New regulations in Serbia in the area of real estate, specifically on the development of construction land, can be considered a step in the right direction and should contribute to legal certainty and predictability of the business environment.
JPM recently provided full legal and transactional support to Delta Real Estate and Hemslade Trading Limited during negotiations and closing of EUR mil 202,7 transactions relating to sale of Delta City Shopping Mall (Belgrade, Serbia) and Delta City Shopping Mall (Podgorica, Montenegro). JPM is taking part in several other major real estate transactions, as well as in real estate development projects, such as construction of the first IKEA department store in Belgrade, acquisition of new locations for the Lidl supermarket chain, and a development project for another shopping chain in Belgrade.
Large transactions serve as an incentive for other investors in Serbia and the region. High-value transactions confirm that investing in Serbia pays off. Such transactions are a clear indicator that investments are cost-effective for investors who invest in development projects and generate leasing income from newly constructed buildings, as well as that buying real estate for leasing will also reap benefits.
Foreign investors are typically prepared to accept the differences between regulations in their home countries and regulations in Serbia. Before making investment decisions foreign investors generally gather information on doing business in Serbia, which includes analysing regulations in relevant field. Investment decisions are then made based on such gathered information.
Regarding real estate transactions, the regulations in Serbia are not markedly different from regulations in other countries, particularly the EU countries. As an existing obstacle, there are at times slow procedures and absence of the public authorities’ liability for administrative delays. However, the risk management of these transactions and forward planning can ensure that a transaction is profitable for an investor.
Over the past several years investors and builders have more and more frequently been applying FIDIC contracts on construction, design and consulting services. The application of FIDIC contracts in Serbia particularly suits foreign investors who feel more secure when concluding construction contracts since they are mostly familiar with the terms of FIDIC contracts and know the effects of these terms.
On the other hand, the particularities of Serbian law demand that certain terms of FIDIC contracts be amended, supplemented or excluded, and frequent changes of laws and regulations also require frequent adjustments of certain terms of FIDIC contracts. To that end JPM has a team of attorneys at law with in-depth knowledge of the issue of FIDIC contracts, who can therefore provide clients with timely, high-quality legal service.