Published on and written by Cyril Jarnias
Commercial real estate in Serbia is scaling up. Driven by solid economic growth, a wave of foreign investment, and a vast infrastructure program, the country is attracting increasing capital into offices, retail, logistics, and hospitality. Belgrade concentrates most of the activity, but Novi Sad, Niš, Kragujevac, and other regional cities are beginning to offer real alternatives.
The Serbian real estate market offers opportunities as it is still underdeveloped compared to other Central European capitals. For an investor, the main challenge is identifying the best positioning and securing their operations by respecting the specific legal framework of the Republic of Serbia.
A Macroeconomic and Political Environment Favorable to Investment
The recent economic momentum sets the tone. Between 2020 and 2023, Serbia’s real GDP grew by approximately 12%. In 2023, annual growth reached 2.5%, before accelerating to 4.7% year-on-year in the first quarter of 2024, largely driven by services and construction. The National Bank of Serbia anticipates growth of 3% to 3.5% in 2024, then 4% to 5% for 2025‑2026, including massive investments related to the EXPO 2027 World Exposition and the “Modern Belgrade” program.
Record flow of foreign direct investments in 2023, representing about 6.1% of GDP.
On the monetary front, inflation has been decelerating since spring 2023 and stabilized at 3.8% year-on-year in June 2024. The key policy rate remained unchanged at 6.5% in March 2024. The combination of gradually controlled prices, fiscal discipline, and a macroeconomic reform framework has contributed to improving the country’s risk perception. Major international agencies and financial institutions highlight the resilience of domestic demand and the banking system.
The average net salary in Belgrade in Q1 2024, a level above the national average that supports economic demand.
A Legal Framework Largely Open to Foreign Capital
Serbia has established a relatively liberal legal framework to welcome foreign investment, with a stated goal of convergence with European law. The Investment Law guarantees several structuring principles:
– equal treatment between local and foreign investors (national treatment);
– freedom of investment, payments in foreign currency, and repatriation of profits after taxes are settled;
– protection against expropriation, except in cases of public interest, in a non-discriminatory manner, with adequate and prompt compensation, calculated based on the market value before the expropriation project is announced.
Foreign investors can acquire commercial real estate and other property rights in Serbia, subject to reciprocity. This means a foreign national can purchase a property if Serbian citizens enjoy equivalent rights in their country of origin. In practice, this condition is largely met, notably with the USA, Canada, EU countries, the United Kingdom, Switzerland, the United Arab Emirates, China, and Turkey.
Certain restrictions remain, mainly on agricultural land and sensitive areas (border, military zones). In practice, investors frequently set up a local company (DOO) 100% owned by foreign capital to acquire land or assets that would be restricted for individuals. This structure also facilitates obtaining financing and tax optimization.
The law provides a set of financial support measures for investment projects. These aids include direct subsidies for industrial and service investments, corporate income tax exemptions of up to ten years for projects exceeding €8.5 million and creating more than 100 jobs, as well as social contribution relief for new hires. Furthermore, it allows for the transfer of public land at a reduced price and provides specific incentives in economically disadvantaged areas.
Offices: A Tight Belgrade Market, Still Attractive Yields
The office segment is one of the most structured and closely monitored by institutional investors. The market remains highly concentrated in the capital: almost all of Serbia’s modern office stock is in Belgrade, while Novi Sad holds a position as an emerging challenger.
Market Structure and Vacancy Rate
At the end of the second quarter of 2024, Belgrade had approximately 1.33 million m² of modern office space, with nearly 60% in Category A. In 2024, the total office stock in the capital reached 1.392 million m² after the delivery of about 74,000 m² of additional space (and over 130,000 m² brought to market in 2023, an annual record). New Belgrade is by far the main office hub, with a stock approaching one million m².
The overall vacancy rate remained low, around 6% at the end of Q2 2024, down from 6.8% in Q1. Category A buildings are even tighter: at some recent points, their effective vacancy dropped to about 2%‑3%. Analysts anticipate a continued decrease, given limited short-term pipeline and sustained demand, particularly from IT groups, shared service centers, and financial services.
The ‘prime’ rent for high-end offices in Belgrade was around €18/m²/month in 2024.
Transaction Pace and Occupier Profiles
In terms of leasing activity, approximately 51,000 m² were leased in the second quarter of 2024, more than in Q1 2024 (about 33,000 m²) and Q2 2023 (45,000 m²). However, the first half of 2024 totals 85,423 m², a 20% year-on-year decrease, a sign that some large users are becoming more cautious.
