Mia Zecevic, CEO of Novaston Platform – Company’s Strategic Goal is to Position Itself in the Sector of Office Space and Logistics
The coronavirus pandemic has had a sobering effect on the operations of all industries, including real estate management. The crisis was most felt by the residential, office and retail sectors, whereas the logistics sector displayed a certain degree of stability due to the limited supply and the high demand for storage space. We talked about the effect of the crisis on these sectors with the CEO of the Novaston Platform, Mia Zecevic. Novaston has long since positioned itself in the market in the region as a highly professional company that provides the full service in sales, lease and management of real estate, management, marketing, as well as the management of construction projects, equipping new office facilities and locations for the development of production-logistics complexes.
– The strategic goal of the company is to develop and be equally successful in various segments of the industry and that is why we implement modern technologies and solutions, and our expert teams with local and international experience approach each client personally. From this year, we are focusing on the business sector and the logistics sector, and we pay special attention to a large project in Croatia. This is the hotel management sector, we are currently hired to set up asset and property management and organization, which is a big challenge for us – says Mia Zecevic, the CEO.
Novaston is already positioned as a leader in the management of retail parks and shopping centers, not just in Serbia, but in the region as well. What is the situation like in that sector at the moment, slightly more than a year after the outbreak of the pandemic?
– The retail sector was among the first ones to be affected by the measures adopted due to the pandemic, which is why many brands quickly turned to online sales. However, retails parks, known here as outdoor shopping center, operated most of the time according to the rules of safe shopping – the possibility of maintaining the required physical distance, a direct access to the store in an outdoor environment, spacious parking lots, as well as the implementation of all the preventive measures. The market of retail centers is not saturated, there are plenty of projects that are being realized and that have been announced throughout Serbia and in the region. Several months ago, we mediated in the process of an acquisition worth EUR 61 million between two influential investors in the Balkans: NEPI Rockcastle and BIG CEE, for the retail facilities Kragujevac Plaza Shopping Center and Krusevac Retail Park. Also, the whole team was engaged in launching and opening the first retail park in Pirot, Puls Shopping Park. From the idea of the reconstruction/construction, preparation of the business plan and the setting up of the project, through the process of reconstruction and construction, negotiations and the signing of contracts with the tenants and the suppliers, we were part of the process, all the way to the organization of the opening ceremony in September 2021. We are now continuing with the activities of the full operating management of PULS Shopping Park. This year, a big investment transaction also took place – our long-term strategic partner, the Austrian company IMMOFINANZ, bought four retail parks of Poseidon Group. In addition to the current seven STOP SHOP retail parks of this company’s brand, Novaston is now also running those additional four retail parks, whereby we have taken over the leadership in the market of management in this sector. Also, STOP SHOP retail parks in our country reached the occupancy rate of 100%, as did the Puls Shopping Park in Pirot, which speaks to the popularity of this concept of an outdoor shopping center. Our other clients, such as IKEA, which is already working on the construction of the Ava Shopping Park in Belgrade, are also expanding their businesses. There’s room for the development of new retail parks in secondary places, there’s a need, there’s a demand and supply, so I am sure that, in 2022, we will see new openings and new projects.
– The strategic goal of the company is to develop and be equally successful in various segments of the industry and that is why we implement modern technologies and solutions, and our expert teams with local and international experience approach each client personally. From this year, we are focusing on the business sector and the logistics sector, and we pay special attention to a large project in Croatia. This is the hotel management sector, we are currently hired to set up asset and property management and organization, which is a big challenge for us – says Mia Zecevic, the CEO.
Novaston is already positioned as a leader in the management of retail parks and shopping centers, not just in Serbia, but in the region as well. What is the situation like in that sector at the moment, slightly more than a year after the outbreak of the pandemic?
– The retail sector was among the first ones to be affected by the measures adopted due to the pandemic, which is why many brands quickly turned to online sales. However, retails parks, known here as outdoor shopping center, operated most of the time according to the rules of safe shopping – the possibility of maintaining the required physical distance, a direct access to the store in an outdoor environment, spacious parking lots, as well as the implementation of all the preventive measures. The market of retail centers is not saturated, there are plenty of projects that are being realized and that have been announced throughout Serbia and in the region. Several months ago, we mediated in the process of an acquisition worth EUR 61 million between two influential investors in the Balkans: NEPI Rockcastle and BIG CEE, for the retail facilities Kragujevac Plaza Shopping Center and Krusevac Retail Park. Also, the whole team was engaged in launching and opening the first retail park in Pirot, Puls Shopping Park. From the idea of the reconstruction/construction, preparation of the business plan and the setting up of the project, through the process of reconstruction and construction, negotiations and the signing of contracts with the tenants and the suppliers, we were part of the process, all the way to the organization of the opening ceremony in September 2021. We are now continuing with the activities of the full operating management of PULS Shopping Park. This year, a big investment transaction also took place – our long-term strategic partner, the Austrian company IMMOFINANZ, bought four retail parks of Poseidon Group. In addition to the current seven STOP SHOP retail parks of this company’s brand, Novaston is now also running those additional four retail parks, whereby we have taken over the leadership in the market of management in this sector. Also, STOP SHOP retail parks in our country reached the occupancy rate of 100%, as did the Puls Shopping Park in Pirot, which speaks to the popularity of this concept of an outdoor shopping center. Our other clients, such as IKEA, which is already working on the construction of the Ava Shopping Park in Belgrade, are also expanding their businesses. There’s room for the development of new retail parks in secondary places, there’s a need, there’s a demand and supply, so I am sure that, in 2022, we will see new openings and new projects.
