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Office Space Market

Serbia offers diversified office space options that you may choose from and start your business immediately.   

 

SUPPLY

The total stock of Class A and B office space increased by 76,100 sqm, despite the construction slowdown experienced by the Belgrade office market during 2010. By the end of year, it stood at 658,419 sqm, where Class A stock comprised 414,503 sqm GLA, an increase of 22.5% compared to 2009. The total stock of Class B space remained the same as in 2009: 243,916 sqm. New Class A buildings were added to the market in the second half of 2010.

DEMAND

Encouraged by somewhat lower rental levels, numerous companies started searching for new business premises in 2010. These tenants came from a range of business sectors including finance and insurance, engineering, architecture and construction; IT, media and publishing and retailing. Local and foreign government institutions, as well as embassies were also active players in the market. In terms of deal size, the majority of demand (70% of requests) was for premises up to 500 sqm. The remaining 30% of requests were for larger footplates of 1,000 sqm and above.

VACANCY/AVAILABILITY

The vacancy rate increased to 24,24% by the end of 2010, which equated to 159,633 sqm. Class A vacancy also increased compared to the previous year, driven in large part by additions to stock, while Class B vacancy decreased. By type, there was 105,222 sqm of vacant Class A, with a vacancy rate of 25.4%. Class B vacant space accounted for 54,111 sqm , with a vacancy rate of 22.3%.

RENTS

Although rents for all types of office space experienced a decrease, there was a greater fall in Class A rents, due to the higher level of new additions. Prime headline rents by year-end fell to €16 per sqm. In general, headline rents for Class A space vary from €13 to €16 sqm/pcm. Class B rents remained steady at ca. €13.5 sqm/pcm. In cases where the whole building is offered for rent, with sizes ranging from 1,000 to 2,500 sqm, prime headline rents range from €10 to €12 sqm/pcm.

PROGNOSIS

Over 50,000 sqm of space will be delivered to the market in 2011. This primarily concerns Class A stock, delivered by a few key developers. The buildings expected to have a big impact on the market are the B23 office building by Verano, comprising of 35,000 sqm including state of the art systems. Another interesting new project is Tri lista Duvana by MPC Holding (8,200 sqm GLA) in one of the top business locations in Belgrade. This will create significant competition among developers/owners for grade A tenants, putting further downward pressure on class A rents.

The Belgrade office market report is based on the data provided by Colliers Serbia.

Apart from the capital, the two largest cities also offer business friendly atmosphere with good quality spaces and high vacancy rates. For a thorough overview of the market for Class A and Class B office space in Novi Sad and for Class A office space in Nis please review related publications.