A notable feature of the recent market is the increasing prominence of medium and small-sized spaces. In Q1 2024, 50 out of 69 transactions involved areas less than or equal to 500 m². In Q2, 67% of deals still concerned areas below this threshold, even though the average transaction size rebounded to about 850 m² (compared to 490 m² in the previous quarter). This fragmentation of demand aligns with the rise of hybrid work and the search for flexible spaces.
In the first nine months of 2023, information technology (IT) was the main leasing sector, accounting for 38% of leased space. It was followed by consumer services and leisure (27%), then by financial services. These three sectors remain the market drivers. Simultaneously, demand is concentrated on modern, well-serviced buildings offering amenities like parking, relaxation areas, convenience retail, and dining services.
Novi Sad, thanks to its academic base and positioning as a technology hub, is beginning to emerge as a second-tier office hub. Several Grade A office complexes are under development there, including a first major office tower within Pupin’s Palace (over 13,000 m² of GLA). Rents in Novi Sad remain below those in Belgrade, offering an interesting alternative for IT and BPO companies.
Yields and Acquisition Prices
For investors, the attractiveness of the Serbian office market also lies in the yield levels. Prime office yields in Belgrade are around 8.25%‑8.75% in 2024, having been observed in a range of 7.5%‑8% in 2023. Office sales slowed by about 15% in the first half of 2025 compared to the same period in 2024, due to higher financing costs and a more uncertain global economic environment, but the leasing fundamentals remain strong.
Purchase prices in new business centers averaged between €2,350 and €2,600/m² in the first half of 2025, compared to about €2,200/m² a year earlier. At these price levels, gross yields remain significantly higher than in Prague, Warsaw, or Budapest, even considering higher local financing costs.
Belgrade Office Market at a Glance
| Key Indicator (Belgrade) | Recent Indicative Data |
|---|---|
| Total modern office stock | ≈ 1.39 million m² |
| Share of Grade A buildings | ≈ 60% |
| Overall vacancy rate Q2 2024 | ≈ 6.0% |
| Grade A vacancy rate (recent) | ≈ 2%‑5% depending on period |
| Prime rent (Grade A) | ≈ €18/m²/month (rising in 2025) |
| Prime office yield (Belgrade) | ≈ 8.25%‑8.75% |
| Take-up H1 2024 | 85,423 m² (-20% yoy) |
| Share of New Belgrade in Q2 2024 demand | ≈ 78% |
Retail: The Rise of Retail Parks and Under-Supply of Prime Shopping Centers
The Serbian retail market is both in a catch-up phase and undergoing transformation. On one hand, the supply of modern shopping centers remains lower than in other Central European capitals. On the other hand, retail parks are growing at a steady pace across the country, becoming the dominant form of modern retail.
Stock and Formats
The total stock of modern retail in Serbia reached approximately 1.25 million m² of GLA in Q2 2024, or about 188 m² per 1,000 inhabitants. Belgrade concentrates nearly 590,000 m² of this supply, or 350 m² per 1,000 inhabitants, but cities like Novi Sad, Niš, and Kragujevac show comparable, or even higher, densities.
Indicative breakdown by city (Q2 2024):
| City | Modern retail stock (GLA) | Retail density (m² per 1,000 inhab.) |
|---|---|---|
| Belgrade | ≈ 590,000 m² | ≈ 350 |
| Novi Sad | ≈ 124,400 m² | ≈ 337 |
| Niš | ≈ 76,600 m² | ≈ 307 |
| Kragujevac | ≈ 65,200 m² | ≈ 381 |
Shopping centers of Western type still represent the majority of the stock in Belgrade (about 53%), but retail parks are gaining ground rapidly. Nationally, the share of retail parks rose from about 11% in 2011 to 35% in 2019, then to nearly 38% after recent deliveries. In 2024, new projects under construction outside the capital are almost exclusively retail parks.
Rents, Yields, and Transactions
Rents in major Belgrade shopping centers remained stable around €23‑28/m²/month for standard shops, and €48‑50/m²/month for prime small-space ground floor locations. In retail parks, prime rents are generally between €8.5 and €12/m²/month, allowing brands to reduce their occupancy costs while benefiting from good visibility.
Yields on commercial assets in Serbia vary according to risk profile: prime shopping centers (8%‑8.5%), retail parks and big-box stores (8.25%‑9%), with some international portfolios reaching 8.75%‑9%.
