The long awaited entry of new commercial real estate investors is finally over as a number of recent large transactions have resulted in a new group of investors entering Serbia.
At the end of 2015 JLL advised the South African fund Atterbury on their one-third stake purchase of MPC Holdings which holds the Usce Shopping Center within its portfolio. Andrew Peirson, Managing Director at JLL commented ‘We first met Atterbury in a neighbouring country and convinced them to come to Serbia to see the market and the opportunities it presented. As a retail developer we felt their plans for European expansion fitted perfectly with the lack of retail supply in Serbia, and clearly their join up with MPC to go forward and develop together is proof of this appetite.
As has been well documented recently, another South African investor, this time a JV between Hyprop and Homestead, recently purchased the Delta City Shopping Centers in both Belgrade and Podgorica for a total of €202.7 million. JLL acted for Delta Real Estate on the transaction as exclusive sales agent, and Peirson added ‘Again we first came across the purchaser when they were looking elsewhere in Central & Eastern Europe, this time in Poland, and convinced them to visit Serbia and Montenegro and see the quality of the assets in both markets.
Uros Grujic, Head of Capital Markets - SEE at JLL commented ‘Both cases are further proof that international real estate advisors, of which JLL is the largest in Serbia and in the SEE region in general, can provide huge added value to the real estate market and economy as a whole by helping to attract new investors the market desperately needs. Before these transactions we had never witnessed anything of this scale before, and the Delta City transaction is the largest single asset deal in this region for the past 5 years. The issue now however is the lack of assets for investors to purchase and the need for more development’.
‘This is again where these new investors can help. The South African fund NEPI has been the largest investor in neighbouring Romania for years, but they develop as well as purchase existing assets. What we need to see now is this new investor group also looking at the potential of Serbia as a place to develop and not only buy income producing assets. We need to see more developers enter the market and reduce the reliance on only a handful of companies, as has been the case over the past 10 years’.
‘We need to keep the momentum up’ says Peirson. ‘Serbia is competing with markets such as Croatia, Bulgaria, Romania and now even Hungary when it comes to attracting real estate investors. It is generally accepted that Serbia by far has more potential going forward than its competitors but potential exists simply because investment has, for one reason or another, been held back for years. That said, the future certainly looks brighter than 12 months ago and real estate investors are now taking note of what Serbia can offer’.