How do you assess Serbia’s real estate sector?

We have definitely seen an increase in construction activity, the market is reviving, and we have seen increased demand for construction. We have seen a lot of investment activity. The market remains challenging in terms of a lot of issues surrounding real estate, not just bureaucracy but the legal framework, the speed in which certain planning consents are being granted. For some larger projects in Serbia, one of the challenges is raising financing from the banks, especially if you talk about larger projects where inevitably they often can easily exceed the limits of the local banks. So there are a lot of challenges. Having said that, I definitely think that there is a space for the right product and we have seen a phenomenal performance of, for example, residential assets, we have seen a large activity across office market, we have seen progress on the retail side.

Where do you see room for the sectors improvement?

There has been progress in terms of procedural tasks; the system has to be adjusted to a more investor-friendly environment. It will take time, not just to adopt new practices like electronic issues on electronic planning etc., but also the mentality of the people dealing with investors and dealing with demands, requests, and needs of investors. Local authorities have to appreciate the amenities that local investors are giving to the public and take them into consideration when considering a certain project.

The local authorities of cities globally are constructive and business-oriented. These projects do more than employ the construction industry. Once the projects are open, they create work places, and a better profile for the city. They increase the value of the real estate, so there are a lot of direct and indirect benefits of large projects happening in Belgrade. We still lack for the local authorities to see us as partners in making our environment and our city a better place for all of us. 

What challenges does Delta Real Estate face in Serbia?

Delta Real Estate is one of the biggest real estate companies in the region and we specialize in asset classes, shopping malls and hotels. By this nature, we build dominant assets which are dominant by size, dominant in terms of the prime locations they have, and inevitably they cost a lot of money. Banks that operate locally have limits. Serbia’s image is a challenge; the moment our credit application goes beyond the boundaries of Serbia in the hands of somebody else deciding the destiny of the real estate project, then it becomes more challenging because that person is detached, does not necessarily understand the demands of the local market. We saw this in the financing of our EUR 200 million Delta Planet project.

What is Delta Real Estate growth strategy?

As a company, we want to increase our exposure across the region. We have already started to deliver on our strategy, which is to become more regionally spread when it comes to asset classes. Last year we completed our InterContinental Hotel in Ljubljana. Last year we also acquired the shopping mall in Bulgaria. We are actively looking in countries like Croatia, Albania, Kosovo, Macedonia, all those countries that probably are perceived as high-risk countries, we feel comfortable in. We would look into any market that makes business sense for us and provides a good enough return on our investment.

We are not specifically targeting hotels which are exposed to a season. We tend to remain within locations which are capital cities, business hotels. We do a very thorough marketing study, we go into the markets which are new markets, we identify the undeveloped markets where we will be pioneers and also markets where we can attract business guests. We focus on the conference aspect, on the business orientation of hotels, not just on the tourists.

How is Delta Real Estate aiming to improve Serbia’s real estate sector?

We strive for excellence. We perform and we deliver. We remain in the segment of dominance, so when we choose the projects they will always be dominant prime projects on prime locations, which is super important to us. I want to emphasize that as a company we are very well rounded as a real estate group. We have a full scale of people that operate in the real estate and I think this is something exceptional. Our ultimate goal is to develop, to construct the best assets for a particular location and provide the adequate return to the investors and to construct within a certain timeframe, as we always have challenging timeframes, and we always deliver on time.