serbia
Serbia Investment and Export Promotion Agency
3, Vlajkoviceva St. 5th floor, 11000 Belgrade, Serbia
phone: +381 11 3398 550; fax: +381 11 3398 814
e-mail: [email protected]
www.siepa.gov.rs; www.doingbusinessinserbia.com
realestateopportunities
content
aboutserbia 2
stronginvestmentpoint 4
competitivetaxsystem 6
favorabletaxsistem 7
marketpotential 8
successstories 16
aboutsiepa 19
real estate in serbia
aboutserbia
It is fair to say that Serbia has seen tremendous
changes in the past decade. Since the offset of
economic and social reforms over €20 billion of
foreign capital has entered the country. Serbia
now hosts some of the biggest companies in
the world from automotive, food processing,
ICT, financial service and many other industries.
Today, more than half of all trade is done with EU
countries and they are, at the same time, biggest
investors. Attracted by favorable tax regime,
industrial tradition and skilled work force, a wide
range of free trade agreement and many more,
companies from all over the world continue to
invest in Serbia.
real estate in serbia
TIME
ZONE
3h
2h
1h
Geographic position
Due to its position on the geographic borderline
between the East and West, Serbia is often referred
to as a gateway of Europe. Two important European
corridors, VII – the River Danube and X – the
international highway and railroad, intersect on the
Serbian territory, providing excellent connections
with Western Europe and the Middle East. Serbia
88,361 km2
7.120 mn*
And it doesn’t stop there.
is thus a perfect place for a company to locate its
operations if it wants to closely and most efficiently
serve its EU, SEE or Middle Eastern customers.
Bordering the EU, Serbia still offers a possibility of
enjoying all benefits of working outside the EU while
being able to provide services and transport goods
in projected and flexible time frames.
Corridor 10
Corridor 7
Motorway
Railroad
Airport
River port
€ 28.7** bn
EU accession process is bringing changes to all
levels of society, adopting both European laws
and values. With EU candidacy status awarded
in 2012 comes both certainty and predictability
for investors and their projects. With WTO
negotiations in final stage, Serbia is becoming a
choice of many.
Having all that in mind, we hope this report will help
you see market potential in Serbia, its unsaturated
market and opportunities for new projects.
Although we have seen significant investments
in CEE countries, Serbian market remains under
supplied compared to neighboring markets. This
is true especially for retail sector, with only four
modern shopping centers in the entire country.
Serbia, with its population of over 7 million is the
biggest country in the region and its market is
ready to develop further. Positive regulations set
forth by the government have already attracted
big names from various industries and market is
set to boom again in the near future.
2
€ 3,967**
Climate
Temperate continental, with
monthly average temperatures
ranging between 0.7°C in January
and 17.5°C in July
Major Cities
Belgrade: 1.6 million*;
Novi Sad: 0.34 million*;
Nis: 0.26 million*
*Source: Statistical Office of the Republic of Serbia
**Source: Ministry of Finance and Economy
3
real estate in serbia
real estate in serbia
Largest Foreign Investors in Serbia
stronginvestmentpoint
Gazprom
947 million €
Heineken
67 million €
STADA
650 million €
US Steel
280 million €
AB InBev
530 million €
FIAT
944 million €
Carlsberg
160 million €
Telenor
Benetton
43 million €
Michelin
150 million €
1.602 million €
Delhaize
932 million €
Mobilkom Austria
Since the onset of economic reforms in 2001, Serbia has grown into one of the premier
investment locations in Central and Eastern Europe. In the past ten years alone, the country
attracted over €20 billion of inward foreign direct investment. The list of leading foreign
investors is topped by world-class companies FIAT, Microsoft, Embassy Group, Siemens, AFI
Group, Plaza Centers, NCR, STADA, BOSCH, Michelin, Telenor and more than 500 companies
from around the globe.
