The Serbian market is attractive because of the high quality of assets and tenants. We at MPC Properties will continue to explore opportunities locally, but we will also very soon launch the regional and international expansion of the company – Maxence Liagre
You provided our magazine with a really great qualitative overview of the domestic real estate market immediately after your arrival in Serbia. What do you think today, after having spent a year living and working in Serbia?
Of course, I know the market much better, but I’m still surprised by how dynamic and resilient it is. The Serbian market is probably the market that suffered the least due to the pandemic, but was also the fastest to recover. As of today, both for office and retail sectors, the occupancy levels, rental levels and overall performance are back to those of the prepandemic period. This means that the market still has huge potential for improvements and new developments during a normal period.
What would the arrival of a real estate investment fund mean for Serbia? Is that even possible?
The arrival of an investment fund would firstly say a lot about the existing situation on the market, but would also change the perspective on the future. When funds target a market, it means that the market in question already provides enough security in terms of political and economic stability, and that it has sizeable and rational assets, but also growth potential.
The presence of real estate investment funds would then increase market liquidity and, as a domino effect, rental levels and yields. I believe that it is now possible, as other markets in the region will soon reach saturation or an investment slowdown, but also because the Serbian market offers higher returns, together with a yield compression perspective.
The global pandemic has brought expansion of a new business model – working from home. How has this influenced the office market in 2021? What do you see as a trend in Serbia?
When it comes to the Serbian market, ‘working from home’ is not a business model by itself, but just a part time option in the spectrum of the full-time classic business model. I see it more as a short-term response to the issue of the pandemic and not as a permanent model. In fact, the pandemic has just emphasised and accelerated a flexible way of working that was already starting to emerge, just as it did with e-commerce for the retail market. As soon as the pandemic started to ease, we saw an immediate increase in the number of employees in our office buildings, but also a very large increase in demand for new office space. So, the classic office model is still very strong and represents the first choice for companies and employees. The main difference now relates more to the offer of offices, which needs to be more focused on employees’ wellbeing and positive experience at work.
You launch a new office project in 2021: TLD Belgrade. What is new since the beginning of the year?
Yes, our latest office project, TLD (Tri Lista Duvana), is in the full phase of development and we are targeting an opening for the beginning of next year. We have already reached 30% occupancy and, thanks to high demand, we believe that we could reach an occupancy rate of more than 70% by the opening. This building will be a landmark and the reference office address in city centre area, thanks to its unique location, architecture, optimal layout and quality of tenants. As I mentioned previously, we place a lot of importance on the employee experience: the building will possess a fitness centre, a common relaxation zone, as well as a Starbucks coffee shop, as the main retail tenant.
During the course of next year, we will focus on a new greenfield office project in New Belgrade, as our portfolio has already reached an occupancy rate of 99%. We need to secure and improve our presence on the market over the next couple of years, as one of the major providers of office space.
Shopping centres will become city hubs due to their location, easy access and ample car parking, but also due to them being places with the highest standards for health and safety
Based on your two decades of experience, could you predict what shopping centres of the future will look like?
Firstly, I believe that shopping centres will remain, and that they will remain strong. I don’t anticipate any hegemonial dominance from e-commerce. Shopping is about pleasure, sensation and experience, and only classic retail will be able to offer that for a long time to come. That said, shopping centres will need to continue to evolve and permanently increase the experience through their f&b offer, but they must also integrate ever-more flagship stores, where customers will not only see and buy products, but also feel a brand’s culture, image and trends. Shopping centres will become the ultimate showplace for brands and customers. Centres will also become physical hubs, where you not only shop, eat and socialise, but also where you will perform many other activities that can only be achieved through a physical presence, like all kinds of light surgery and body care, administrative procedures, indoor sports etc. Shopping centres will become city hubs due to their location, easy access and ample car parking, but also due to them being places with the highest standards for health and safety.
What is it that makes Serbia attractive for you?
As I mentioned before, the market is very dynamic and resilient, but it’s also in a development phase, rather than a consolidation phase. This means that there is still huge potential for the development of new projects. The second reason that the Serbian market is attractive is the quality of assets and tenants. You will find buildings on the market that reflect the latest architectural and technical trends worldwide, together with the best tenants from all over the world. Finally, you will find the same highest standards in people and companies that have great expertise of our industry. This is the combination that makes the market so attractive.
How do you see the further expansion of the global real estate market?
I don’t expect a geographical expansion like in the past, since every continent and country is already at a certain stage of development. I foresee more of an organic growth through refurbishment, extensions and the repositioning of existing assets. Real estate is not a solid business. It is permanently evolving and re-inventing itself.
„Smart buildings“ and „green buildings“ are slowly becoming the standard, not only around the world but in our country too. Can these buildings be made even „smarter“ and „greener“?
Sustainability will become increasingly important in the years to come. Portfolios and buildings will become green and sustainable, but what is new is that they will have to be recyclable. This means that we will have to anticipate the lifecycles of buildings when developing them and make them modular and ‘recyclable ready’. Construction materials will have to be recyclable, but also re-usable, through all refurbishment and repositioning phases.
More than 95% of MPC portfolio already has BREEAM or LEED certification. By the end of the year, they will additionally also receive Well certification, which is a standard for the health and wellbeing of users and visitors of our office and retail buildings. We give great importance to meeting standards at the international level. This is now a must for our company, but also – and even more relevantly – for all our tenants and their customers in our buildings.
What will the future bring to MPC?
MPC Properties is a pioneer and a development company. That is in its genes, and we therefore need to permanently feed our growth. It is for this reason that we will continue to explore opportunities locally, but we will very soon launch the regional and international expansion of the company. We need to find enough surface area and material to express our potential. The company has spent years chasing and applying the highest international standards when it comes to the portfolio and management strategy, and now is the time to reap the benefits of that and to test ourselves with higher challenges.