Research Team SERBIA

Market Snapshot

Retail Market Overview

Developements
March 2012 - The Israeli company Plaza Centres opened Plaza Centre in Kragujevac, measuring 65,000 sq m of GBA and 26,500 sq m of GLA. Within the Plaza Centre, Idea Super supermarket is operating on 2,000 sq m of GLA. March 2012 The Croatian company Agrocor opened one more Idea Super supermarket in Nis, which occupies 1,600 sq m of GLA. April 2012 - The Company Black Oak Developments opened Fashion Outlet Park in Indjija - the first outlet centre in Serbia on 15,000 sq m of GLA. Expansion on another 15,000 sq m of GLA is planned in the next two years, with an investment volume of EUR 15 million. June 2012 - The Fortuna market from Arandjelovac opened the Fortune shopping mall area on 6,500 sq m of GBA. June 2012 - Slovenian company Mercator opened Mercator Premium Supermarket on 2,500 sq m of GBA in Belgrade, Roda Megamarket on 3,400 sq m of GBA in Valjevo and Roda supermarket on 1,000 sq m of GBA in Cacak. TABLE 1

H1 2012

In progress
October 2012 The expected opening of the Israeli company Big Cee shopping mall in Novi Sad on 40,000 sq m of commercial space and 1,500 parking spaces. In the center, supermarket DIS will be opened on 3,550 sq m. October 2012 - Austria's Krammer & Wagner & Illmaier announced the opening of the Stadium shopping center in Belgrade municipality of Vozdovac. The center is designed as a multi-level facility: two levels of the garage spaces, two retail levels and a football stadium on the top. The total area of the complex will amount close to 74,600 sq m. The Slovenian company Mercator will open a supermarket in this shopping center. Autumn 2013 - VIVO Shopping Park, with investement volume of EUR 15 million, should be open in Jagodina on the plot of 25,000 sq m. The facility will have 10,000 sq m of retail space and 360 parking places. It is expected that this Shopping Park will attract approximately four million customers per year. VIVO Shopping Park is entirely domestic investment of the namesake company.

GRAPH 1

New retail structures in Serbia (H1 2012)

3 2 3

supermarkets

hipermarkets

shopping malls

Note: Supermarket is self-service shop with GLA of 400 to 2,500 sq m, while hypermarket has an area of more than 2,500 sq m.

Source: Coreside RESEARCH

GRAPH 2

Shopping Center Stock in Serbia (H1 2012)

200,000
150,000 100,000 122 50,000 0 105 111 325

Belgrade Novi Sad Nis Kragujevac Shopping Center Stock (sq m GLA) Stock (sq m GLA/1,000 inhibitants)
Source: Coreside RESEARCH

Pipeline: Belgrade Retail Centers

Project GTC Belgrade Plaza Visnjicka Plaza Delta Planet BIG CEE Beograd Retail Park Zemun
Source: Coreside RESEARCH

Location Cukaricka padina Downtown Visnjica Autokomanda Ibarska road Zemun

Developer GTC Plaza Centers Plaza Centers Delta Invest BIG CEE IBC

GLA (sq m) 38,000 N/A 48,000 80,000 10,000-15,000 27,000

Status Pipeline (deadline unknown) Pipeline (deadline unknown) Pipeline (deadline unknown) Pipeline (deadline 2014) Pipeline (deadline unknown) Pipeline (1st phase deadline 2013)

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Market Snapshot | Retail

H1 2012
first store will be located somewhere near the Highway E-75, close to New Belgrade and will be opened at the end of 2013 or in 2014.

Retail trade
In accordance with the official data, published by the Statistical Office of the Republic of Serbia, retail trade turnover in Serbia in H1 2012 compared with same period in 2011 raised by 5.1% at current prices and decreased by 0.9% at constant prices. In terms of expenditure by type of goods for H1 2012, compared with H1 2011, almost all sections remain on the same level of participation. The only apparent movement occurred in sectors of residence, water, electricity, gas and other fuel (3% increase) and the sectors of food and non-alcoholic beverages (3% reduction).

GRAPH 3

Average Serbia Household Expenditure (H1 2012)

9% 4% 9% 6% 4% 15%
5% 5%

Vacancy
The lowest vacancy rate of 2.5% has been recorded at prime locations, such as Knez Mihailova Street. Prime shopping centres continue to keep vacancy levels to a minimum - around 5%, while smaller shopping centres are registering a reduction in demand which has caused a high vacancy rate of approximately 10%. Some new brands have entered the Serbian market for the first time, such as C&A and the British fast fashion brand New Look, as well as the French children brand Z-Infant.
10% 4% 8%
6% 5%

18%
5% 4%

Belgrade shopping malls

During H1 2012, there were no new shopping malls deliveries, therefore Usce and Delta City malls still present the only stock of this type of retail in Belgrade. The Slovenian company Mercator-S started renovation on the Mercator Centre in May. The reopening is expected in September 2012.

43%

40%

Rents
Belgrades retail rents remained the same as they were in December 2011, but dropped when compared to the same period of the previous year. The rate of these declines reflects the overall economic uncertainty in the region. Prime rents dropped significantly, an average of between EUR 40 and EUR 70 per square meter for locations such as Knez Mihailova Street, Terazije Square and Kralja Milana Street. Rents in the second zone which includes Blvd. Kralja Aleksandra, Balkanska Street, Nusiceva Street and Decanska Street varied between EUR 20 and EUR 50 per square meter. Rental rates in prime shopping centres remain largely stable, from EUR 20 to EUR 50 per sq m, which can be attributed to the limited availability and slow construction pipeline.

1H 20 11 1H 20 12 Health care, Education and oth er goods and s ervices Commu nication s Transport Recreatio n, culture, restoran ts and hotels Hou shold furniture, eq uipement and maintenan ce Residence, water, elect rici ty, gas and ot her fuel Clothing an d footwear Alcohol ic dri nks an d tobacco Food and no n-alco holic beverages

Retail werehouse
Mercator has opened a Mercator Premium Supermarket in the Beogradjanka building in Belgrade. Openings of Mercators Roda Centre on 3,400 sq m of GBA and Interexs supermarket on 2,600 sq m of GBA in Valjevo are expected in August 2012, as well as Metro Cash & Carrys smallscale retail scheme Metro po meri on 2,600 sq m of retail space in Pozarevac. The German chain Lidl has announced their plan to open several stores in Serbia. Zrenjanin, Novi Sad and Subotica have been named as possible locations. The Swedish company IKEA is in the final phase of land acquisition. Their

Source: Coreside RESEARCH

GRAPH 4

Yields and rents (H1 2012)

EUR 70 EUR 60 8.38% 8.50% 9.50%

EUR 50
EUR 40 EUR 30 EUR 20 EUR 10 8.00%

Yields
Yields are expected to stay stable, in the range of 7.5% - 8.5% for high streets, 8% - 9% for shopping centres and 8.5% - 9.5% for retail warehouses.

rents range Source: Coreside RESEARCH

yield average

Please contact us for further information

Jovan Vujic
Associate Director +381 11 301 0000 jovan.vujic@coreside.rs

Ivana Knezevic
Research Analyst +381 11 301 0000 ivana.knezevic@coreside.rs

Darko Grahovac
Consultant +381 11 301 0000 darko.grahovac@coreside.rs

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