Bosnia-Herzegovina Real Estate Report Q3 2011
Business Monitor International, May 2011, Pages: 55
Business Monitor International's Bosnia-Herzegovina Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bosnia-Herzegovina's Real Estate industry.
Bosnia’s real estate sector has suffered from a lack of integration in recent years compared with regional peers in Central and Eastern Europe (CEE). Despite this the first signs of recovery are appearing, driven by a stabilisation in prices in the capital, Sarajevo. Following near double-digit growth in the early 2000s the country has seen a steep decline in recent years and is likely to remain weak for some time to come. Some of the key drivers of our forecasts include:
?? A fall in rental rates and high vacancy rates has brought prices to market-clearing levels. In spite of new commercial property being made available in Sarajevo (with our sources speaking of new supply amounting to 150,000m2 in 2010 and 2011) there are signs of return to a demand-led market.
?? Relative to early 2010, rentals have risen in all sub-sectors in Sarajevo and Zenica although not, apparently, in Trebinje. Demand for commercial real estate is picking up; however, we strongly suspect that the scrapping or postponement of projects – which has curtailed supply – has also been a contributing factor.
?? A sharp rise in net yields in the Trebinje industrial sub-sector has led to a change in some forecasts. Yields rose from 6-8% in the first half of 2010 to 9-10% in the second half of 2010. As rents were more or less unchanged this indicates that capital values must have fallen. For much of the past two years, the Trebinje industrial sub-sector is the one about which our in-country sources have been most optimistic.
?? Saudi Arabian developer Shiddi International officially opened the newly rebuilt four-star Bristol Hotel in Sarajevo, Bosnia & Herzegovina. The firm invested EUR30mn (US$43mn) in the reconstruction of the hotel, which has 186 luxury rooms and 12,500m2 of meeting space. The hotel was launched for the Sarajevo Business Forum event.
The formation of a new government will remain the hot topic in 2011 for Bosnia. So far only the Republika Srpska has cobbled together a cabinet, with the Muslim-Croat Federation and central administration still yet to install new governments. Even when a new power-sharing agreement is reached, we warn that political reforms will remain piecemeal given that the presidential and parliamentary elections left the political landscape still divided along ethnic lines.
Executive Summary
SWOT Analysis
- Bosnia & Herzegovina Real Estate/Construction SWOT
- Bosnia & Herzegovina Economic SWOT
- Bosnia & Herzegovina Business Environment SWOT
Real Estate Market Overview
- Table: Bosnia & Herzegovina’s Real Estate Market – Rentals, 2009 And 2010 (m²/month, EUR)
- Table: Bosnia & Herzegovina’s Real Estate Market – Net Yields, 2010 And 2011 (%)
- Table: Bosnia & Herzegovina’s Real Estate Market – Terms Of Contract/Lease
- Table: Bosnia & Herzegovina’s Real Estate Market – Indicated Vacancy, Mid-2010 (m2)
Industry Forecast Scenario
Real Estate Outlook
- Table: Bosnia & Herzegovina’s Real Estate Market – Rentals, 2010-2012 (m²/month, EUR)
- Table: Bosnia & Herzegovina’s Real Estate Market – Forecast Net Yield (%)
Construction And Infrastructure Outlook
- Table: Bosnia’s Construction Industry Data And Forecasts, 2007-2015
- Table: Bosnia’s Construction Industry Data And Forecasts, 2012-2020
Bosnia’s Macroeconomic Outlook
- Table: Bosnia & Herzegovina – Economic Activity , 2008-2015
Business Environment
Real Estate/Construction Business Environment Ratings
- Table: Europe Real Estate/Construction Business Environment Rating
Bosnia’s RECBER
Central And Eastern Europe Infrastructure Project Finance Ratings
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
Bosnia's Business Environment
- Table: BMI’s Business And Operation Risk Ratings
- Table: BMI’s Legal Framework Rating
- Table: Labour Force Quality
- Table: Annual FDI Inflows Into Central And Eastern Europe
- Table: Trade And Investment Ratings
- Table: Bosnia & Herzegovina ‘sTop Export Destinations, 2000-2008 (US$mn)
Company Profiles
- Delta M Group/Delta Real Estate
- GP Put dd Sarajevo
- Strabag SE
- TriGranit Development Corporation
- Vranica dd Sarajevo
BMI Methodology
- How We Generate Our Industry Forecasts
- Construction Industry
- Bank Lending
- Real Estate/Construction Business Environment Rating
- Table: Weighting Of Indicators
- Project Finance Ratings Indicators
- Table: Design And Construction Phase
- Table: Commissioning And Operating Phase – Commercial Construction
- Table: Commissioning And Operating Phase – Energy And Utilities
- Table: Commissioning And Operating Phase – Transport
- Sources
- Delta M Group/Delta Real Estate
- GP Put dd Sarajevo
- Strabag SE
- TriGranit Development Corporation
- Vranica dd Sarajevo
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