What are the biggest challenges for investors in Serbia?
Israeli company Afi Europe stands behind the Airport City project, and it has also co-invested with Shikun&Binui Group in the Belgrade condominium Central Garden.
- Legal procedures pose one of the biggest challenges for us. Given that Serbia is a country in transition that works on preparations for the membership in the European Union, laws are changing frequently. It is necessary to complete the transition period smoothly in order not to block investments - Afi Europe Serbia CEO Adir El Al explains.
He adds that exclusively those investors who know how to adapt to changes can succeed in Serbia.
Evangelos Mantzavinotos, the development director at Lamda Development, shares the opinion that legislation is one of the biggest obstacles to doing business in Serbia.
This Greek investor has been trying for many years to start the construction of multifunctional complex on the site of former Beko factory, beneath Kalemegdan fortress. The company acquired that real estate in 2007 for about EUR 60 million, but the start of construction was hindered by a court dispute. Mantzavinotos points out that it was extremely difficult to acquire permits, but he adds that they got the green light in 2015 to start the work on the project. He also notes that Lamda Development plans to commence the implementation of this project, valued at EUR 200 million, this year.
- It took us eight years to get to this point. The main problem in Serbia is a lack of legal system. My advice is to fix the legislation by making laws non-contradictory - Mantzavinotos stresses.
Aside from an acquisition by Atterbury Europe, which acquired a stake in MPC Properties, there were no major transactions in the real estate market in Serbia last year. This too is one of the challenges for foreign investors whose operations are based on exit strategy.
- GTC is building to sell. A lack of such activity in the market of Serbia poses a problem. It is necessary to introduce a better project appraisal system - says Pedja Petronijevic.
Maja Sahbaz of Ernst&Young points out that each project must entail an exit strategy as well.
Real estate development trends
According to Chief City Planner Milutin Folic, several big projects will be implemented in 2016.
- The Belgrade Master Plan will be adopted by the end of March 2016. We will be working on the regeneration of pedestrian zones in the city center, organization of city markets, lighting of public facilities, integral notification system for pedestrians... Slavija Square and few other central city squares will be regenerated in 2016, while 2017 will see the introduction of bike sharing system - said Folic.
These works are all part of the IME project (Identity, Mobility, Ecology) of the City of Belgrade, which aims to improve the tourist competitiveness of the capital, among other things.
New investments in 2016
As it was announced by TGI Group International CEO Symeon Tsomokos, some new companies interested in investing Serbia are going to enter our country over the next few months.
He underlined that he expected the development of the domestic real estate market to continue, adding that there were no funds for projects, which was the reason why TGI Group had organized the First Serbian Conference on Real Estate Development in cooperation with the Embassy of Israel.
Mr. Tsomokos also said that his company planned to bring financial organizations from Europe in order to provide the funding for new projects in Serbia.