Retail Market Trends

Supply

The most concentrated retail concepts are still to be found along high-street locations and within the expanding network of retail warehousing. Numerous shopping malls are under construction or in the planning phase. The city of Belgrade continues to be the main investment destination, followed by the second largest city ̶ Novi Sad.

 

Shopping Malls

In 2006, the supply of modern shopping malls in Serbia remained limited with less than 30,000 sqm of leasable space existing in the capital. Over the past year, tha market situation improved slightly with the opening of two shopping malls ̶ one in Belgrade and another one in Novi Sad. Conserning other parts of Serbia, only major cities feature shopping centers, which are mostly of smaller sizes and out-of-date.

In 2007 a new mall, DeltaCity 67, opened and thereby added 30,000 sqm of gross leasable area to the capital. In Novi Sad two shopping amlls are in the pipeline to bring approximately 45,000 sqm of GLA to the city. In the mid term, development is expected to continue at a rising pace with various projects scheduled for opening, predominantly in the capital city. New projects will be located in both downtown and suburban locations.

High Street

High streets of Serbian major cities are still the  most desired way of entering the market. The biggest expansion of today´s high street market is coming from international banks. Among the international fashion retailers, Zara entered the Belgrade and Novi Sad markets in 2006. In the coming years , high streets of Belgrade are expected to experience an increase in retail opportunities because of the asset disposal of serveral state-owned companies.

Retail Warehousing

The retail warehousing market in Serbia developed rapidly and was among the best performing market sectors in 2006. The existing intrenational retailers Metro (Germany), Agrokor (Croatia), Mercator and Merkur (Slovenia), Interex (france), and Veropoulus (Greece) steadily expand their networks.

In 2006 the focus extended beyond Belgrade to other large Serbian centers, such as Nis, Novi Sad, and Kragujevac. At the end of 2006, the caital saw two major openings- Sebian Delta launched the largets cash-and-carry ficility in the Balkans (18,000 sqm on the route towards the Belgrade Airport) while Croatian Idea opened another hypermarket of 12,500 sqm in New Belgrade.

Two major events that marked 2006 are the merger between Delta and Agrokor, which is due to conclude in 2009 and is to enable further investment in local and regional markets, and the aquisition of local Rodic company by Slovenian Mercator.

 

Demand

As Serbias macroeconomic recovery maintains a strong pace, accompanied by increasing purchasing power of the population, the country is experiencing rising interest from international retailers and a ring interest from international retailers and a consequently higher level of market activities. New and existing retailers are expressing a strong interest in both high street locations and new shopping centers.

The traditional high-street areas in Serbian major cities have witnessed demand primarily from well-known chains of fashion goods, fast food restaurants, and financial institutions, The increasing demand is expected to continue through the following period.

Rental Rates

The limited availability of space in the Serbian market coupled with raising interest from various retailers is keeping retal rates high for both high streets and shopping centers. In light of present and anticipated market conditions, there is a low probability of a decline of renatl rates in the next few years. While the retail rents for the top capital locations reach levels between €50-150/sqm/month, secon dary locations along the most prominent boulevards cost between €20-60sqm/month.

(Source: Colliers International, Serbia)