570 million €
Intesa San Paolo
508 million €
Eurobank EFG
500 million €
Bosch
Foreign Investments in Serbia by Value and by Sector
Foreign Investments in Serbia by Number of Projects
Financial
Food & Beverage, Agriculture
Telecommunications
Retail
Automotive Industry
Oil & Gas
Real Estate
Tobacoo
Construction
Pharmaceutical
Others
Italy
Germany
Austria
Slovenia
France
Grece
Israel
United States
Croatia
Switzerland
Others
19.6%
13.3%
10.7%
9.2%
8.0%
7.3%
7.2%
4.8%
4.0%
3.8%
12.3%
Source: SIEPA Investment Database, 2000-2012
4
51
70 million €
Cooper Tires
50 million €
Kronospan
150 million €
Source: SIEPA 2012
44
43
33
19
16
15
15
8
7
88
Source: SIEPA Investment Database, 2000-2012
5
real estate in serbia
real estate in serbia
competitivetaxsystem
Serbia’s tax regime is highly beneficial for doing business. The Corporate profite tax, which is paid at a uniform rate
of 15%, is one of the lowest in Europe, while VAT is among the most competitive in Central and Eastern Europe.
Taxes Related to Real Estate
Apart from the 8% Value Added Tax for the sale of newly built structures and 20% for
other structures, real estate property in Serbia is subject to three basic taxes:
• Property Tax,
• Tax on Transfer of Title, and
• Capital Gain Tax.
Property Tax is payable by all legal entities and
individuals who own or have rights over real estate
located in Serbia. For a taxpayer who keeps books,
property tax on the rights to real estate is maximum
0.4% of the property’s book value, while for individuals
and entrepreneurs the rates are progressive.
Tax on Transfer of Title over property is payable
by all legal entities and individuals who sell rights
in relation to real estate. The taxable base is the
price stated in the contract or the market value of
the property, with the current tax rate set at 2.5%.
This tax is not payable on the sale of real estate
property rights to physical entities, purchasing the
first apartment under the 40 sqm area, as well as up
to 15 sqm for each member of their households.
Capital gain is determined as the difference between
the sale price and purchase price of the real estate.
The applicable rate is 15% for both physical and
legal entities, while for capital gains realized by nonresident tax is 20% or in accordance with a Double
Taxation Treaties. Capital gains can be offset against
capital losses, occurring in the same period. A capital
loss can be carried forward for a period of 5 years.
6
favorabletaxsistem
Serbia’s tax system is highly conducive for
investment. Apart from featuring one of the lowest
corporate profit tax rates in Europe, investments
can benefit from various tax incentives which
create excellent start up conditions.
Financial Incentives
Highly competitive and diverse investment incentives
are designed to reduce the costs of investment
projects in Serbia. For standard-scale Greenfield and
Brownfield projects, non-refundable state funds are
offered in the range between €4,000 and €10,000
per new job created within 3 years. Investments of
over €50 million that create the minimum of 300 new
jobs within 3 years can be subsidized in the amount
of up to 20% of the project’s value.
For a detailed overview of tax incentives
and financial suport program please refer to
specialized SIEPA brochures at www.siepa.gov.rs.
Free Trade Zones and
Inward Processing
Exporters in Serbia do not have to be concerned
with import duties and VAT on materials from
EU or any other country in the world. In order to
stimulate export oriented production, Republic
of Serbia provides custom and VAT free import
of materials through the Inward Processing
procedure. The general permission for Inward
Processing is obtained once a year but even
further simplification of the procedure can be
gained by operating in one of the Free Trade
Zones. The Free Trade Zone is considered to be
outside the custom system and all goods bound
to factories inside them are custom and VAT free.
Corporate Profit Tax
Bulgaria
Serbia
Romania
Hungary
Poland
Czech Republic
Croatia
Slovakia
10%
15%
16%
19%
19%
19%
20%
23%
Salary Tax Rate
Serbia
Czech Republic
Romania
Hungary
Slovakia
Bulgaria
Poland
Croatia
12%
15%
16%
16%
19%
20%
18-32%
12-40%
VAT
Serbia
Slovakia
Bulgaria
Czech Republic
Poland
Romania
Croatia
Hungary
20%
20%
20%
21%
23%
24%
25%
27%
7
real estate in serbia
real estate in serbia
marketpotential
Real estate market in Serbia is a young emerging market
which began to develop some 12 years ago. Over these
twelve years, over half a million of m² of modern office,
retail and logistic space was added to the market, most of
it in the 2004-2008 period. Although we have, during this
period, seen a boom in this sector,Serbia remains one of the
undersupplied countries in the region in terms of office, retail
and industrial space. Over the course of last four years we
have seen some projects being delayed mainly due to the
financial crisis, but the fact remains that Serbian market is
opened and undersupplied.
