Huge demand for residential real estate in Belgrade

Serbia’s capital needs some 100,000 additional square metres of new apartments since the demand is that much higher than supply with the equally high demand for office space – CBRE Group, a commercial real estate services and investment firm based in Los Angeles, said on Wednesday, the Beta news agency reported.

Last year, an average price of apartments in Belgrade was 1,190 euro per square metre in old buildings and about 2,050 Euro in new ones, with three central districts, Vracar, Stari Grad and Savski Venac, topping the price list, CBRE Group, which has more than 450 offices worldwide, with clients in over 100 countries, said.

The Group, the largest company of its kind in the world, said the selling price of apartments in Belgrade would remain more or less the same in 2019. It should be the case with the rent cost for office space too, i.e., from 15,5 to 16,5 Euro per square meter a month in 2018. The lower prices could be expected in 2020.

CBRE said that, in 2018, building permits were issued for over 700,000 square metres in different categories.

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“Though the prices were going up in the last few years, the selling of apartments was on the rise. Most of them were bought before the end of construction, and even 82 percent were paid for in cash,” the group managing director for South-East Europe (SEE) Andrew Pierson, said.

Belgrade currently has 450,000 square metres of space in office buildings, additional 140,000 Class A premises are in construction, and it is expected that 60,000 square metres will be finished this year.

The majority will be situated in the municipality of Novi Beograd which already houses the headquarters of big foreign companies and banks.

That, according to CBRE, will increase the availability of office space for some 10 percent which is a minimum for attracting new big tenants.

Compared to other regional cities, office space rents are more expensive in Belgrade due to higher demand.

Retail construction remains focused on Belgrade and large-format shopping malls. With the availability of free space standing at nearly zero per cent, lease prices are up to 40 per cent higher than some cities in the region.

“Aside from the existing 150,000 square metres in the capital, 34,000 square metres will be added in 2019 and 137,000 square metres in 2020, and by that we mean modern shopping centres or Western-type shopping centres. Increasing the amount of available space will be relative to the entry of new brands in the market and the intensification of their activities. Reduction of existing annuity prices, now ranging from 27 to 29 euro per square metre, to 20 per cent from 2021 onward, will ultimately allow tenants to offer cheaper goods to customers”, explains Pearson.

CBRE says that in 2019 and 2020, some additional 170,000 square metres of the Western-style shopping malls will be built in Belgrade.

That, according to the Group, should attract new brands to the market, and the fall in rent prices for some 20 per cent by 2021, from the current 27 to 29 Euro per square metre a month in the existing shopping centres.

Apartments’ prices in Belgrade are lower than in Zagreb and Ljubljana, the capitals of Croatia and Slovenia, and more expensive than in Skopje, Podgorica and Sarajevo.

(Blic, 06.02.2019)

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