ECONOMY

Serb property boom

BELGRADE – The Serbian capital is a city that is developing and modernizing quickly without compromising its history or a quality of life characterized by its distinctive big rivers, the Danube and Sava, and its green space. Business parks, office blocks, shopping centers, supermarkets and modern housing complexes in the city’s suburbs coexist with the well-preserved buildings and monuments. Serbia’s economic progress in the last few years, through the reforms and privatization program of the Serbian government, is obvious. Visitors to the Balkan nation cannot easily see markings of the travails the country has experienced in the last 15 years. There are, however, a few telltale signs, such as the remnants of four government buildings in the city center bombed by NATO in 1999. Still, despite these lingering reminders, Serbia is now an emerging market with excellent prospects – at least according to the representatives of several foreign companies active in Belgrade. Kathimerini spoke to them on the sidelines of a meeting held by the Serbia Investment and Export Promotion Agency (SIEPA) and funded by the World Bank. Greek companies have a strong presence in Serbia. Banks have spearheaded the effort there, making Greece the biggest foreign investor in the country for 2005, with investments of 238 million euros. Germany was the second-biggest foreign investor, putting in 200 million euros, followed by Slovenia (174 million euros) and Austria (138 million euros). The high interest rates allow significant profit margins for Greek banks operating in Serbia (Alpha Bank, National Bank of Greece, Piraeus Bank and EFG Eurobank). The Greek presence is bolstered further by companies such as Titan, Coca-Cola HBC and the Veropoulos supermarket chain. Aside from the banking sector, the most interesting domain in the Belgrade market nowadays is property development. Development companies from Europe and Israel (a big force in the local commercial property market) are attracted to areas to this revitalized Belgrade. They like New Belgrade (the new business center being created) as well as the redevelopment of riverside areas and the housing boom in the area. Typical examples of that are the Airport City Belgrade business park, being developed at New Belgrade by Israeli company Africa Israel Investments, the shopping center under construction by Alsthrom at Knez Mihailova, and the creation of commercial and recreation spaces at the Dorcol marina by Engel Group, also from Israel. Another business park is being developed at New Belgrade by Mahler Project, while at Block 26, very close to Airport City, another business park is being created by Austria’s GRAWE. Dutch company MPC also has a strong presence, having constructed a modern 25-story office tower that is the highest in Belgrade, as does Austria’s Durst, with possibly the most beautiful office building in the city, Atrium Belgrade, measuring 7,200 square meters. The market of mixed-use developments is enjoying significant investment, too, as they combine office spaces, shops and entertainment activities, and sometimes houses. One of the most important projects of this type is the improvement of the railway station of Prokop by Hungary’s TriGranit, which in its first stage will create 128,000 square meters of commercial and office space, the 19a Avenue by GTC at New Belgrade. Greek developers As far as Greek property development companies are concerned, they are carefully examining the progress of the Serbian property market, which due to the high cost of land does not allow for bad investment choices. EFG Eurobank Properties and Lamda Development currently have the strongest presence. The former satisfies the housing needs of EFG Eurobank, provides consultative and assessment services to third parties and seeks the appropriate income properties, both in the city center and at New Belgrade, to realize its first investment in Serbia. Lamda Development is currently examining investment plans of 320 million euros. They concern two projects of mixed use at New Belgrade, with a 50 percent and a 25 percent stake respectively, and another mixed-use project in the Serbian capital with a 50 percent participation.