Investment Opportunity in Downtown Belgrade?

Development

3 minute read

December 7, 2007

It took me all of one day in Belgrade to find a suitable property to add to my real estate portfolio.

Do I call this “undervalued,” or should I refer to this as a “fixer-upper”?

Whatever the case, this property is available for purchase… 

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Imagine walking down University Avenue in Toronto, and seeing a building with a massive hole blown out the side of it.

That’s what I encountered in downtown Belgrade while walking around this afternoon.

Belgrade is just like any other city, save for some subtle differences with respect to things like cleanliness, scenery, and the language.

But while walking down a busy main street, with cars passing by me, people walking in all directions, and the city “open for business,” I couldn’t help but notice that two buildings had massive holes in them, and nobody seemed surprised but me.

I later learned that these two buildings were bombed during the Kosovo War in 1999, and have yet to be….um….”repaired.”

Here is a brief and crude history lesson:

There are six countries to come out of the former Yugoslavia: Slovenia, Serbia, Montenegro, Bosnia/Herzegovina, Croatia, and Macedonia.

After the conflicts in the former Yugoslavia came to an end in the mid-1990’s, the Serbian government began to relocate Serbian refugees from all over Bosnia & Croatia within Serbia, more specifically, Kosovo, often expelling Albanian families from their own homes to make room for the Bosnian & Croatian refugees.

This clearly did not sit well with the ethnic Albanians within Kosovo, who subsequently formed into the Kosovo Liberation Army (KLA) and began employing guerrilla-style tactics against the Serbian government and civilians.

A “small” war ensued, during which 10,000+ ethnic Albanians and 3000+ Serbs were killed, and during which the United Nations, as well as the United States took interest and some level of control over the conflict.

The picture above of the two bombed-out buildings were strategic targets by the United States, and were bombed in 1999.  Four buildings were bombed, and all were government buildings such as as police stations and the army headquarters.  Apparently, no body was hurt.   But my cab driver from the airport tells a different story.

In the eight years since these buildings were bombed, no efforts have been made to repair, rebuild, or find some use for the land on which these buildings sit.  The Serbian government just does not have the money nor the resources to do anything with these buildings, and thus they sit in their current state.

I’ve been told that the buildings are for sale, and have been for some time.

The land on which they sit is “prime” by typical real estate standards, as the buildings are on a main street in the downtown business district.  Up the street, you’ll find the Canadian, American, Czech, Hungarian, and Chinese embassies, among others, and down the street you’ll find a few Serbian government offices.

I compare this area of Belgrade to University Avenue in Toronto.

Imagine what a half acre on University Avenue is worth today!

Now clearly, there are huge differences between Toronto and Belgrade, Canada and Serbia, and North America and Eastern Europe.  But perhaps on a long time horizon, say, 25 years from now, Serbia will be a world power, a thriving economy, and a huge tourist destination.

Maybe.

Maybe not.

But after Japan was bombed into the ground and nearly destroyed upon the completion of World War 2, they became an industrialized nation, and are now the worlds foremost maker of electronics.

Perhaps Serbia or other parts of the former Yugoslavia will find their niche, and a quarter century down the road, people will be saying “Wow….Imagine getting your hands on this land back when the country was war-torn?  What a deal!”

My eyes are often bigger than my appetite with respect to investment.

Clearly, I can’t afford to even think about the prospect of purchasing one of these buildings, but that doesn’t stop my mind from working the way it does.

I see opportunity.

And eventually, somebody with money, time, and an above-average risk tolerance will come along and purchase one or all of these buildings.

Maybe it’s a buy-and-hold strategy.

Or maybe they’ll build a luxury hotel, shopping mall, or office building.

I just can’t help but wonder if I’ll come back to Serbia with my kids in the year 2030, stay in a luxury hotel, and tell them “I remember coming here when this was nothing but a hole in the ground….”

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Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

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