Serbia has, in 2012 alone, attracted close to 2 billion € of
foreign investment, varying from automotive to ICT and
construction industry. Most of the secondary cities are still to
see modern offices, shopping or leisure time facilities.
Office
In recent years we saw a number of international
companies entering Serbian market which
brought to office development boom. Over
250,000 m2 of class A premises were built
following economic development of the country
and the increased demand from companies from
various industries.
Strong demand reflected in respectable foreign
investors entering the market bringing with them
international know-how, experience and new
and modern facilities. Companies like GTC, CA
Immo, BOP Immoand AFI Group are already
present on the market.
8
Office
Class A Office Stock (m2)
326.000
Class B Office Stock (m2)
284.000
Prime Office Rent (€/m2/month)
14 - 16
Vacancy Rate as of Q3 2012 (%)
16
Retail
Prime Shopping Center Stock (m2)
98.000
Number of Prime Shopping Centers
4
Average Rents in Prime Shopping Centers (€/m2/month)
27 - 29
Prime High Street Rent (€/m2/month)
65
Prime High Street Rent (€/m2/month)
80
Vacancy Rate in Prime Shopping Centers as of Q3 2012 (%)
0
Industrial
Modern Logistics Stock (m2)
110.000
Prime Logistics Rent (€/m2/month)
4
Source: Jones Lang LaSalle, November 2012
Class A and B modern offices can only be found
in Belgrade and Novi Sad, second largest city
in Serbia. If we were to compare Belgrade to
capital cities in the region, we would see how
big the scarcity of the office stock is. Notably,
a city like Kragujevac which is home to the new
FIAT factory along with many of its suppliers has
no class A office space
All modern office buildings are located in the new
part of Belgrade and they host to large number of
international companies and banks operating in
City
Warsaw
Budapest
Belgrade
Population
1.7 million
1.7 million
1.6 million
Office Stock
3,745,000 m²
3,175,000 m²
610,000 m²
Serbia. On the other hand, downtown Belgrade is still
underdeveloped in terms of modern office space.
Refurbished old buildings in the city center mainly
accommodate media and publishing agencies, law
firms and financial consultants.
Modern Office Stock in CEE and SEE Countries (000 m2)
Warsaw
Budapest
Prague
Bucharest
Bratislava
Zagreb
Belgrade
500
1000 1500 2000 2500 3000 3500
Source: Jones Lang LaSalle, November 2012
9
real estate in serbia
real estate in serbia
Major Office Projects in Pipeline in Belgrade
Office Building
Size m2
Delivery Date
Status
Old Mill
3,850
2014
Under construction
Verano Block 23
30,000
n/a
On hold
Tri ListaDuvana
10,500
n/a
Shell and core completed
Atlas Building
3,500
n/a
Shell and core completed
West 65 office tower
37,000
n/a
Planned
BancaIntesa HQ
32,000
n/a
Planned
Source: Jones Lang LaSalle, November 2012
Office buildings classified as class A typically have
glass façades, raised floors, suspended ceilings,
modern heating and cooling systems, facilities
management, reception and 24 hour security.
The speculative office stock of Class A and Class
B buildings remained unchanged in the first 11
months of the year, however in December 2012,
the office building Danube Business Centre of
5,300 m² of GLA became operational, increasing
the speculative stock. Due to a limited supply of
quality premises, prime office rents remained at
the same level. Rents in prime office premises
in Belgrade range from €14 to €16/m²/month. If
we look at the wider area of Belgrade, rents are
around €11/m²/month, while in downtown they go
up to €16/m²/month. If we look at the Class B office
space, it ranges between €9 and €13/m²/month in
new Belgrade, while downtown they are between
€10 and €12/m²/month. In the other parts of the
city office space is in the range between €7 and
€11/m²/month.
Prime office yields in Belgrade are between 9-9,5%.
Rental levels remained stable during entire 2012 with
leasing activity increasing 16% compared to 2011.
