Summing up the results from the
previous and comparing them with the current year, we arrive to the conclusion
that certain segments of the real estate market in Serbia, have not suffered great
disturbances in spite of the anticipations. Indeed, apartment sale is
considerably reduced, office space market has recorded only a few significant
transactions and turnover of shopping centers is below expectations.
On the other hand, one of all segments
is the least hit by the global events at the local real estate market. It is
’’street’’ retail!
The real estate market, in Serbia
generally, is still in its initial phase of development. Basically, Serbian
real estate market is unsaturated and, as such, has great potentials. On the
other hand, however, it is still underdeveloped and passes through a period of
’’teething troubles’’. Everything has its value which today, especially at the
time of the capital crisis, multiplies the problems and additionally burdens all
assets that the real estate market in Serbia has and offers to the
interested investors.
When it comes to the
real estate market in its specialized retail segment, greater development
advances in relation to other segments are apparent. Standards defined and
prescribed in the world slowly determine certain rules at the domestic market
as well. Along with construction of new shopping centers whose activities in
the field of further development have been reduced for a while, a distinct specialization
and rise of service quality in this operation is obvious. The remainder of
disposable and available potentials in the domestic retail market is being ’’pressed
down’’ in order to ’’make the most out of it’’.
Therefore, ’’street’’
retail whose operation in Belgrade survived a
huge impact after the opening of two grand shopping centers – Delta City
in 2007 and Ušće Shopping Centre in spring this year - is slowly restoring
business interest. In this case, the interested retailers are assessed doubly:
as new potential tenants and as ‘new-old’ entrepreneurs whose business will inspire
‘new life’ in the pedestrian and shopping zones of downtown Belgrade
and other cities of Serbia.
Street Retail
The last trimester 2009 points
out that the very street retail recorded the greatest number of transactions
and activities either in renting or in purchase. Once more it is proved that
retailers’ point of support in expansion of their retail network reclines on
the streets and the habit of a Serbian consumer to buy in the ’open’. The
unavoidable strategy of most retailers, either domestic, foreign who have already
taken part in the market or those who are only entering the Serbian market, is activity
in large market centers, smaller Community Malls and department store chains.
In the first place, Robne kuće Beograd, which
provide a perfect infrastructure for creation and expansion of the network at
the Serbian market. Still, street retail occupies a special place and right
now, in the years of the world crisis, it finds full play.
Several reasons that explain
everything should be sought in the fact that this market in Serbia, Belgrade,
has transformed from the renters’ market into the tenants’ market. The crisis affects
the business and turnover of the tenants which reflects on the readiness of
retailers to pay high rents. Likewise, enlargement of the space offer,
restrictive strategies that rule out further expansion and rent of new stores,
result in rental fees drop. Furthermore, terms and conditions for taking retail
space on lease predominantly in regard of technical furnishing and the level of
works performed in the stores have changed. The already mentioned turnover drop
has caused vacating a great number of street stores at attractive locations due
to tenants’ incapability to pay rental fees which were acceptable earlier but
under different market circumstances. Transformation
of the market into the tenants’ market, which enables a significantly more favorable
position of the tenants when it comes to rates and conditions, selection and vacating
the most attractive street stores, was caused by the global crisis and turnover
drop.
The odds are stack in favor of
great retailers and brands who grab an opportunity to occupy good locations in Belgrade and other bigger
Serbian cities. Those whose strategy is not based on drastic expenditures cut
and freezing or balancing their regular activities to minimum but on an
aggressive approach and attack on the market segments abandoned by the
competition, those who consider this time as favorable for investments and thus
strengthen their long-term positions and those who see their good opportunity
in the dormancy and inactivity of their competition – they dominate the market
and build strong foundations for future development and survival after the
years of crisis. Numerous new stores, new brands in the streets are the best
illustration that regardless of the bad situation and low turnover at the
moment the stores in the most attractive and busiest streets (which are an
expense at the moment) are a part of the long-term development plan, a signal
to the competition and a future potential.
Anticipations and forecasts
The forthcoming period at the
street stores market is anticipated to be featured by similar or identical
situation. The tenants who, after a hard year, look forward to the month of
December and huge turnovers to which they were accustomed in the previous years
(primarily in 2006, 2007, 2008), will face the turnover less by as much as 50%
than in the aforementioned years. In addition to the stated factors featured by
decrease of citizens’ purchase power, it will be also affected by the new
non-visas regime enabling Serbian citizens to travel and go shopping under much
more convenient conditions at some other European locations. It means that at
the street retail market a great number of stores at attractive locations will
be vacated in the first three months 2010 and available to great retailers.
author : Nikola Radović, General Manager
Rank properties Belgrade
nikolar@rank.rs
www.rank.rs
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