Ivan Gazdić, President of the FIC Infrastructure and Real Estate Committee (Petrikić & Partneri a.o.d., in cooperation with CMS Reich-Rohrwig Hainz)

Real Estate Market Stable, Renewables Gain Momentum

The impression from the real estate market is that investments are continuing in the sector this year, despite numerous COVID-19–related unknowns and uncertainties.

New office buildings are still being constructed, significant acquisitions have been made in the retail sector, and demand for housing remains high. Logistics centres continue to be developed in Serbia, proving to be one of the sectors with the greatest growth potential.

In other words, the market remains active, but its participants are more cautious, having learnt from their experiences during the pandemic. As such, tenants now pay more attention to the area of leased space that they actually require, the lease period to which they are ready to commit, as well as whether a building meets the desired health and safety standards.

The world is seeing the introduction of some new standards, such as the IMMUNE Building Standard, which entails, among other things, a set of over 100 recommended measures, technical solutions and facility management practices, so facilities can cope with current and future health challenges, and minimise the impact of pandemics and bacteriological or toxicological threats.

The Foreign Investors Council has traditionally cooperated successfully with the Ministry of Construction, Transport and Infrastructure, and one current initiative we will discuss with the Ministry is the issue of easing the process of converting the right of use into ownership in relation to construction land.

We expect the development of new, large projects in the energy sector, particularly the renewables sector. The adoption of the new Law on the Use of Renewable Energy Sources has undoubtedly generated great interest among foreign investors who are primarily interested in developing wind farms and solar power plants. The introduction of a system of market premiums will significantly contribute to this sector’s further development.

The adoption of the new Law on the Use of Renewable Energy Sources has undoubtedly generated great interest among foreign investors who are primarily interested in developing wind farms and solar power plants. The final version of this law included many of our committee’s recommendations.

Market premiums are a form of operational state assistance that augment the price of electricity that premium users deliver to the market and are determined in eurocents per kWh in auction processes. They can be received for all or part of a power plant’s capacity and are paid monthly for the electricity a power plant delivers to the grid.

Strategic partnerships may now be formed between public and private sectors to develop projects for generating renewable energy, which will be realised via a public call. The strategic partner will be selected by the Serbian government.

Many of the recommendations that our committee made to the Ministry of Mining and Energy during the public debate preceding the adoption of the Law on the Use of Renewable Energy Sources were accepted, to our great satisfaction.