What is the situation like when it comes to the office space sector?
– When it comes to the lease of office space, there was a certain halt during the first peak of the coronavirus in the periods March-May and then June-August in 2020. The dynamics of construction, that is, the completion of projects, was also recorded in that period, due to the movement restrictions, the reduced volume of production of secondary raw materials and finished components in the construction sector and logistics problems, which are still dominant, even a year and a half since the outbreak of the pandemic. There was also a problem of the final approval of the financing of the projects which were in the final pre-phase of the beginning of the construction. Let me remind that, before the pandemic outbreak, the development of this sector in Serbia was very dynamic, with a vacancy rate at below 5% and record lease prices. With the outbreak of the coronavirus, the companies that could do so redirected their employees to work from home or through the “combined model” which entails partly working from home and minimal visits to the office, as well as the renting of flexible office space to the end of employee diversification throughout several locations that they visit as needed. That temporarily emptied hundreds of thousands of square meters of office pace and left the owners of those spaces uncertain for a long period of time regarding the extension of the lease agreements, as well as the renting of available space in office buildings. Some companies, especially in the IT sector, reduced their floor area and insisted on more flexible new conditions of office space lease. When it comes to the lease, advantage is given to buildings which can be naturally ventilated (by opening the windows), those with adapted systems of central air-conditioning… At the end of last year and at the beginning of this one, new projects were launched, and those completed were successfully leased at the planned prices, so the coronavirus pandemic will certainly not destroy the concept of working in traditional office spaces directly and entirely. Even with this global experiment of working from home, the flexibility of the renters and the milder price drop was only of temporary character at the beginning of the pandemic. The future office concept will take effectiveness into account, but also the fact that models such as the combined model, are more acceptable to the employers and the employees in some fields.
What about the logistics sector?
– It’s interesting that the logistics sector, with all these unfavorable circumstances, has proven to be the most resistant. Considering the limited supply and the high demand for storage space for primary distribution, in the Belgrade region alone, five big projects are being prepared at the moment (CTPark Belgrade West Simanovci, KLP 3 Simanovci, IPB 6 Simanovci, CTP Belgrade Center, Lidl Lapovo) and one under construction (CTPark Belgrade North Novi Banovci), which take up an area of around 940,000 m2. The rent price in distribution storage facilities has remained stable (EUR 4.25 per m2), whereas prime yield dropped to 8.5% for A-class buildings.
You have announced that the company’s strategic goal is to position itself in the sectors of office space and logistics.
– An important step toward the realization of this goal is cooperation with Schneider Electric and Novkabel on the development of a modern business-logistics center in Novi Sad. This is the reconstruction of the former industrial hall of Novkabel into a high-tech facility of 14,000 m2, whose completion is expected in 2022. The Novaston Platform, as the exclusive partner, strategically coordinates the entire process of designing, management and promotion of this future facility of the Schneider Electric Development Center. Also, we are active in this field with other big companies and investors on the development of various business facilities. One such facility is the Revolucija office space, of around 10,000 m2, which is being built by Granit Invest in Belgrade. Our Novaston Asset Management, as part of the platform, is the exclusive rent representative of this attractive office space in Vracar. This luxury office facility will follow the latest trends in construction and interior design, implementing nature protection standards and COVID-19 preventive elements, such as the inflow of fresh air to conference halls, contactless door opening and similar features.
Novaston is also announcing other projects, which won’t be limited to the local real estate market exclusively.
– We have been active in other markets for a long time now. We are active in Croatia, Montenegro, Bosnia and Herzegovina. After positioning in the retail market and expanding the operations in the sectors of office space and logistics, we are planning important projects in the sector of tourism. We are part of the residential-tourist project Petram Resort & Residences, in the northeastern part of the Istrian peninsula, which offers more than 250 luxury properties for rest or residence, with a gross area of around 100,000 m2. This is the biggest project of its kind in Croatia. We are also planning several other projects in other parts of the region, and, in the meantime, we are continuing the successful cooperation with nearly all the main local and foreign investors (IMMOFINANZ, NEPI Rockcastle, GTC, Ikea) and developing new partnerships with large companies such as Schneider Electric, MK Group, Aleksandar Gradnja, AB Market, Granit Invest.