International market chains fill their storage facilities - What is the situation in Serbia's logistics sector?

Despite the fact that all parameters indicate that Belgrade could be the logistics center of the region, our country still lags behind surrounding countries. Serbia has a total of 655,000 square meters of logistics space, such space in Bucharest spans one million square meters, while its surface in Hungary has reached 1,806,350 square meters.

The primary reason for not so good situation in the field of logistics is definitely a financial crisis, while other reasons include a poor infrastructure, complicated procedures and the stagnation of economic activities.

This was agreed upon by participants in a panel discussion entitled "State of the Development of Logistics/Distribution of Industrial Facilities in Serbia and the Region," which was organized as part of the real estate expo REBEC in Belgrade. The panelists were: Trimo CEO Branka Mavretic, Kuehen+Nagel CEO Sasa Radosavljevic, Project Development Manager at the company Stipic Ivan Brezetic and Logistics Manager at Gebruder Weiss Dejan Spasojevic, while the moderator was Sinisa Dadic from the company Jones Lang LaSalle.

One could hear at this panel that the economic crisis and a low level of economic activities contribute the most to the situation in the logistics industry. Citizens' low purchasing power affects the revenues of market chains, and then the crisis overflows to logistics providers and puts pressure on them to decrease the prices.

As it was said, even modern storage facilities that meet all world standards and offer easy handling of goods are no longer a guarantee that clients will choose them.

- Despite the quality of a storage facility and its compliance with standards, the price remains the decisive factor.

(logistics space development in Belgrade)

When asked what Serbia should do on the institutional level to utilize the geographic potential to boost the country's logistics and distribution capacity, the panelists were unanimous in their response.

- It is necessary to establish clear procedures and standards to be respected by all, thus creating a predictable situation. Among the obstacles to investors and those operating in this branch are also complicated bureaucracy, corruption and high taxes - one could hear at the panel.

Dejan Spasojevic, logistics manager at Gebruder Weiss, says for our web portal that the state should edit, reduce and accelerate customs procedures, which would result in a decrease in the prices of logistics services.

However, according to analyses performed by the consulting company Jones Lang LaSalle, things may improve when large international market chains arrive in Serbia.

Sinisa Dadic, CEO of Jones Lang LaSalle Croatia, says for eKapija that Serbia has not yet lost a chance to become a regional leader.

- Development of logistics services greatly depends on the situation in the domestic market. There is room for progress. If we draw a parallel and compare Belgrade to similar cities in surrounding countries, I believe that you require about one million square meters of modern storage space.

The arrival of international market chains and brands in our country is also expected by the Croatian company Stipic, which plans to invest with its partners in a modern logistics center in Serbia.

- We have an idea and are now conducting a market research in Serbia, where we are looking for local partners. We do not want to act alone, but in cooperation with Serbian companies that know the market, procedures and the ways of doing business in your country - says Ivan Brezetic from the Project Development Sector at the company Stipic.

When asked why they have chosen our country, Brezetic replies:

- The market of Serbia is bigger than the one in Croatia, the real estate sector is not developed enough, and investments in shopping centers are yet to come. A consequence of all that is the construction of logistics centers.

As he says, project development costs are lower in Serbia, meaning that the rent as well will be lower, which will attract larger number of clients.

- Zagreb has 6-7 shopping centers, while Belgrade has only two, and it should have twice as many as Zagreb has.

(retail stock evolution in Zagreb)

- If we rely on experiences from Europe and rest of the world, where companies focus on their core business, logistics services are entrusted to professionals. This is also done by foreign companies in Serbia, and a growing number of domestic companies are also deciding to hire logistics providers, mainly after learning from their own mistakes - Sasa Radosavljevic, director of Kuehen+Nagel, says for eKapija.

Prices in the region

According to a research done by Jones Lang LaSalle, rents for a storage space in Serbia are on the same level as the ones in Croatia, where they reach about EUR 6 per square meter a month. The rent in Hungary amounts to 3-4 euros per square meter in suburbs and 4.5-5 euros per square meter in attractive locations, while the rent in Bulgaria amounts to EUR 3.75 per square meter.

M.K.