Further developments in New Belgrade expected in 2017
The end of 2016 is marked by the strong construction activity and completions of several modern office projects that added nearly 52,000 m² to the Belgrade office stock. Five office buildings were added to the market out of which four were speculative, leaving total modern office stock of Grade A and B at 665,000 m², a 10% increase y-o-y. As a result the downward trend in the vacancy rate over the previous years has been reversed. In 2016, the vacancy rate increased slightly to 7% for Grade A and B office buildings, yet remaining well below the record levels of 2010 and 2011 (above 20%). Further developments are underway for 2017 predominantly in new Belgrade.
The office market was mainly driven by relocation deals, followed by new occupations. The IT sector took the greatest share in demand. The average deal size during 2016 stood at about 700 m².
Rental levels remained stable in 2016. Prime rents for Grade A office buildings in CBD zone vary from €180 to €204/m²/year, while Grade B recorded rental levels between €108 and €144/m²/year.
The only significant investment deal occurred in the retail sector
2016 did not record any office investment deal. Indeed, commercial real estate investment activity was particularly flat with only one investment deal recorded in 2016. This was the acquisition for €128 m. of the modern shopping centre Delta City in Belgrade by the South African REIT Hyprop Investments and Homestead Group Holdings.