Business Monitor International


Bosnia-Herzegovina Real Estate Report

Published 01 May 2014

  • 61 pages
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$1,295.00
Bosnia-Herzegovina Real Estate Report

BMI View: Although there has been an improvement in economic data from Bosnia, with the country returning to growth in 2013 on the back of strong manufacturing and exports, the commercial real estate sector continues to be affected by low demand and high vacancy rates.

However, over the long term there is significant potential in the market, which is one of Europe's relatively few untapped real estate markets. We believe that in the longer term interest from international retailers, manufacturers and real estate developers will lead to the development of the market. As consumer spending rises and unemployment falls, considerable demand for modern retailing should develop, and as transport and other infrastructure projects make trade and logistics easier, we see significant scope for the development of industrial real estate.

However, there are downside risks to this optimistic long-term picture. The political situation is unstable, and there are difficulties in operating across Bosnia's two administrative areas, the Federation of Bosnia & Herzegovina and the Republika Srpska. Meanwhile, governmental paralysis means important reforms are not being undertaken, leading to criticism from the EU.

Rental rates across the board tend to be higher in Sarajevo, the capital city and economic hub of the country. However, we note that a number of retail developments in the city are still suffering from vacancies, and our in-country sources point out that interest from international firms has waned.

The real estate sector as a whole has been seeing increasing investment from the Middle East, however. Notably the Sarajevo City Centre shopping mall was built by a Bahraini and Saudi Arabian joint venture (JV).

We have given Bosnia a score of 50.9 out of 100 in our Real Estate Risk/Reward Ratings for Central and Eastern Europe. The country benefits from a good industry-specific longer term risk profile, but its score is dragged down by a very poor country risk outlook, at only...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Office
15
Table: Forecast Office Rents, 2014 And 2015 (USD per m2/month)
15
Table: Forecast Office Net Yields, 2011-2018 (%)
16
Retail
16
Table: Forecast Retail Rents, 2014 And 2015 (USD per m2/month)
16
Table: Forecast Retail Net Yields, 2011-2018 (%)
17
Industrial
17
Table: Forecast Industrial Rents, 2014 And 2015 (USD per m2/month)
17
Table: Forecast Industrial Net Yields, 2011-2018 (%)
18
Construction And Infrastructure Forecast Scenario
18
Table: Construction And Infrastructure Industry Data (Bosnia-Herzegovina 2012-2017)
18
Table: Construction And Infrastructure Industry Data (Bosnia-Herzegovina 2018-2023)
19
Macroeconomic Forecasts
22
Economic Analysis
22
Table: Bosnia-Herzegovina - Economic Activity
27
Industry Risk Reward Ratings
28
Central And Eastern Europe - Risk/Reward Ratings
28
Table: Central And Eastern Europe Real Estate Risk/Reward Ratings
28
Bosnia & Herzegovina Risk/Reward Ratings
29
Risks
29
Rewards
29
Market Overview
30
Office
33
Table: Historical Rental Costs, 2012-2014 (USD per m2/month)
34
Table: Net Yields, 2012-2014 (%)
35
Table: Terms Of Rental Contract/Leases, H213
35
Retail
36
Table: Historical Rental Costs, 2012-2014 (USD per m2/month)
37
Table: Net Yields, 2012-2014 (%)
37
Table: Terms Of Rental Contract/Leases, H213
38
Industrial
39
Table: Historical Rental Costs, 2012-2014 (USD per m2/month)
40
Table: Net Yields, 2011-2014 (%)
40
Table: Terms Of Rental Contract/Leases, H213
41
Competitive Landscape
42
Company Profile
44
BBI Real Estate
44
Delta Real Estate Group
46
GP Put dd Sarajevo
48
Strabag
49
Demographic Forecast
51
Demographic Outlook
51
Table: Bosnia & Herzegovina's Population By Age Group, 1990-2020 ('000)
52
Table: Bosnia & Herzegovina's Population By Age Group, 1990-2020 (% of total)
53
Table: Bosnia & Herzegovina's Key Population Ratios, 1990-2020
54
Table: Bosnia & Herzegovina's Rural And Urban Population, 1990-2020
54
Methodology
55
Industry Forecast Methodology
55
Sources
56
Risk/Reward Ratings Methodology
56
Table: Real Estate Risk/Reward Ratings Indicators
58
Table: Weighting Of Indicators
59

The Bosnia-Herzegovina Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Bosnia-Herzegovina Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Bosnia-Herzegovina.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Bosnia-Herzegovina to test other views - a key input for successful budgeting and strategic business planning in the Bosnian real estate market.
  • Target business opportunities and risks in Bosnia-Herzegovina through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc