Source: AG Nekretnine | Thursday, 01.01.1970.| 12:54
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(AG Real Estate) State and Prospects of Retail Space Development in Belgrade

Goran Kuridža, genaral manager

EFG Property Services

Until recently, dominant investments of both local and foreign investors in Serbia were the ones placed in class A and class B office space. Today, shopping malls are prevailing with about 200,000 square meters of developed space and the announced investments in construction of another 600,000 square meters. Real estate sector and its development have, so far, showed that local investors hold majority percentage of the projects in the market, so that the foreign investments still have minority share in local market. It is the same with the retail development in this sector where local investors still hold primacy and have the leading role in that market segment. Because of everything mentioned above, it will be interesting to see how the current financial mortgage crisis will influence the further development of this sector in local market.

Expansion of shopping centers, as well as of all other investments, first started in Belgrade where first Mercator center with “wanna-be shopping center“ idea was opened in 2002. The success of that project is unmatched in Mercator’s history, which can be justified by the market’s and the consumers’ desire for new projects, that is, shopping centers, at that moment. Improvement of political and economic situation in the country, emergence of the growing number of trademarks in the market and the lack of appropriate space in the main pedestrian zones in Belgrade and other large cities in Serbia led to creation of suitable climate for shopping center investments. At the beginning of year 2005, several leading local investors announced commencement of works on the projects at over 250,000 square meters of gross surface.

Present Situation

From that moment until the end of year 2007, “pilot“ projects for development of shopping centers at 15,000 to 20,000 square meters were appearing in the market. “Immo Centar“ was opened in New Belgrade by company MPC, while Delta opened “Bazar“ in Novi Sad. In addition to these two projects, Mercator and Idea (part of Agrokor – Croatian supermarket chain) opened their supermarkets and hypermarkets in Belgrade and in several other cities in Serbia. Once again, all these projects brought something new to the market whose consumers, until that time, had to travel abroad in order to be able to shop “all in one place“. The offer at that time was still too insufficient and too incomplete for these retail space to be called shopping centers.

In addition to opening “ZIRA“ shoping center, company Verano and its partners from Greece won on the auction and became the owners of department store chain “RK Beograd“ in 2007. The reconstruction of RK Beograd is currently under way; thus making them into so called „Deprtment stores“. Part of them will be opened by the end of year 2008, while the rest will open their doors in the first half of year 2009. The project at 230,000 square meters of gross surface will, most certainly, satisfy the basic needs of the average consumers. Since department stores “Beograd“ are situated in the very centers of the majority of cities in Serbia, this aspect of the project will make it possible for the consumers from the provinces to buy trademarks that they used to be able to buy only in Belgrade.

In November 2007, “Delta Real Estate“ opened the first shopping center in Belgrade at the surface of about 85,000 square meters. The difference between that retail project and previous projects lies in its offer. Emphasis is placed on retail contents accompanied by entertainment and catering facilities, cinemas and contents for kids. Company MPC announced completion of works and opening of “Ušće Shopping Center“, a part of the multifunctional project in New Belgrade’s Block 16, at the end of March 2009. The shopping center will occupy the surface of about 140,000 square meters and it will introduce a great percentage of new trademarks. Also, the program that will be offered will enable the consumers to spend most of their leisure time in the shopping center.

Existing facilities - Belgrade





Mercator Center

New Belgrade

22, 400








8, 500



Bezanijska Kosa

9, 600


Idea Extra

New Belgrade

18, 000



New Belgrade



Delta City

New Belgrade

89, 000

Delta Real Estate

Zira Center


33, 000

Verano Group

TC Rodić

New Belgrade



IDEA Shopping Center

New Belgrade



Table 1: Existing – implemented retail projects in Belgrade

Plaza Center registered the company and opened offices in Belgrade in mid-2007. That is the company from Israel, one of the leading shopping center investors on the territory of southeast Europe, that bought the building of the Ministry of Internal Affairs in Kneza Miloša Street where a multifunctional project with A-class hotel contents, office space and shopping center will be developed. So far, Plaza Center has participated in realization of over 60 projects in southeast Europe, 22 of which in Hungary. In addition to the project in Kneza Miloša Street, this company announced realization of two more projects in Serbia – one in Kragujevac and another one in Belgrade. Shopping center at about 70,000 square meters in Kragujevac is already under construction and its opening is scheduled for the first quarter of year 2010. The project in Belgrade will occupy the surface of about 150,000 square meters, the construction works will start in the first quarter of year 2009 and it will be situated next to the Pančevo bridge in Višnjička Street. This shopping center should be opened at the beginning of year 2011.

Rental Fees and Prognoses

Lack of suitable space in pedestrian zones, insufficient size of retail space and increasing presence of foreign trademarks in Serbia lead to constant growth of rental fees. Average rental fee in shopping centers in Belgrade amounts to about 30 EUR/square meter on monthly basis, while the rent for some outlets exceeds 100 EUR/square meter per month. The rental fee for supermarkets ranges between 10 and 15 EUR per square meter on monthly basis. Depending on the location of the very space within the shopping center, as well as on its size, trademarks are to set aside between 30 and 90 EUR/square meter every month. When it comes to the space in pedestrian zones, growing presence of banks and increasing demand for retail space elevated rents to incredible 200 EUR/square meter on monthly basis.

The increase in retail space prices in Belgrade is followed by the growth of prices in other centers in Serbia, but not in the same proportion. Monthly rental fee for a space in Zmaj Jovina Street in Novi Sad can reach 120 EUR/square meter, while that growth was smaller in Niš and the monthly rent reached the price of 50 EUR per square meter.

After Fiat and Zastava signed the contract in Kragujevac, that city has become one of the leading investment destinations in Serbia, which is confirmed by the numerous announced projects. Few months ago Mercator opened a new facility, Plaza Center started previously announced development of shopping center at 70,000 square meters, Holiday Inn announced realization of a new hotel, IKEA is collecting information on the investment opportunities in Kragujevac,....

Shopping centers – under construction -Belgrade





Usce SC

New Belgrade



Dorcol Marina development

City center

35, 000


Immo center Cerak


25, 000







Throughout the city



Visnjicka Plaza



Plaza Centers

Delta Power


35 000

Delta Real Estate

Delta Planet


310 000

Delta Real Estate

TQ Life


42 000



Belgrade, Medak

8 000

Yu Kapital

B Brdo



Yu Kapital

Table 2: Announced retail projects in Belgrade

With all announced projects and all new investors in the market, the size of shopping center space in Serbia should be increased by over 800,000 square meters within the next five years.

In addition to investments in development of shopping centers, the money should also be spent on introduction of new standards and “know how“ realization of the shopping center operations. Foreign experts, architects, developers and facility managers are the initiators. Tenant mix, their organization, introduction of new trademarks and regular running of shopping center business are all parts of a comprehensive and complex process. This process requires investments and the fact that should not be neglected is that a shopping center should operate in the fifth year the same as it operated in its first year of existence. If the business results drop and the tenants start leaving, it is very difficult to put the shopping center back to its feet.

Another thing that the investors should bear in mind is to avoid the situations similar to the ones in Hungary or Czech Republic where inadequate difference in offers, identical surfaces and contents, as well as non-quality running of both business and shopping centers, resulted in the fact that confrontation with competition, which is going to be very strong in the future, was extremely painful and gave bad results. It can be said that, because of that, large number of such spaces have already been closed, which should represent a serious warning for retail space developers in our country.

Influence of Mortgage Crisis on Serbia

The majority of shopping center investors in Serbia announced development of new centers at new locations both in Belgrade and in the provinces. Another thing that was also for sure was that year 2009 and year 2010 would be the years when big global investors were going to take the piece of this market segment in Serbia.

What is certain now is that the current crisis, caused by the crash of mortgage banking, is going to influence investments in our country as well. Stopping of the project finance and transfer to short/long-term loans with unfavorable interest rates will make investors give up certain projects or increase the rents. Project business plans used to be made based on the project finance terms with the level of rents that are necessary for the investments to be profitable.

Also, the whole situation should warn the investors who already started realization of their projects to pay attention to the tenants with whom they already signed the lease agreements, especially if they are the companies that are active/present in the neighboring markets and whose activities are financed by banks. There is a very high probability recently that these companies may experience the problem of liquidity and start breaking the contracts. That can represent a serious problem for the investor because these companies are anchors that gather large number of small tenants whose business results depend on the consumers attracted by the anchors.

All this will have influence on minor investors, the new investors who can not afford to cover the difference caused by financial problems or the investors who will not be trusted by the banks.

This situation will not influence the investors who are already present in the market, the investors who have good portfolio as the guarantee of successful operations and big foreign investors to stop realization of their projects, but only to postpone completion or beginning of realization for couple of months, until they find the best possible solution to complete the entire financial structure of the projects.


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