10
Headline Office Rents in Belgrade (€/m²/month)
Location
Class A
New Belgrade
14 - 16
New Belgrade wider area
10 - 11
Downtown
14 - 16
Wider City Centre
/
Periphery
/
Class B
11 - 13
9 - 10
10 – 12
9 - 11
7-8
Source: Jones Lang LaSalle, November 2012
Market Practice for Office Lease
Serbia’s office market is bound to develop further.
Not only it is unsaturated, but with the development of
the economy and the EU accession process getting
momentum, more prime office locations will emerge.
Not only are the foreign companies setting up their local
branches, but also domestic companies, especially
from IT sector, are seeking new and modern facilities.
A new bridge across Danube River will also change
the face of downtown Belgrade, removing heavy
traffic from river banks, allowing the city to expand
towards rivers Danube and Sava. It expected that by
the end of 2014 thousands of square meters of land
along riverbanks will be available for investors.
Also, new highways connecting secondary cities
with main international corridors will bring to faster
development of these sights as well.
In proximity of Belgrade in the municipality of Indijia
Embassy Group from India is developing an IT park
Typical local market practice for office lease includes:
• 3 to 5 years lease length
• 3 years lease break
• Advance payment of monthly rent
• Annual indexation in line with European CPI
• €3/m2/month service charge
• Cash deposit or bank guarantee equal to 3 month rent
• Incentives in the form of 3 month rent free period,
fit-out contribution and additional parking space
on 50 hectares of land. With around 3,000,000 m²
of prime commercial, residential and retail space
developed around the world, Embassy Group is one
of the biggest real estate investor in Serbia. The first
phase of Embassy TechZone, Serbia will comprise
25,000 m² of LEED certified built up space expected to
be operational by the end of 2013. This business park
will have a total Developable Area of 250,000 m².
11
real estate in serbia
real estate in serbia
Economic recovery and EU accession will push forward new developments, few
of them already in the pipeline. As shown in the table, all of them are in Belgrade.
Second largest city in Serbia, Novi Sad, is still waiting for a prime shopping mall
and world famous brands.
Elsewhere in Serbia, the company Mercator S completed and opened its 20,000 m²
of GLA Center in the city of Krusevac (central Serbia), which besides hypermarket
hosts the brands such as Intersport, Tom Tailor, Deichmann, Tally Weijl, New
Yorker, Orsay, Beba Kids, Lisca, Takko, etc. In June 2012, the construction works
on the shopping center Vivo of 10,000 m² in Jagodina commenced.
Retail
At this time, probably the biggest opportunities in Serbia lie in the retail
market. Modern shopping malls can only be found in two cities in Serbia
while retail parks and outlets are in their infancy. Compared to other
neighboring countries, all forms of retail are yet to be developed. Belgrade,
as a 1.7 million capital has only around 100.000 m² of total retail area in
three modern shopping malls. City of Kragujevac has only one modern
shopping mall with 60.000 m² on population of around 200.000 people.
Major Projects in Pipeline
Shopping Center
Delta Planet
Višnjička Plaza
Delta Land
Ada Mall
Rajićeva Shopping Center
Skadarlija
Investor
Delta Real Estate
Plaza Centers
Delta Real Estate
GTC
Ashtrom International
Key Stone
Location
Autokomanda
Visljica
Palilula
Cukarica
City Centre
City Centre
Size m2 GLA
70,000
42,000
40,000
30,000
19,000
40,000
Source: CB Richard Ellis
Only few Shopping Centers
In past few years we saw development of only four
major shopping centers in Serbia. Three of them
are in Belgrade and one in central Serbia, in town of
Kragujevac.
According to JLL Serbia, with shopping center density
of 60 m² per 1,000 residents, Belgrade is the lowest
supplied city in the region. With only three modern
shopping centers in Belgrade, international brands
interested in the Serbian market cannot find sufficient
prime locations for their market penetration.
