Erste is very active in Serbia’s real estate sector and is known as a reliable partner for financing real estate projects. Its aim has been to contribute to developing Serbia’s market on a long-term basis, as the group considers commercial real estate as being part of a country’s critical infrastructure
When it comes to logistics, we believe that Belgrade has all the potential to become a central hub for the Balkans, as the city is strategically located at the intersection of a number of pan-European corridors – says Mr Graggaber.
Can you tell us why Serbia is an interesting market for Erste?
At Erste Group, we always take a long-term view. We financed our first real estate project in Serbia almost 15 years ago. Back then, the main segments of the country’s real estate sector – namely retail, office, industrial and tourism – were underdeveloped and Serbia was seen as a rather exotic market to many banks in Western Europe. Since first entering the Serbian real estate market, we have financed projects worth more than half a billion euros, covering all segments. We still see opportunities and will support our clients in their future endeavours.
You are also part of the management of Sirius Offices Belgrade, a project that you have developed with your subsidiary Erste Group Immorent. Why did you choose Serbia to invest, and to become a real estate developer yourself?
Immorent is a 100% subsidiary of Erste Group and has been a project developer for 50 years, both in Austria and around the CEE region. More than 10 years ago, Immorent set up Immorent Singidunum, its own project company in Serbia, and acquired land in New Belgrade. That area in Milutina Milankovica Street, formerly known as the 3rd Boulevard, had been rather vacant and wasn’t very appealing back then. This has changed significantly over the last 10 years and we believe that we’ve contributed to that change to a considerable degree.
Sirius Offices has become the national headquarters of several international companies from various industries
The location of Sirius Offices is now one of the most attractive corners of New Belgrade, being right next to the train station and having a number of bus and tram stops on the plot, providing direct access to the Ada and Gazela bridges. In the meantime, Sirius Offices has become the national headquarters of several international companies from various industries, such as Erste Bank Serbia, Strabag or Milenijum Osiguranje. At the same time, we have pursued an attractive tenant mix that includes a number of smaller tenants related to IT and shared services. The project also incorporates a supermarket and two stylish restaurants. Last but not least, the site benefits from Sirius square, which spreads over an area of 2,300m2 and provides an area for relaxation, communication and events for tenants and visitors.
How do you see the future of the Serbian real estate market?
We believe that the real estate market has shown healthy development over previous years and that it will continue to offer attractive opportunities in the future. None of the segments have experienced a dramatic valuation increase, therefore returns are likely to remain attractive and sustainable. While the market for shopping centres in Belgrade is experiencing some saturation, we still believe that there is potential for this segment in secondary cities across the country. There is currently a low vacancy level in the office market and we expect continuing demand for office space, mainly from the IT and R&D sectors.
We at Erste are committed to Serbia and its people, and we will continue providing our contribution to the country’s ongoing positive economic development.