On the investment side, one of the recent emblematic transactions was the sale of the Promenada shopping center (nearly 49,000 m² in Novi Sad) to the Israeli operator BIG CEE for €177 million, the largest transaction of its kind in Serbia in several years. At the same time, groups like CPI Property Group are developing and acquiring STOP SHOP retail park networks in about ten Central European countries, with a particularly strong presence in Serbia (14 parks, over 130,000 m²).
Pipeline and Territorial Coverage
The construction activity illustrates a clear strategy: equip each medium-sized city with its own retail park, often in two phases. By mid-2024, about 90,800 m² of retail projects were under construction in the country, including a 32,000 m² retail park in Belgrade and several parks in the provinces.
Some illustrative projects:
| Project / City | Type | Likely GLA | Target Delivery |
|---|---|---|---|
| Ava Shopping Park Phase 2 (Belgrade) | Retail park | 10,000 m² | Delivered 2024 |
| Nova Retail Park (Ub) | Retail park | 11,500 m² | Delivered 2024 |
| NEST Kikinda | Retail park | 5,000 m² | 2024 |
| SHOP PARK Aranđelovac | Retail park | 9,745 m² | 2024 |
| Penta Park Prokuplje | Retail park | 9,000 m² | 2024 |
| Nova Retail Park Šid | Retail park | 12,000 m² | 2025 |
This geographical spread responds to an under-exploited consumption potential, in a country where the population is described as highly consumerist despite a lower standard of living than in the EU. For international brands – fashion, sports, discount, drugstores – retail parks offer a low-cost, quickly deployable format, with a tenant mix (fashion, food, leisure, dining) allowing them to capture regional clientele.
Strategic Role of Belgrade and Pedestrian Streets
However, Belgrade remains the heart of modern retail: about 43% of the national stock of modern retail was already there in 2019, and new deliveries (BEO Shopping Center, Galerija in the Belgrade Waterfront project, extension of Ava Shopping Park, etc.) have reinforced this position.
Shopping streets remain highly sought after, due to a lack of a sufficient number of large shopping centers. On prime streets like Knez Mihailova, rents for small spaces can exceed €100/m²/month. Vacancy in prime shopping centers remains low (often around 5% or less), a sign of a market still far from saturation.
Logistics and Industrial: A Hub Under Construction at the Crossroads of European Corridors
For investors seeking stable long-term cash flows, the Serbian industrial-logistics segment is one of the most promising. The country has a strategic geographical position, at the intersection of several pan-European corridors:
– Corridor VII (Danube), providing river access to the Black Sea and, via the Rhine-Main-Danube, to the North Sea;
– Corridor X (E‑75 and E‑70 highway and railway axes);
– Corridor XI, intended to link Central Europe to the Adriatic.
A vast infrastructure program is underway: modernization of the road network (over 1,000 km of highways planned or under construction, including the Morava Corridor, Belgrade–Sarajevo, Belgrade–Zrenjanin–Novi Sad, Niš–Merdare), expansion of Belgrade’s Nikola Tesla Airport (€730 million investment), modernization of river ports (Prahovo, Smederevo, Belgrade port redevelopment project), commissioning of a high-speed rail line Belgrade–Novi Sad, and future modernization of the Belgrade–Niš line.
Stock, Construction, and Demand
The total stock of modern logistics buildings now exceeds 6 million m² nationwide. In 2024, in the Belgrade area alone, eight industrial projects were delivered, representing about 243,000 m², mostly built speculatively (80%). Over the same period, logistics take-up reached about 160,000 m², with demand exceeding new supply due to many pre-commitments signed as early as 2023.
In 2025, approximately 100,000 m² of logistics and production space were added to the national stock in the first half of the year.
The Belgrade–Zagreb and Belgrade–Novi Sad highway axes concentrate a large part of the logistics parks, with areas like Dobanovci or Šimanovci, where the large VGP Park Belgrade project (nearly 487,000 m² of planned net lettable area) is being prepared, for example.
Free Zones and Incentives
The country has about fifteen officially recognized free zones (Apatin, Belgrade, Novi Sad, Subotica, Pirot, Kragujevac, etc.). These enclaves offer a particularly attractive package for industrial and logistics projects:
Main benefits offered by the free zone regime for established companies
Exemption from customs duties and VAT on goods entering or circulating in the zone
No customs guarantees required for foreign goods used in production
Complete freedom to repatriate profits without prior authorization
Simplified administration (one-stop-shop) and advantageous rents for warehouses and land
In 2015, about 240 companies employed over 22,000 people there; in 2022, more than 254 international companies operated there, with over 45,000 employees and a trade volume of around €6 billion.
