The Serbian retail space market is dominated by shopping centers with a 64 percent share, but the interest of investors in the construction of retail parks, throughout the region, has not been decreasing for several years, so they are expected to increase their market share in Serbia from today’s 36 percent.
“In the previous three years, the total offer of retail space in Belgrade increased by about 150,000 new square meters, primarily through the opening of the BW Gallery and BEO Shopping Center facilities. Such developments on the market have positioned Belgrade on a par with other regional cities of similar size, and in accordingly, it was expected that investors would focus on the further development of retail space in in the format of retail parks, in cities outside of Belgrade, all over the country”, says Ivana Maksimović, Head of Property Management and Retail SEE at CBRE.
However, this does not mean that retail parks will “beat” shopping centers when it comes to market share.
“Considering the announced projects and those whose construction is underway, it is evident that the share of retail parks in the total offer of retail space will increase in the coming period, but shopping centers, at least in our market, will retain primacy,” Maksimović assessed.
Tenants are increasingly demanding, rents are rising
“It causally influenced a longer decision-making process, slowed down negotiations, and highlighted the caution of tenants in terms of managing the risks of their own business and the sustainability of the location they choose.”
When it comes to rents, CBRE data indicate their slight increase, as a consequence of the high rate of inflation that was accompanied by the indexation of contracted rents.
“According to the data for the second quarter of 2023, the average price within shopping centers remained stable at the level of 26 to 29 euros per square meter on a monthly basis. The stable situation also remained when we talk about retail parks, where average prices per square meter range from 9 to 12 euros. However, due to inflation and price jumps, the pressure is still evident through the growth of operating costs,” Maksimović said.