Existing Prime Shopping Centers in Serbia
Shopping Center
Investor
Ušće
MPC Properties
Delta City
Delta Real Estate
Mercator Center
Mercator
Plaza Center
Plaza Centers Group
Location
New Belgrade
New Belgrade
New Belgrade
Kragujevac
Size m² GLA
46 000
30 000
22 000
60 000
Delivery Date
2009
2007
2002/2012
2012
Source: CB Richard Ellis
Last shopping mall in Belgrade was opened in 2009,
while the only one outside Belgrade was opened in
2012. According to CBRE Serbia, during the entire year2012, the total shopping center stock of in Belgrade
remained unchanged, standing at 200,000 sq. m
of GLA, which includes all types of retail schemes:
western-style shopping centers, neighborhood malls,
department stores and secondary SC schemes
12
13
real estate in serbia
Outlets and Retail Parks
If we look at the secondary cities or suburbs of
major cities, retail parks and outlets are what
follow’s. Today, there are only three retail parks in
the country, one in the second largest city and the
other two in other secondary cities.
Israeli company BIG CEE opened the first 10,000 m² of
its 40,000 sq m large retail park in Novi Sad industrial
zone (including brands such as C&A, Deichmann,
Takko fashion, New Yorker and Home centar), while
Poseidon Group and Yu Kapital are developing the
first retail park in Sabac, Capitol Park, totaling 10,000
m², scheduled for opening in Spring 2013.
First and only outlet was opened in 2012 some
40 km from Belgrade. Black oak investments in
collaboration with GVA outlets opened first phase of
14
real estate in serbia
what is to be a 60 hectares and 100 million euro
project comprising many famous brands, a hotel,
large food court and many more.
Fashion industry is one of the fastest growing markets
and the Belgrade shoppers are brand aware. The
good value for money fashion brands have been
among the market’s strongest performers in 2012,
offering quality products at more acceptable prices.
The rental levels remained within the same price
range during the whole year.
Demand on prime locations for international brands
remains high in spite of the crisis. Due to lack of
space in secondary cities in Serbia, consumers from
all over the country spent substantially in Belgrade.
This has influenced the rents to stay stable and with
the economic recovery we can expect them to rise,
while their occupancy has been stable all along.
It is expected that substantial number of brands still
not in the market will enter the market, demanding
new and modern locations all over the country.
Retail Rents in Modern Premises in Belgrade (EUR/m²)
Location
<150 m²
>150 m²
Prime Shopping Centers
50-70
15-60
KnezMihailova Street
Up to 100
40-60
Terazije
45-70
30-40
Secondary high street
30-45
20-30
Source: Jones Lang LaSalle, November 2012
Existing Retail Parks in Serbia
Investor
Size m² GLA
Aviv Park
18,000
Delta Park
14,000
BIG Shopping Center
10,000
Location
Pančevo
Kragujevac
Novi Sad
Source: CB Richard Ellis
15
real estate in serbia
real estate in serbia
successstories
with high-tech telecommunication devices, offering
not only exceptional working environment, but also
facilities such as a restaurant, bar, storage, and
underground garage.
GTC
Mr. Robert Snow, Managing Director, GTC Serbia
Why did you decide to start a business in Serbia?
There are, of course, many reasons for entering a new market. Serbia presented both a challenge and an
opportunity for GTC. Firstly, as it is an emerging market, one of the principle reasons is that we perceived
a large gap in the real estate sector and a need for more offices, hotels, shopping malls, and quality midto-upper level residential buildings. Choosing to come here also reflected our confidence that Serbia is full
of promise-everything exists here in terms of opportunity, resources, and skilled workers for the country to
catch up with its more developed neighbors in a short time.
The world of business buildings is one which has
a very long-term vision of the future. The needs
of today are of critical importance, but those
of tomorrow are paramount. GTC has seen in
Belgrade a vision of a major European center
of commerce, business, industry, and transport.
Belgrade is in the very heart of the Balkans and at
the epicenter of all movement throughout South
East Europe. As the importance of Belgrade
grows, so too will its requirements for office space
and business parks.
What are your current and future projects in the
country?
GTC HOUSE is the first of GTC International’s
investment in Serbia. The building–completed
in April 2005–appeared as the long anticipated
building, offering Class A office facilities for leasing
to the leading international companies in Belgrade.
The modern building is fully equipped with all hightech facilities, sophisticated telecommunications,
and elegant double height entrance lobby, leading
into a covered central atrium.
Another of our office projects, 19Avenue consists of
two 1st class office buildings with a unique design of
20,000 sqm. The 19Avenue is completely equipped
16
Other GTC International’s projects include GTC
Square and Park Apartments. GTC Square is
the newest innovative office project located in
New Belgrade, with ample parking space, an
open interior courtyard overarched by translucent
catwalks, and an expansive and majestic atrium.
