2012 Global Market report - NAI Global

Belgrade, Serbia
Johannesburg, South Africa
Contact
NAI Atrium
+ 381 11 2205880
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
34,116
3.0%
$41.31
$5,573.62
9.9%
18.4%
N/A
7.411
The economy of Serbia is largely driven by the following
sectors; processing of base metals, food processing,
machinery and chemical processing. As of 2012, the
automobile industry will become an important industry
sector, as FIAT Group Automobiles will start production of
cars in its recently opened factory in Serbia. The Statistical
Office of the Republic of Serbia announced that industrial
production recovered slightly from January to August 2011
with an increase of 3%.
Belgrade modern office stock in 2011 remains 460,000 SM
(NRA), as no new office buildings were completed. The level
of office take-up is stable, resulting in a positive net absorption
of office space and gradual decrease of vacancy that
currently amounts to approximately 25%. The prime rental
level has stabilized at EUR 16/SM/month for Class A office
space and it can be expected that rental levels will remain
stable in the next two to three years, as new office properties
should enter the market in 2012 and 2013.
Due to the financial crisis, consumption power in Serbia has
dropped by approximately 30%, negatively affecting the
retail market with turnovers in all types of retail properties.
Only one neighborhood shopping center was opened in
2011, but next year a modern shopping center of 30,000
SM (GLA) should be completed in Belgrade, topped by the
football pitch of a local football club. Belgrade shopping
center stock per 1,000 inhabitants increased to 110, which
is a much smaller ratio than in comparable cities in the CEE
region, indicating potential for further expansion. Rental
levels in traditional downtown retail locations are unbearable
for many tenants, resulting in visible vacancy and high
fluctuation of tenants. The situation in modern shopping
centers is slightly better, as occupancy is nearly 100% but
tenant fluctuation is unusually high.
The segment of the logistics market is very inert, so only a
few modern logistics properties were completed in 2011.
The most notable was the completion of a regional
distribution center by Croatian company “IDEA”. Prime
warehouse rents remain very stable ranging around EUR
4/SM/month.
The investment market is still in its infancy phase, as it is
very shallow and non-transparent. It is hard to estimate the
prime yield level, but some estimation can be made by
analyzing price fundamentals of international property
investors that are actually selling finished investment
products on the Serbian investment market.
Contact
NAI FINLAY
+ 27 11 807 4724
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
471,445
3.5%
$366.17
$7,249.41
5.8%
24.4%
5.5%
50.511
Property delivered a 4.3% total return in the six months
leading up to June 2011. The lack of capital growth reflects
a stagnant market year-on-year, due to rising vacancies and
base rental yields moving up to 9.6%. Capital growth in retail
property remained resilient (0.4%), offices grew marginally
(0.1%), but industrial growth contracted substantially
(-1.5%). South Africa continues to be seen as the gateway
into Africa, with China leading the acquisition trail.
Steady but slow growth indicates cautious optimism for the
commercial property sector for 2012 (anticipated GDP
growth 3.6%). Since 2008, the listed property sector has
remained fairly resilient and commercial property continues
to outperform overall global sector performance.
Cap rates for retail reflect 7.3%, 8% and 9.2% for superregional,
regional and neighborhood centers respectively.
Prime office space reflects 9.2%, with Class B space at
10.7%. Industrial rates range from 9.8% for high tech
industrial space to 10.3% for warehousing. Vacancies rose
again from early 2011. National vacancies reflect 6.8%, with
offices at 11.7%, retail at 6.4% and industrial at 4.2%.
Rising cost pressures continue to offset any improvements
in rental returns or vacancies, and along with a further loss
of jobs, will also affect sector performance. Tenant bad debt
has increased from 3% to 7%.
Compared to 2010, retail turnover hovers at similar levels,
however trading densities come under increased pressure
year-on-year, as foot count steadily decreases. Over 100,000
SM of retail space was launched in 2011 in Johannesburg
alone, and new development continues, albeit reduced, in all
sectors.
Class A office take-up (at 6.8%, down from 8.1% in the
previous year), supports the office rental sector, but Class B
and Class C office vacancies have risen, at 10.7%
and 13.2% respectively. Rental rates in both CBD and
decentralized offices have remained relatively stagnant since
2008.
