INTERVIEW - Israeli Property Developer Big CEE Targets Leadership of Serbia's Discount Retail Park Market

“We are bringing a concept here that is in a way new and it makes sense. We are hoping to be the market leader of this concept in Serbia, [...] the only place in South East Europe that can have a significant growth," the director of the company’s Serbian unit, Robert Yahav, told SeeNews in an interview.

He added the company is aiming to capitalise on Serbia’s under-developed retail market that encourages high prices and thwarts bargain hunting.

“The retail activity in Serbia is not developed at all. The idea is here but why is it that at the end of the day everyone here is paying more for everything, from milk to bread to clothing?”

Brand owners will be able to rent space in Big CEE discount retail parks at half the cost compared to shopping centres across Serbia, which will result in lower price tags, Yahav said. According to him, no more than 10% of the population in Serbia can afford current prices at the existing shopping centres but these centres are full because there is no competition.

"I believe personally that this kind of concept should have been introduced here earlier but the recession has slowed down the progress of many activities, including ours. Countries in the region already have this concept.  When you look at Bosnia, you can build two, maybe three, maybe four centres."

The company launched the construction of a 50 million euro ($71.6 million) discount retail park in Serbia’s northern town of Novi Sad in November. The facility, featuring 32,000 square metres of retail space and 60,000 square metres of free parking area, is slated for completion by the end of 2010. It is part of Big CEE’s 500 million euro investment programme for the Balkan country that has in the pipeline 10 retail parks to be built in the outskirts of major cities over the next five years.

“I would assume that cities like Belgrade and maybe Nis can be suitable for this size. The other cities are suitable for projects of retail space of 10,000 to 15,000 square metres sitting on a plot of land of 30,000 to 45,000 square metres,” he said, adding that the company plans to build the centres next to main roads near points of access to the cities.  

With its population of 250,000 Nis, in southern Serbia, is the country’s third largest city after the capital Belgrade and Novi Sad.

“We didn’t come to Serbia to build one centre. For one centre we would not have come,” Yahav said.

“Our philosophy is to go to cities of some 80,000 to 120,000 people, not in the city itself but the nearest surroundings.”

Serbia's retail market is expected to start picking up in the spring of 2010, allowing retailers to renew their expansion plans and consider projects that are in the pipeline or in the final stages of construction, real estate consultants Colliers International said in a market overview in September.

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