the EU countries. There is an evident lack of coercion by the state as well as rigorous controls in order to increase energy savings and uphold the laws more efficiently. Project that do not envision an adequate level of energy savings are accepted, with the aim of investment reduction. Accepting the fact that energy savings and energy efficiency are a national issue, not a matter for individual investors or the disposition of individual users, is inevitable.

Considering that Termonet is a representative of Kamstrup in Serbia, can you provide us with a closer look at this Danish company? Why is Kamstrup the world leader in the production of heat, electricity and water metering devices?

— Kamstrup is the owner of all plants for the production of these metering devices, which are used for metering individual energy consumption, cold and hot water, as well as similar devices connected to the distribution network and in industry. This allows for the selection of the finest materials and com-

Supply Termonet completes the range of equipment that is built into the systems of transfer, regulation and metering, primarily of thermal energy.

ponents from which the product is made. There was no compromise.

The longest service life and the least investment in maintenance makes it stand out compared to competitive products.

Permanent investment in the development of new technologies and user capabilities of metering devices puts it at the top of the list of manufacturers whose equipment is recommended for installation in metering and energy saving systems. It has outstanding software and hardware for communication, reading and analysis of data from the energy network, as well as data for individual users.

Energy planning and management begins and ends with analyses from Kamstrup metering devices.

What services does Termonet provide to its customers?

— Since its foundation in 2001, Termonet, as a representative of Kamstrup and other companies of the Danish energy group, completes the offer of equipment that is incorporated into the systems of transmission, regulation and metering, of primarily thermal energy - to heat substations, metering of end consumer energy consumption in housing units, as well as metering the individual consumption of cold and hot water. We provide a complete remote reading service from the aforementioned metering devices, as well as a remote monitoring and control system.

We are strategically connected to the company NS Koncept from Novi Sad, which was founded the same year as Termonet. This cooperation has provided enviable results in the implementation of equipment for metering, energy saving and automation, as well as realization of remote systems of metering, monitoring and control.

COMPLETED PROJECTS With realized projects Termonet is present in almost all cities in Serbia, but the projects in Novi Sad are especially emphasized, in which all heat metering, primarily in substations and secondary ones at the end consumer, are exclusively Kamstrup’s. The installation and application of Kamstrup equipment began 15 years ago, and it continues today, which is a direct confirmation of quality. Kamstrup’s remote reading system was also well received. The control of production and district heating of Novi Sad, the automation of heat substations, performed mainly by Danish equipment, is the result of professional engagement of NS Koncept.

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REAL ESTATE

ORGANIZER

INSTITUTIONAL PARTNERS

PARTNERS OF THE ROUND TABLE Delta Real Estate West Properties Galens Invest Konstruktor Group Danilo Dangubić Architects Eurofast Global

PARTNERS Termonet Buildcon Hicad

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