Andrew Peirson, Managing Director of iO Partners - Belgrade is an ideal market for office space development

He compared the markets of Serbia and other countries where they operate, pointed out the importance of sustainable development, but also revealed the company`s plans for the future.

- Looking back on our first year in the Serbian market, I can confidently say it has been a year of

significant success and strategic growth. We have managed to secure over 12,000 sqm of office leasing transactions in just our first year, which is in line with making the office sector our core business in the region.

Strategically positioned, our Serbian office leverages deep regional expertise to capitalize on the

significant opportunities in the market. Our transactions with a wide range of global occupiers are

testament to the type of work we have done and will continue to do in the future, and our long-term

relationship with JLL, whom I spent 18 years with across numerous markets, is key to our future growth in the region. Additionally, we are proud to report that our valuation team in Serbia has successfully evaluated over 700,000 square meters of commercial real estate assets across the SEE region this year.

- The markets in the region share some similarities, like the growing demand for modern office spaces and a focus on sustainability. However, there are key differences. For example, markets like Poland and the Czech Republic are more mature with a wider range of high-end office spaces, while Serbia, particularly Belgrade, is still developing but growing quickly.

In fact, the recent EIU report shows that Serbia is the second globally and the top in Europe for improvements in its business environment over the past 20 years. This highlights Serbia`s strong potential, especially in logistics and office sectors. Its regulatory environment is improving, making it an increasingly attractive investment opportunity.

Belgrade is therefore a market with almost zero leasing risk, a factor that gives most developers and

investors in more mature markets a daily headache. It is a market that is prime for office development, and should investors look at medium-long-term holding, then it’s an ideal market.

- Considering the current market dynamics, it is evident that there is a growing gap between the supply of high-quality, asset-grade properties and the growing demand. As of the end of H1 2024, the Belgrade office market A-class vacancy reduced to 4%, and we do expect further decline. The result of that is a lack of market entry opportunities and existing expansions. As well as a lack of development, the decrease in vacancy, particularly for A-class properties, can be predominantly attributed to the increase of foreign companies entering the market..

- In Serbia, a decrease in inflation has alleviated market pressures, opening up new opportunities in

industrial and commercial real estate in general, and encouraging a stable economic outlook. Serbia’s

clear advantageous location in the center of Southeast Europe makes it an ideal location for

manufacturing and logistical industrial activities, acting as a link between Europe`s east and west. Additionally, Serbia’s favorable tax environment and competitive labor costs make it an attractive location for companies looking to establish or expand their logistics operations. Currently, 143,000 square meters of A-Class industrial space are under construction, with over million square meters planned for the next five years. This demonstrates that the country`s industrial market is growing rapidly.

- Accessing capital in 2025 and beyond will require real estate developers to demonstrate how far along they are on the path to decarbonization and how they will achieve their ESG goals in the future. In parallel, occupiers are also approaching landlords to think holistically about sustainability and integrate human health and nature, in addition to climate, into their efforts.

At iO Partners, we have a dedicated sustainability team integrated with our Design & Build services. We guide clients through obtaining green certifications like LEED or BREEAM, enhancing both environmental impact and property value. For new projects or retrofits, we work with architects and engineers to design energy-efficient solutions and incorporate renewable energy systems, such as solar panels or smart building systems. We also advise on sustainable materials and technologies to reduce costs and environmental impact. Additionally, we help implement green lease structures, aligning tenants and landlords in their sustainability goals for a mutually beneficial outcome.

- We plan to continue innovating through automation and artificial intelligence, expanding our services for JLL corporate clients and investors. Our goal is to integrate digital innovation and sustainability, positioning ourselves as the top choice for commercial advisory in the CEE region. With a strong presence in the industrial and office sectors, along with our leading valuation team, we are focused on expanding our impact across Vienna, Belgrade, Bratislava, Bucharest, Budapest, and Prague.