Belgrade, as the epicenter of Serbian economic activity, represents the largest real estate market in the country. The development of office space in Belgrade began a decade late compared to regional markets, which contributed to the slower entry of international companies that make up a large part of the demand and stimulate the development of this sector. However, with gradual growth and the fact that over 600,000 m2 of modern office space have been built in Belgrade since 2015, Belgrade has become a regional business center and today represents a young and healthy market with more than one million square meters of office space, which continues to grow.
The supply of modern office space is still considered insufficient, as indicated by the vacancy rate. Modern buildings in good locations in the central business zone of New Belgrade or in the city center are occupied, which indicates that more new projects are needed. Over the years, the optimal number of facilities on the market has generally been built, so at one point we did not have high availability like in more developed markets.
Rents have been increasing for several years in a row, due to rising land prices, construction costs, and financing costs. We have noted that the asking rent in newly built or future facilities is above previously achieved rents. In line with time, we expect the trend of rent growth to continue in the coming period. Compared to the past few years, future supply has slightly decreased, which was also contributed to by the hybrid business model, as well as the company’s decisions to reduce the number of offices they rent, and thus the growth of the share of subleases among tenants.
According to research, employee work from the office increased during 2024. Over 60% of companies reported office space occupancy ranging from 40 to 80%, while in 2023 this share was below 50%. Currently, there is a great focus on additional content that office space offers, flexible space, and the implementation of technological innovations. The hybrid business model has survived, but we can expect that coming to the office will prevail due to the need for people to socialize, change the environment, and improve cooperation with colleagues. Some significant users of office space, such as banks, support their employees working from home, which allows for a reduction in the number of workplaces in offices. Such work trends also affect the real estate market.
Furthermore, DANOS believe office spaces will be tailored to the nature of the work conducted, investors will increasingly focus on making buildings adaptable over time, which will benefit tenants while increasing costs for space owners.
Key Q1 2025 data:
- Office stock – 1.1 million m2; Take up Q1 2025 approx. 20,000m2; Initial lease – 18 – 19 EUR/m2/month;
- Vacancy rate A and B classes – total approx. 5%; Prime office yields – 7.75-8.25%;
- Office space in Belgrade by class – Class A – 68% and Class B – 32%;
- Office space in Belgrade by location: New Belgrade – 68%, City Center 21%, other areas 11%; Under construction – approx. 80,000 m2.
Article by Milan Krstanoviฤ, ย Serbia, Danos, International Property Consultants & Valuers