Exciting development opportunities have resulted from
projects such as the ReaVaya Bus Rapid Transport project
and the recently opened Gautrain railway system, which
connect nodes within the metropolitan areas.
Industrial development is trending toward more mixed-use
properties in order to diversify investment spread, tenant
mix and services “under one roof”.
Belgrade At A Glance
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
EUR 15.00
EUR 14.00
EUR 12.00
N/A
N/A
EUR 16.00
EUR 15.00
EUR 13.00
N/A
N/A
$
$
$
23.23
21.68
18.58
N/A
N/A
$ 24.77
$ 23.23
$ 20.13
N/A
N/A
30.00%
22.00%
27.00%
N/A
N/A
Class B (Secondary)
IndustrIal
EUR 8.00 EUR 10.00 $ 12.39 $ 15.48 N/A
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
EUR
EUR
2.50
3.50
N/A
EUR
EUR
4.50
5.50
N/A
$
$
3.87
5.42
N/A
$
$
6.97
8.52
N/A
N/A
N/A
N/A
City Center
EUR 40.00 EUR 100.00 $ 61.93 $ 154.84 N/A
Neighborhood Service Centers
Community Power Center (Big Box)
EUR
EUR
8.00
8.00
EUR 30.00
EUR 12.00
$
$
12.39
12.39
$ 46.45
$ 18.58
N/A
5.00%
Regional Malls
EUR 10.00 EUR 70.00 $ 15.48 $ 108.39 N/A
Solus Food Stores
EUR 6.00 EUR 8.00 $ 9.29 $ 12.39 N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
EUR 250.00 EUR 400.00 $ 1,405,160.65 $ 2,248,257.04
N/A N/A N/A N/A
N/A N/A N/A N/A
EUR 50.00 EUR 80.00 $ 281,032.13 $ 449,651.41
EUR 300.00 EUR 450.00 $ 1,686,192.78 $ 2,529,289.17
EUR 200.00 EUR 400.00 $ 1,124,128.52 $ 2,248,257.04
Johannesburg At A Glance
conversion 8.24 Zar = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
ZAR
ZAR
ZAR
ZAR
ZAR
N/A
55.00
20.00
135.00
85.00
62.00
ZAR
ZAR
ZAR
ZAR
ZAR
N/A
85.00 $
95.00 $
210.00 $
225.00 $
150.00 $
N/A
7.44
2.71
18.26
11.50
8.39
N/A
$ 11.50
$ 12.85
$ 28.41
$ 30.44
$ 20.29
N/A
6.90%
20.10%
6.80%
8.40%
10.70%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
ZAR
ZAR
ZAR
22.00
9.00
23.00
ZAR
ZAR
ZAR
34.00 $
30.00 $
38.00 $
2.98
1.22
3.11
$
$
$
4.60
4.06
5.14
4.80%
1.60%
7.50%
City Center
Neighborhood Service Centers
Community Power Center (Big Box)
Regional Malls
Solus Food Stores
ZAR
ZAR
ZAR
ZAR
80.00
150.00
100.00
300.00
N/A
ZAR
ZAR
ZAR
ZAR
300.00 $
350.00 $
200.00 $
650.00 $
N/A
10.82
20.29
13.53
40.59
N/A
$ 40.59
$ 47.35
$ 27.06
$ 87.94
N/A
N/A
N/A
N/A
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
ZAR 1,500.00 ZAR 2,000.00 $ 736,686.17 $ 982,248.22
ZAR 4,200.00 ZAR 8,300.00 $ 2,062,721.26 $ 4,076,330.12
ZAR 600.00 ZAR 1,600.00 $ 294,674.47 $ 785,798.58
ZAR 1,600.00 ZAR 8,300.00 $ 785,798.58 $ 4,076,330.12
ZAR 1,500.00 ZAR 2,500.00 $ 736,686.17 $ 1,227,810.28
ZAR 1,000.00 ZAR 2,000.00 $ 491,124.11 $ 982,248.22
2012 Global Market Report n www.naiglobal.com 59