Chris McLernon, executive director of Colliers International for the EMEA market - "Nearshoring" as a great development opportunity for Serbia

(Chris McLernon)

Over the last 15 months, big investors have been investing their money in commercial and residential facilities in more than 40 cities world wide, including London, Paris, Berlin, Madrid, Barcelona, Hong Kong, etc. The new trend in the real estate sector is a logical and expected consequence of the global economic crisis, as well as some recent events on the global scale, which urged investors to think about safe investment destinations and projects that would maintain the initial value. Belgrade is not yet on any of the maps used by big players and they find this whole region an underdeveloped zone with a significant potential, but their focus is currently on the markets they know very well, Chris McLernon, the Colliers International executive director for the markets of Europe, Middle East and Africa (EMEA), says at the beginning of an interview for eKapija.

- Large institutional investors are currently not looking in the direction of Serbia, but cities and countries that I've mentioned and that represent "hot" markets at the moment. It should be noted that the premiums, that is, profits from such investments are not big and that they pose an alternative to saving in banks. However, the increased demand of investors for the central city zones will affect the real estate markets in the world capitals. An example is London where the prices of apartments in its premium parts are now rising. Investors are usually people from Asia because they have a plenty of available capital to invest. We should also not forget the U.S. and German funds, as well as companies from the Middle East seeking a "place" for keeping their money - McLernon explains.

He also says that he sees increasingly popular "nearshoring" of large companies, a geographically closer variant of "off-shoring", as one of the prospects of Serbia and the opportunities for the real estate market development in our country.

- "Nearshoring" is actually the "outsourcing" of all those services and activities that a company can easily entrust to another company that would do that job for less money. I think that Serbia has high-quality and educated manpower and that countries from western Europe can significantly benefit from "relocating" part of its operations to this country, to a mutual benefit.

No changes in real estate market in Serbia after the fall

Asked to comment on the recovery of the real estate market in Serbia, director of the international company Colliers for the EMEA market replies that we are currently at the end of a decline trend, which should be followed by a stabilization period.

- The stabilization phase may take a while, which primarily depends on events in the local market, supply and demand, as well as general circumstances in the country. Colliers is implementing several interesting projects in all segments of the real estate market in Serbia, and some of them have not been completed yet due to temporary freezing of investments and somewhat stricter terms of financing. I do not have even the slightest doubt that the implementation of all these projects will be resumed and finished according to earlier plans. Also, I don't think that we will again have the same situation as in 2007 and 2008 when the demand was much higher than the supply, while funding terms were much more favorable. That is why we hope for smart prices, the ones that suit the quality of products they offer, and by "they" I mean all sectors. It is important to avoid irrational construction, that is, the one exceeding the needs of Belgrade as a city with two million inhabitants, which is why experienced and rational consulting services are necessary for investors, enabling the consideration of all needs of the market and the investor and the creation of a quality and optimized project on such basis.

McLernon explains that an additional problem caused by the global economic crisis is that it was the first time for many leaders, who were in the leading positions at companies at that moment, to face problems of a different type.

- They simply did not know to react quickly and foresee the next steps because they did not understand either recession or the crisis that hit the economy. I have already experienced similar situations in Latin America, that is, Mexico, in 1995 when the business just "collapsed". I am familiar with the situations in which people are afraid of making risky moves and consider each option for a long time. Operations in the real estate sector have their ups and downs, good and bad cycles, and that is nothing new. As early as in spring 2008 we "smelled" the crisis and told our partners and the business community we operated in that it was coming. However, people were first saying that the crisis was a problem of the USA, but when the wave spread to western Europe, it became a problem of western Europe. During all that time, I was repeating - it's a global problem and we will all feel it so we must react immediately and make important, strategic decisions faster.

Mr. McLernon also stresses that Colliers has not been closing its offices around the world and that a special effort was put into providing clients with both top-quality services they got used to and concrete and timely information, based on which they would be able to make quality decisions.

- We have an excellent portfolio and we managed to keep it even at the time when the real estate market was facing a big problem.

Energy-sustainable construction is inevitable

More and more frequent construction of "green" facilities that are energy-sustainable confirms the forecasts that this long-present trend will cease to be an option and become a condition for the construction.

- I am sure that investors will not be able to sell facilities that are not "green" in five or six years. What speaks in favor of that is the information that many banks and other financial institutions in the west offer special benefits for the energy efficient construction. Considering the situation in the Serbian market, I can also see a significant progress in that direction when compared to the period from two years ago because the number of smart energy-saving buildings is growing. Of course, it is necessary to educate the market, investors and future buyers - McLernon concludes.

T.S.