Opportunities and Risks for Investors
The combination of growing stock, still competitive rents, and a generous incentive regime makes Serbian logistics a target for specialized funds, pan-European developers (CTP, VGP, etc.), and major tenants like Lidl or Nelt. For investors, the main points of attention concern the quality of local infrastructure (road access, utility connections), the strength of tenant covenants, and the legal security of land (titles, post-privatization ownership history).
Hospitality, Business Tourism, and Resorts: A Growing Segment
Serbia is also gradually positioning itself on the regional tourism map. Belgrade currently has 134 hotels, with 57% rated 4 stars, but the 5-star offer remains limited, despite several premium hotel projects. Occupancy rates peak in spring, driven by city breaks, cultural events, and growth in business and conference tourism.
International hotel groups (Hilton, Sheraton, Mama Shelter) are present in Belgrade. The renovation of the Sava Center, a large congress center, includes the creation of modern offices in addition to its event functions, thereby strengthening the city’s attractiveness for business tourism (MICE: meetings, incentives, conferences, exhibitions).
Outside the capital, mountain resorts like Kopaonik, Zlatibor, or Vrnjačka Banja are seeing a proliferation of aparthotel and tourist residence projects, often sold off-plan to individual investors. Studies suggest an investment horizon of between 8 and 12 years for this type of product when management is entrusted to a professional operator.
Novi Sad: Second Hub, Regional Showcase for Tech and Retail
While Belgrade dominates, Novi Sad is establishing itself as a second market not to be overlooked for commercial real estate. The second-largest city in the country (about 400,000 inhabitants), it benefits from a strategic location on the Danube, 80 km from the capital and close to the EU border (Hungary, Croatia, Romania).
Economy and Infrastructure
A former industrial city, Novi Sad has repositioned itself as a university, cultural, and technology center. The local campus hosts over 45,000 students, generating a yearly flow of young graduates in engineering, computer science, and applied sciences. This base fuels the growth of a startup ecosystem, IT companies, and shared service centers that drive demand for offices, coworking, and housing.
Novi Sad benefits from excellent multimodal connectivity: river port on the Danube, highway access, high-speed rail link to Belgrade (under an hour), and proximity to Nikola Tesla Airport. Furthermore, Serbia’s free trade agreements (CEFTA, Russia, EAEU, preferences with the EU and USA) offer the city’s exporters duty-free access for many products to a potential market of nearly one billion consumers.
Industrial and Logistics Zones
Novi Sad has several structured business zones: the “North” work zone, dedicated to production with fully serviced land, and especially the Novi Sad Free Zone, located within the port complex. The latter is one of the country’s four major free zones and allows operations without VAT or customs duties on import/export operations, attracting export-oriented industrial projects.
Industrial parks like CTPark Novi Sad and CTPark Novi Sad East, developed by an international operator, offer modern buildings for logistics and light production.
Retail and Offices in Novi Sad
In the retail segment, the city has acquired its first Western-style shopping center with Promenada (47,000 m² GLA), which has led to a reconfiguration of the local retail landscape. Before this opening, the modern retail stock stood at about 66,300 m², with a density of 194 m²/1,000 inhabitants. The arrival of Promenada and other projects has elevated Novi Sad to the level of comparable Central European cities in terms of commercial facilities.
The stock of modern offices at the end of the 2010s was about 85,000 m² of gross leasable area.
The arrival of Pupin’s Palace (offices + residential), the Science and Technology Park (nearly 19,000 m² of offices), and other mixed-use projects contributes to repositioning Novi Sad as a tertiary market where above-average rents can be justified for prime products, with yields still higher than in Belgrade.
Taxation, Transaction Costs, and Profitability
The Serbian tax framework presents several advantages for the real estate investor while requiring good preparation.
Taxation on Acquisition and Holding
New commercial constructions are subject to VAT at the rate of 20% on the first sale (10% for residential). Conversely, older buildings are subject to a 2.5% transfer tax on the market value. Professional investors, when buying as VAT-liable entities, can in some cases use the reverse charge mechanism for sales of real estate and construction services above a certain threshold, which limits the impact on cash flow.
Property tax is levied by municipalities, usually based on a cadastral or market value. For owners via a company (maintaining business accounting), the rate is capped at 0.4%. For individuals, the scale can be higher, up to 2% in some cases. Most commercial investments are therefore structured via companies to benefit from the capped rate.
Rental income received by a non-resident is in principle taxed at 20%, after deduction of standard expenses. For resident companies, net profit is taxed at 15%, with the possibility of carrying forward tax losses for five fiscal years.
