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Macedonia
Real Estate Market Report 2010
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www.investinmacedonia.com
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C o n t e n t s :
Introduction 5
Macroeconomic stability 5
Foreign direct investments 6
Legal aspects 6
Real-estate market summary 9
Of ce market 11
Retail market 16
Residential market 19
Industrial market 23
Hotel market 25
KOS
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Greek coast line ~ 100km
Athens ~ 560km
Greek coast line ~ 100km
Athens ~ 553km
Thessaloniki ~ 69km
Albanian
coast line ~ 150km
Tirana ~ 109km
Bulgarian coast line ~ 700km
Turkey ~ 650km
France ~ 1700km
Germany ~ 1500km
Italy ~ 1200km
Austria ~ 1000km
Belgrade ~ 389km
Serbia
Greece
A
l
b
a
n
i
a
Bulgaria
M3
M1
M4
M4
M4
M1
M5
E75
E65
E65
E65
E75
TIDZ Skopje
TIDZ Skopje 2
TIDZ Tetovo
TIDZ Stip
C
o
r
r
i
d
o
r

8
Corridor 8
C
o
r
r
i
d
o
r

1
0
C
o
r
r
i
d
o
r

1
0
C
o
r
r
i
d
o
r

1
0
Kumanovo
Skopje
Stip
Veles
Gostivar
Tetovo
Ohrid
Resen
Struga
Debar
Bitola
Prilep
Strumica
Kocani
Kicevo
Krusevo
Demir
Kapija
Sveti
Nikole
Radovis
Negotino
Kavadarci
Kratovo
Kriva
Palanka
Berovo
Capital City
International Border
Multi-lane Undivided Highway
Multi-lane Divided Highway
Larger City
Smaller City/Town
Airport
TIDZ
Land
Water
Legend
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INTRODUCTION
The Republic of Macedonia is a sovereign republic with multi-party parlia-
mentary democracy that got its independence in 1991. The country is rapidly
advancing on the path of political and economic reforms towards strength-
ening its democratic society and its open market economy. The result is po-
litical and macroeconomic stability providing much room for growth, espe-
cially in the area of the real estate market.
Macedonia is an emerging and relatively unexplored real estate investment loca-
tion in South-East Europe. The recently initiated investments send a clear mes-
sage about the growing attractiveness of the Macedonian real estate market.
The promising potential of this market is primarily based on the stable economy,
the strong FDI forecast, as well as the steady trend of growing demand, particu-
larly visible in the residential and of ce market, and the relatively high yields.
Macedonia is an EU and NATO candidate country and drawing on the expe-
riences of the neighbouring countries that relatively recently joined NATO,
a huge boost on the real estate market demand side is expected, therefore
fostering the proftability prospects. The new Law on Construction Land,
which provided further liberalization of the real estate market in Macedonia
for foreign companies and citizens, is an additional impetus for accelerated
development of this market.
MACROECONOMIC STABILITY
The economic performance of the Macedonian economy improved consider-
ably prior to the global economic crisis, as a result of a strong record of mac-
roeconomic stability and prudent macroeconomic policies. While growth in the
frst half of the decade was below regional averages, real GDP expanded more
vigorously between 2005 and 2008.
The country weathered the global crisis relatively well, which is confrmed by the
optimistic forecast for 2010 for an expected annual growth of the economy of
about 2%, benefting from continued fscal expansion, improving demand and
carefully managed monetary policy. The expected growth of the economy for
2010 is among the highest of the SEE countries.
Closer relations between Macedonia and the European Union, as well as the
strong commitment of the Government to implement necessary structural re-
forms, are expected to give an impetus to economic growth in the medium-run,
forecasted at 4-6%.
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2005 2006 2007 2009 2008
Source: National Bank of the Republic of Macedonia, State Statistical Of ce
Real GDP growth (%) 4.1 4.0 5.9 5.0 -0.7
Annual infation (%) 0.5 3.2 2.3 8.3 -0.8
Export (EUR million) 1,643 1,914 2,472 2,684 1,921
FDI (USD million) 97 424 699 587 252
Unemployment rate (%) 37.3 36 34.8 33.9 32.2
MKD/1 USD 49.3 48.8 44.7 41.9 44.1
MKD/1 EUR 61.3 61.2 61.2 61.3 61.3
FOREIGN DIRECT INVESTMENTS
With the governments continued drive towards improving the business climate, and
its stable economic and political climate, Macedonia has become one of the most
attractive investment destinations in Europe, which together with several free trade
agreements, allows the Macedonian economy free access to a market of over 650
million consumers, making it a highly competitive production and export platform.
FDI has been on an upwards trend ever since 2004. The worldwide economic cri-
sis has resulted in a signifcant decrease in investment fow in 2009, but the frst
months of 2010 have shown signs of restoration of the previous investor interest.
As a result of the growing interest in Macedonias investment potential, a number of
international companies have started operations in the country, both as Greenfeld
projects and through diferent types of asset acquisition and privatization.
Probably the best illustration for the strides of the government for providing fa-
vourable investment environment is the opening of the Johnson Mattheys GBP
34 million emission control catalyst plant in Macedonia in April 2010.
Other signifcant foreign investors include T-mobile (Germany), EVN (Austria),
