Serbia : Belgrade office market2015 overview
- The modern office stock should increase in 2016 following significant office completions in New Belgrade
Further developments in New Belgrade CBD
At the end of 2015, total modern office stock totaled 600,000 m², of which Class A amounted to 63% and Class B to 37%. Stock is expected to increase with the development of the New Belgrade CBD zone with more than 90,000 m² of buildings throughout 2016. These include developments such as the Fortyone office complex that totals of 27,000 m². The first phase was completed in October 2015 for 10,000 m² and the second phase of 8,000 m² is under construction and due in Q3 2016.
Market activity was dominated by the renewal of existing contracts, whilst new leases were mainly motivated by relocations. IT and Banking sectors remained the main drivers of demand growth in the office real estate market.
Rapid absorption of modern office space and limited delivery of new office completions resulted in continual downward trend in the vacancy rate, reaching a level of 5% at the end 2015. Due to the announced pipeline projects, a slight increase in the vacancy rate is expected in the next two years.
During 2015, rental values remained stable with prime asking rents for Class A office buildings in CBD zone in the range of €15.0 to €17.0/m²/month, while Class B stood at € 11.0 to €13.0/m²/month.
Estimated prime office yields decreased ranging at levels of 8.50% - 8.75%.