Vedrana Likan, director at Colliers - BiH has a strong potential for a logistics center due to its favorable geographical location

On the BiH real estate market, the most activity is realized in the housing sector, with the highest demand in urban areas such as Sarajevo, Mostar and Banja Luka. In the commercial real estate sector, there is a significant potential for development in the hotel and logistics market, Vedrana Likan, director at Colliers Croatia, Slovenia and Bosnia and Herzegovina, pointed out at the beginning of the interview for eKapija.

- Tourism is a growing industry in BiH, but international hotel brands are poorly represented on the market. By 2026, the hotel offer should be expanded with two new Hilton hotels - one in Sarajevo and one in Mostar - which will mark the entry of the Hilton brand on the BiH market. The modernization of the transport infrastructure is an important prerequisite for further development of logistics.

- At the same time, it is expected that the current status of a candidate country for membership in the European Union will have a positive effect on the economy through pre-accession funds and reforms required for accession to the European Union.

- The subject of taxation of empty real estate is relevant in neighboring Croatia as well. The idea of the tax policy is to encourage owners to sell or rent vacant real estate, which would, in an ideal scenario, increase the supply of real estate on the market. However, the real estate tax as an isolated measure that is not part of the overall tax reform and housing strategy cannot be sufficient for regulating and stabilizing the housing market. On the other hand, such topics and discussions in the public space are stimulating because they indicate that the problem of housing is being thought about and that efforts are being made to find a solution to increase the supply of housing and housing affordability.

From the buyer`s point of view, let`s not forget that high inflation in recent years has also affected demand, since some citizens have decided to buy residential real estate in order to preserve the value of their property in conditions of high inflation.

The fact that a large number of apartments are sold while still in the construction phase indicates a high demand, and the question arises of how to respond to the obvious disparity between supply and demand and accelerate the arrival of more square meters on the market.

- It is always ungrateful and risky to project the price movement of residential real estate because the price depends on several factors, such as the pound, demand, location, macroeconomic conditions, prices of construction plots, materials and labor. A price correction is possible for residential real estate that is less attractive and overpriced, but in the near future we do not expect a drastic drop in the prices of new construction in major cities.

- The economy of Bosnia and Herzegovina faces challenges due to the disunited internal market and a significant share of the gray economy. In such a macroeconomic environment, the biggest challenge for investors is the perceived risk of the country, which is why the commercial real estate sector of Bosnia and Herzegovina is still an underdeveloped market.

Considering the market size and the investment opportunities, which average between EUR 5 and 15 million, BiH is more attractive to regional and local investors compared to the big global players. Among foreign investors, the most active investors on the market are those from the Middle East. BiH still has a long cycle of investing in the commercial real estate market, which should not be seen as a weakness, but as an opportunity for growth, development and strengthening of the business environment in the country.

- The most promising areas for investments are Sarajevo and its surroundings due to its status as the capital, and Banja Luka, as the main center of Republika Srpska. Also, Mostar has development potential due to its favorable geographical position and increasing tourist attractiveness.

- Colliers has been present on the Croatian market for 20 years now, and based on our long-term experience in Croatia, as well as our presence on the BiH market, we can conclude that the Croatian commercial real estate market is more developed. We do not notice as a rule that once an investor or developer enters the Croatian market, expansion into the market of Bosnia and Herzegovina follows quickly.

For example, logistics is currently a very propulsive and fast-growing sector in Croatia. In Bosnia and Herzegovina, the logistics sector has not yet experienced such expansion as in Croatia, although BiH has a strong potential to establish itself as a logistics center due to its favorable geographical position. However, in order to achieve this, several key preconditions must first be met, primarily the modernization of the road and railway infrastructure. Therefore, we can say that the trends from Croatia to Bosnia and Herzegovina are generally transferred to a limited extent and with a time lag.

- Although green and sustainable construction projects on the real estate market in BiH are still in the early stages of development, there are visible moves in that direction. Namely, today global companies looking for premises for lease expect highly energy-efficient buildings, and real estate owners should strive to offer such properties on the market. Therefore, the increased interest in energy efficiency and environmental sustainability is gradually coming into focus during the development of new projects. In addition to the development of new projects, ways to improve existing properties will be sought in order to become more energy efficient and sustainable.

On the other hand, meeting environmental standards can be an expensive process, which could be a challenge in markets like BiH, where smaller business entities are often price sensitive and face significant budget constraints in business. For this reason, it will be necessary to find a balance between cost-effective solutions and meeting the growing regulations and trends related to sustainability.