Office Market Trends

Supply

The total supply of speculative office space in Belgrade has increased by 40% since the end of 2005, bringing total speculative office  inventory of Class A and Class B office space to nearly 270, 000 sqm. Compared to the Class B market segment, the growth in Class A inventory was significantly higher in 2006 and currently totals around 145,000 sqm.

Urban (re)development in the downtown city area remains on a low side with New Belgrade being the primary chise for new office development. During the past year, New Belgrade alone accounted for almost 90% of New Class A and 80% of Class B developments.

Vacancy Rates

The Class A vacancy rate for multi-tenant/speculatve developments is 9%, while the overall Class A and B vacancy rate in Belgrade is 11.7%. The slight increase in 2006 comopared to the prevoius year is the result of several lease expirations and the continuing increase in overall market inventory. Available ClassA and B office space for rent at the end of the year totaled slightly over 20,000 sqm.

Demand

During the past year, demand for high-quality office space was driven by financial and legal services, telecommunication and IT companies, along with the expansion and market positioning of existing banks. Demand for small and medium size premises remains robust.

Rental Rates

The actual average weighted rent for Class A office space recorded a 7.5% decrease over tha last year. The most expensive Class A space in the city is still in the central portion of New Belgrade, where the average net rent is €22/sqm/month. Class B office buildnings command rents between €11 and 17/sqm/month, depending on the building age, location, parking availability,  and other amenities. Converted space averages €10/ sqm/month.

(Source: Colliers International, Serbia)