Taxation on Disposal
The capital gain realized by a company on the sale of a property is taxed at the ordinary rate of 15%. For non-resident individuals, taxation on capital gains reaches 20%, unless a double taxation treaty provides for more favorable treatment. A mechanism for full exemption exists for properties held for more than ten years, and a reduction is possible beyond five years, encouraging a long-term holding strategy.
A specific tax relief exists for individuals who reinvest the proceeds from the sale of a property into the purchase of a personal residence, provided this operation is completed within a specific timeframe defined by law.
Transaction Costs and Net Yield
Overall, transaction costs related to acquiring a commercial asset (notary, lawyer, agent, taxes) are generally between 7.6% and 10% of the purchase price for the buyer, depending on the structure (new/old, presence of VAT, negotiated commissions). For a long-term investor, these costs are amortized fairly quickly if the property is leased under good conditions.
By combining gross yields frequently exceeding 8% on prime offices and retail and 8.5%‑9% on logistics or retail parks, and a corporate tax rate of 15%, the net yield remains competitive compared to most Western European or EU markets.
Major Trend: The “Green” Shift and the Rise of ESG Requirements
As elsewhere in Europe, the demand for buildings with high environmental and social performance is growing rapidly. On one hand, large international companies, particularly in IT, finance, or services, seek LEED, BREEAM, or WELL certified offices to attract and retain talent, reduce their operating costs, and comply with their ESG commitments. On the other hand, banks and financial institutions are more willing to grant credit to projects with sustainability certifications, even offering improved terms.
Number of LEED-certified office buildings in Serbia, representing less than 1% of the total real estate stock.
The example of the Ušće shopping center in Belgrade, LEED certified and designed with particular attention to indoor air quality and energy efficiency, illustrates the type of product that leases better, at higher rents, and attracts international brands.
For an investor, the challenge is no longer simply the relevance of environmental certification, but a precise cost-benefit analysis. This involves comparing the initial additional cost (construction premium and consulting fees) to the rental premium tenants are willing to pay for “green” offices and the potential added value upon resale. This assessment is all the more strategic as the Serbian market evolves: local regulations are gradually aligning with European directives (requirement for an “energy passport”, renewable energy bill project), reinforcing the future value of high-performance buildings.
How to Structure and Secure an Investment?
Even in a favorable context, investing in Serbian commercial real estate requires rigorous preparation.
Legally, verifying the cadastral situation is crucial: property titles, easements, mortgages, any potential disputes related to past privatizations. Notaries play a central role in authenticating contracts and filing registration documents with the cadastre. The complete purchase procedure, from signing a preliminary agreement (optional) to final registration, typically takes between 30 and 60 days, with the registration phase fluctuating around 5 to 15 working days.
Foreign investors often use local project companies to optimize taxation, facilitate financing, and allow for a sale via share transfer. Financing is available from Serbian banks and subsidiaries of European groups, in the form of construction loans, long-term loans, or refinancing. This financing is generally subject to ESG criteria, and its disbursement is phased according to project progress.
Finally, it is important to consider the “competition” from residential for land. The high profitability of residential development in Belgrade can lead some landowners to prefer selling their land for housing projects, which reduces availability for commercial programs and contributes to supporting office and retail rents.
Conclusion: A Market Still Catching Up, but Already on the Radar of Major Capital
Commercial real estate in Serbia is at a pivotal moment: sufficiently developed to offer institutional-scale opportunities, but still below saturation levels observed in other regional capitals. Belgrade shows low vacancy rates, rising rents, and attractive yields on offices and retail. Regional cities like Novi Sad, Niš, and Kragujevac are entering an expansion phase that opens a playing field for investors capable of working on a national scale.
The key advantages are clear: sustained economic growth, record flows of foreign investment, central logistical position, competitive taxation, and a relatively protective legal framework for investors. Risks exist – dependence on the European economic climate, financing costs, residential competition for land, the need to anticipate future environmental obligations – but they can be managed with adequate structuring, careful selection of locations, and increased attention to asset quality.
For an investor willing to venture off the beaten path of the EU, Serbia today offers a risk/return profile difficult to find in the more mature markets of Central and Western Europe. Provided one surrounds oneself with good local advice, integrates ESG criteria from the outset, and prioritizes well-positioned assets in Belgrade and major regional cities, the opportunities in Serbian commercial real estate are far from saturated – and could constitute one of the performance drivers for portfolios in the coming decade.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
