The development of the I&L market in Serbia is largely connected with foreign investments which are showing positive trends as Serbia attracted 40% more FDI in 2019 in comparison with 2018.
The impact of COVID-19 on the I&L market in Serbia is yet to be estimated as this property type appears to be the least prone to the effects of the crisis. Logistics centres seem to suffer the least, as constant demand for storage services, long-term lease agreements and the low number of workers contribute to the stability of this property type. On the other hand, production facilities have had to decrease their business activities, as a lot more risk and uncertainty is related to organizations with higher numbers of blue-collar workers.
Supply, demand & vacancy
Stock & vacancy evolution in Serbia
Stock & vacancy evolution in Belgrade
It is estimated that at the end of H1 2020, the modern I&L stock in Serbia was ca. 5 million m2 , with an annual increase of approximately 400,000 m2 since 2008. More than 20% of the total stock is located in Belgrade, the capital city of Serbia. During the first six months of 2020, developers in Serbia completed approximately 200,000 m2 of new warehouse space (50,000 m2 in Belgrade). At the end of June 2020, there were a further 100,000 m² of warehouse space under construction. Demand for modern industrial space is mostly generated by the automotive sector, logistics operators, as well as by the e-commerce sector.
The vacancy rate is stable and since the beginning of 2018, ranges between 2-3% in Belgrade, as well as in the whole country.
Rental rates & lease conditions
In H1 2020, prime rental rates in Serbia ranged between EUR 2.5-5.5/m2 /month, with the highest levels being recorded in Belgrade (EUR 4.5-5.5/m2 /month).
Average lease lengths in Serbia are 3-5 years, in case of logistics/warehousing and 5-10 years for production/manufacturing. Developer’s offer some incentives to tenants, which vary between 1-2 months of rent-free per year of lease.
As more than 400,000 m2 of modern industrial and warehouse space is in the pipeline, it is expected that the Serbian industrial & logistics market will continue to grow in the long-term.
The most notable logistics facilities in the pipeline are in Novi Banovci (ca. 65,000 m2 ) by CTP Invest in and in Simanovci (ca. 50,000 m2 ) by KLP.
Top lease agreements
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