Park Apartments is a top of the range residential
building, introducing a new concept of living, with
200 apartments, 2-level underground parking,
retail stores, fitness center, 24-hour reception desk,
security services, maintenance services on the
spot, and a video interphone.
How do you perceive the business climate in
Serbia?
This is a very exciting time to be doing business
in Serbia. In the context of its transition, Serbia
has launched itself resolutely onto the path of
joining the rest of Europe in terms of its economy
and business. Foreign investment continues to
come into Serbia from across the spectrum of
industry sectors: banking, telecommunications,
and, naturally, construction. Investors continue to
view Serbia not only as an important investment
destination in itself, but as a gateway to the
region, as well. We at GTC are committed to
open and transparent business practices, and
have been very encouraged by the country’s
efforts to align itself with the best practices for
business development, as witnessed in the EU
and neighboring countries. In short, we are very
optimistic about the business climate in Serbia
and have already experienced many of the
benefits of investing here.
17
food industry in serbia
real estate in serbia
Aviv Arlon
Mr. Nir Saar, CEO, Serbian branch Aviv Arlon
Why did you decide to start a business in Serbia?
Aviv Arlon strongly believes in Serbia and foresees
bright future for the country on long term.
What are your current and future projects in the
country?
The company has already developed retail park in
Pancevo, Aviv Park Pancevo, with approximately
23,000 m2 NLA. We made strong efforts in
planning, developing and operating the retail park
which result with success. The plan is to enlarge
this project with new facilities in order to create
modern thriving city center.
In short time, we are planning to launch our second
project in Serbia, Aviv Park Beograd, with similar
retail concept. The plot is located in one of the
biggest municipalities in Belgrade - Zvezdara. As
well, the company has plans to enlarge operation in
Serbia developing another projects.
18
How do you perceive business climate in Serbia?
For us as a foreign company that entered Serbian
market few years ago it required some time to
learn and to adjust to the market. As any other
place, it has its advantages and disadvantages.
Generally speaking, we feel well in Serbia, we like
the place and believe we are getting along with its
environment. Definitely, Serbia has a lot of business
potential to be used.
aboutsiepa
www.siepa.gov.rs
SIEPA was established more than a decade ago and
entrusted with the mission to support foreign companies
seeking to set up or expand their presence in Serbia
and Serbian companies doing business abroad. Today,
a staff of nearly 50 multilingual employees handles
projects from and to all over the world.
offered by the government, we have supported
opening of more than 40 thousand new jobs
since the launch of the program in 2006. At the
same time, we have technically and financially
supported thousands of Serbian companies in
increasing their competiveness at global markets.
We provide professional services to companies
interested in setting up business operations in
Serbia, focusing on all relevant issues in their
decision making process. Our staff is ready
to offer information on the general investment
environment as well as targeted legal and
industry-specific advisory services. Our network
of contacts provides links to all levels of
government as well as private service providers.
By administering the financial incentives program
SIEPA’s work is widely recognized, with World Bank’s
MIGA ranking SIEPA among the top five IPAs of
developing and countries in transition topping the
list of our international acknowledgements. The list of
our clients includes Fiat, Benetton, Panasonic, Bosch
and many other global and regional industry leaders.
We invite you to contact our expert staff which is ready
to assist you in developing your business in Serbia.
Working with us is simple, easy, and still costs nothing.
19
Mr. Aleksandar Radulovic
SIEPA
FDI advisor
T: +381 11 3398 629
[email protected]
CB Richard Ellis Serbia
Jones Lang LaSalle
Airport City Belgrade
88b Omladinskih Brigada Street
11070 Belgrade, Serbia
Business Center Ušće
6 Mihaila Pupina Boulevard
11070 Belgrade, Serbia
www.cbre.rs
www.joneslanglasalle.rs
may2013
20
serbia
Serbia Investment and Export Promotion Agency
3, Vlajkoviceva St. 5th floor, 11000 Belgrade, Serbia
phone: +381 11 3398 550; fax: +381 11 3398 814
e-mail: [email protected]
www.siepa.gov.rs; www.doingbusinessinserbia.com
realestateopportunities
Download

serbia - Siepa