Investments in Environmental Projects and Industrial Centers Leading Trend in Real Estate

Source: eKapija Thursday, 25.03.2021. 09:18
Illustration (Photo: Shutterstock)Illustration
Investments in environmental projects are measured in billions, and half of those investments are made in Europe. This segment should therefore attract investors’ attention, not just as a job opportunity, but also as an opportunity for a greener environment.

This is one of the conclusions from the Sixth Serbian Real Estate & Infrastructure Development Conference, which was held online.

Milan Elezovic, a managing director at Credit Suisse, pointed out that investors counted more and more on our region, which, as he said, “is on everyone’s radar”. The advantages of Belgrade were also cited by Michael Roskelly, CEO of Cadenza Principal Finance, who said that it was a market with development possibilities, that economic transformations and reforms, which attract investors, were visible.

– Belgrade is the capital of the region. The construction in this city is an encouragement for investors, because the market absorbs it. On the other hand, the challenge is how to find a good location at a favorable price, but also how to pick the contractor. There’s also the financing risk, as well as legal and political challenges, which is why we must convince investors that they are able to overcome them – he added.

Stefano Maio, the business development manager at Bechtel Civil Infrastructure, added that the advantages of Serbia were the political security, the increasing GDP, the good credit rating, the bilingual populace, smart engineers, quality workforce and the quick issuing of construction permits.

Vojkan Brankovic, founder and CEO of Apeiron, headquartered in Great Britain, especially highlighted southeast Serbia, talking about solar and wind energy. He noted that support was sought for such projects, as there’s a perspective in sustainable development.

– The problem is that it’s difficult to identify enough adequate land, owned by the state or the local self-government. It is necessary to work with big institutional partners – he said and added that he expected that another few years would need to pass, due to the risks attached to this region.

Ana Lukovic, an independent attorney at Karanovic & Partners, said that the real estate market was dynamic and that digitization would be important for the sector in the future.

Trends and questions related to financing

The apartment construction market recorded a turnover of EUR 2 billion last year. In addition to the real estate market, the infrastructure market is growing as well, and the prices have jumped drastically, said Ervin Pasanovic, the general manager of Adventis Real Estate, who added that investments were not expected to decrease.

Vasilije Jaukovic, in charge of property and tourism sector at the EBRD, pointed out that the pandemic had accelerated the inevitable trends and added that the development of industrial zones was one of them. However, the challenge is how to find satisfactory tenants.

– When it comes to office space, there are no big shifts, and new projects are expected to slow down this year. I believe that the “hybrid” approach of working from home and from the office will continue – he said.

He also believes the green project market is experiencing an expansion.

Vladimir Veselinovic, the head of real estate finance at UniCredit Bank Srbija, noted that the completed office buildings had a lower degree of occupancy, but that no long-term problems were expected.

– A stable growth of residential building is expected. The prices are stable, and finance parameters are similar throughout the region.

Infrastructure important for inciting investments (Photo: Luis Viegas/Shutterstock)Infrastructure important for inciting investments

The Infrastructure is a strong mechanism for achieving economic growth, according to Vladislav Cvetkovic, a director at PwC Srbija, who said that the infrastructure stimulated investments, but also goals of sustainable development.

– We have two goals: to fill the gaps in infrastructure and to go for investments that can meet the goals of sustainable development. The green agenda will be important for attracting investors – he pointed out.

He noted that these topics would determine the direction of the investments and that there should be an effort to make oneself more attractive for private money, that is, private investments.

Commercial projects, logistics and retail

The financial situation is quite good, the interest rate is at a low level, the values of real estate are stable, and in the field of logistics, they are growing, according to Nebojsa Nesovanovic, a director at CBRE.

– The biggest losers are hotels, shopping malls and office space – he added.

He pointed out that the residential real estate market was increasingly attractive and that those investments were seen as capital investments. He also said that investments in shopping malls were expected to make a comeback.

He said that it was necessary to pay attention to clients, to research, to be proactive and that the real estate sector was entering a digital era.

– The office market is changing and Covid has accelerated this process. Office space will have to go through changes, especially the kind of office space that is less attractive for lease – Nesovanovic said.

Roman Klott, the managing director of Atrium, noted that the market would change, but that offices would not become superfluous.

– In bigger cities, companies will have different offices, that is to say, not everything will be in one place. This is an opportunity for service companies, which provide cleaning and disinfection services, to expand their business, but also for those who provide IT services – Klott believes.

Ivan Gazdic, the president of the Real Estate Committee at the Foreign Investors Council, pointed to the risk that the possibility of a state of emergency posed for investments and how it affected consumers’ behavior. He added that attention should be focused on retail parks and logistics and that banks would not be interested in investments in office space.

– What is needed is flexibility between the seller and the buyer. Also, we are moving toward green construction and ecological principles, which will be more attractive for financing – he added.

Milica Mitrovic of GTC S.A. pointed out that companies were increasingly looking to oblige them selves when it comes to renting space and that such decisions were made more quickly than at the beginning of the pandemic.

– The rent rate has dropped slightly, but the rent collection is excellent – she pointed out.

Aleksandra Kekic
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