BMI View : Low demand and high vacancy rates characterise the Bosnian commercial real estate market. Occupier and investor activity is expected to remain subdued in the short term, but the long-term outlook is more positive. Given the sector's potential for growth and development we believe there will be greater interest from international and regional occupiers, developers and investors in the years ahead .
Economic growth is expected to accelerate to 2.8% in 2016 and 3.2% in 2017, reflecting recovery in consumer confidence and improved exports. Overall, GDP growth is forecast to average at 3.0% a year between 2016 and 2019.
In the office sector, stronger economic performance is likely to feed through to higher occupier demand and we expect market fundamentals to improve. Demand for space will be particularly driven by growth in the output of the tertiary services sector, but this will be gradual, with most of the improvement taking place from 2017 onwards as the expansion of the service sector accelerates.
In the retail market household spending should underpin growth in retailers' requirements for space. Lower commodity prices and deflation will support higher levels of private consumption in 2016, while in the medium term falling unemployment, higher wages and higher domestic demand will be the driving force for the market. The rise in demand for space will drive rental rates up, particularly since supply is likely to remain limited in the absence of new development. The retail real estate sector is under-developed and there is scope for expansion, especially in terms of developing shopping malls.
We expect growth in both exports and imports from 2016. Manufacturing output is also forecast to strengthen over the medium term. Consequently, we believe demand for warehouse and distribution space will grow.
With no development activity currently taking place, vacancy rates in all three markets are likely to fall in the face of higher occupier demand in the medium term and this should stimulate rental growth. Although the long term picture is positive, Bosnia's potential for job creation and economic prosperity is likely to continue to be constrained by structural problems and political risks, which affect investor confidence and the level of foreign investment. Government reforms should improve the investment and business climate and encourage higher flows of capital, but heavy regulation and bureaucracy as well as political risks means that progress will be slow.
The Bosnia-Herzegovina Real Estate Report features BMI Research'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.
- 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).
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.
Industry Forecasts Outlook
Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.
- 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 (USD per square metre and local currency per square metre).
- Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
- economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).
BMI’s Real Estate Risk Reward Index
BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
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
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.
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.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.