(AG Real estate) Shopping centers and Serbia

Shopping centers as a novelty in retail selling have their origin in the beginning of the last century. Shopping centers today, as independent institutions, with their sociological, economical and investment importance occupy a particular place among the mentioned sciences. Serbia as a country in transition, with an economy in renewed development and with a considerable population which is consumer oriented, represents a real challenge for investors in shopping centers.

With all these attributes Serbia, and particularly Belgrade, should have had until today at least a couple of shopping centers. Unfortunately, thus has not happened.

In countries in transition investors in shopping centers are looking for:

- Good location;

- Secure macro-economical situation;

- Assured level of income of the population;

- Development of local economy;

- Numerous harmonization with international commercial conventions;

- Developed infrastructure, indispensable logistics and storage capacities;

Taking into consideration the fact that there is no important shopping center in Belgrade, the success of the first shopping center will not depend primarily on the location but rather in the fact that it will be the first shopping center in the city market. A couple of years ago, some investors have bought or rented, i.e. "occupied" the best locations in Belgrade for developing shopping centers, but have not yet started with construction works. The price and the yield of capital, as a consequence of the business activity in general, are crucial for the investor's decision to start the building of a shopping center. On the other hand the capital cost depends on the macro-economic situation and on the rating of the country.

One of the main preconditions for the success of shopping centers is the existence of a certain level of earnings of the population necessary in order to have a bigger purchase power. This would generate an income in retail and therefore a yield in the investment in shopping centers. The development of local economy is having an impact on the level of earnings as well as on the supply and logistics of the retailers and shopping center clients. It will also be defined by the quantity of goods to be imported and which percentage of such goods would come from the local sources. With reference to the aforesaid, there is a necessity of compliance with international trade conventions which have to be enforced so that businessmen have clear rules when ordering from abroad. It is also very difficult and costly to organize any bigger level of serious trading without necessary logistics and storage capacities. It is possible that the increase of investment in these properties during the last year is the right reaction of investors to the "announced growing needs" of the coming changes.

(Delta City 67 Novi Beograd)

Situation in Belgrade

Today, we can be proud that numerous shopping centers in Belgrade are in the initial stage of development and we can expect to have at least two serious shopping centers by the end of next year. It is particularly important to mention that for the shopping centers that are already being constructed there is a waiting list of lessees both from domestic and foreign companies. Taking into consideration that the mentioned shopping centers are in the city, their planned size (from 40,000 m² and upwards) demonstrates the seriousness of the investors and the investments. The investment value goes from 60 to more than 100 million euros.

Shopping centers are not only places of supply but they are today centers of social and entertainment events. Modern shopping centers besides classical trade of goods and services have in their repertory bars, restaurants, theaters as well as recreational centers; thereafter, it is certain that such a development of shopping centers in Belgrade would bring significant changes in the supply habits as well as in every day's life of the population aged from 7 to 77.

It is to be considered that with the construction of shopping centers will start a high-quality and "closer" competition among them. Further we shall acknowledge what will have an impact on their better or worse success.