Mobilkom Austria (Austria), Societe Generale (France), Johnson Controls (USA),
the National Bank of Greece (Greece), Hellenic Bottling Company S.A. (Greece),
QBE Insurance Group Limited (United Kingdom), Mittal Steel Holding N.V. (Neth-
erlands), Duferco Lugano (Switzerland), Titan Group (Greece), Industrial Building
Corporation (Israel), Agrokor (Croatia), Tus (Slovenia), Aquapura (Portugal), and
Verouplos (Greece).
LEGAL ASPECTS
According to the Law on Construction Land (2008), both foreign and domes-
tic companies and individuals can acquire property in Macedonia.
The land plots can be private or state owned, and zoned either as construc-
tion or agricultural land.
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Construction land in private ownership is subject to debenture and owner-
ship acts, and it can be sold and bought through direct settlement between
the selling and the buying party.
State owned construction land can be alienated through a public tender
procedure. Minimum bidding prices are set by the Ministry of Transport and
Communications in compliance with the Construction Land Price Determina-
tion Methodology.
State owned construction land can also be leased for a short and long-term pe-
riod, as well as given under concessions if the use of the land is connected to a
business of general interest to the Republic of Macedonia. The regulations on
long-term lease include a minimum of 5 years and a maximum of 99 years.
The State Authority for Geodetic Works (www.katastar.gov.mk) is an independent
body in charge of conducting geodetic works and registering real estate rights.
Construction Permit
The procedure for obtaining construction permits is regulated by the Law on
Spatial and urban planning and Law on Construction.
In order to start the permitting procedure the investor has to have clear title on
the land.
Average time frame for obtaining construction permit is around 2 months and it
is separated in two stages: approval on site conditions and obtaining of construc-
tion permit.
Every municipality has its own pricelist for utility fees that have to be paid prior to
obtaining the fnal construction permit.
Once the permit is issued, the investor must commence with construction activi-
ties within 6 months of the day the permit is efective.
Certifcate of Final Acceptance is issued from the local municipality or the Ministry
of Transport and Communication after construction is fnished and reviewed by
special commission.
Utilization Permit
The construction will be put in use i.e. it will be a usable building following the
issuance of the utilization permit;
The utilization permit is issued after a technical inspection which determines that
the building has been constructed in accordance with the project design;
Issuance of the utilization permit does not take more than 30 days following the
submission of the request for utilization permit;
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Taxes
As a measure for stimulating the economy and reviving the real estate market in
a period of global fnancial crisis, in the second half of 2009, the government reduced
the value added tax on sale of new residential apartments from 18% to 5%.
This measure provided much needed stimulus for the construction companies,
resulting in increase on the demand side and decrease of the average price of the
residential square meter by around13%.
* Includes frst sale of residential apartments, computer software and hardware
** Local municipalities are in charge of yearly property tax
*** 2-3% for the taxpayer in the 2nd order of succession and 4-5% for the tax-
payer in the 3rd order of succession or not related to the testator. The relatives of
direct lineage up to the 1st order of succession are exempt from paying the tax.
TAX TAX RATE
Value added tax 18% general tax rate
5% preferential tax rate*
Property Taxes
Property tax 0.1%-0.2%**
Inheritance and gift tax 2-3% or 4-5%***
Tax on sale of real estate 2-4%
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REAL ESTATE MARKET SUMMARY
After several golden years in real estate in CEE the downside had to come even-
tually. The positive aspect of the recession is that it will create a number of opportuni-
ties we were unlikely to witness for at least another generation. The focus nowadays
shifts to managing the downside and recognizing the benefts from the upside.
Not experiencing the same pace of rapid real estate development and avoid-
ing creating own bubbles like its neighbours, puts Macedonia on the map as a
potential virgin market in almost every segment. Although there are number of
challenges ahead, one should bear in mind the mid and long-term growth sce-
nario and the opportunity to catch up with Western Europe on GDP per capita
base, thus creating strong demand of real estate.
Macedonia has maintained its macroeconomic stability, stable low infation rate
and the currency did not weaken. The projections for 2010 are forecasting 2%
GDP growth. The fnancial sector was mainly unafected from the world crisis and
it is mainly in condition to facilitate future economic growth.
EU and NATO perspective remains one of the biggest potential accelerators of
growth adding on to the large educated and multi-lingual population having a
huge low cost base potential.
2010 aim is to be well positioned in order to respond to an upturn in regional
and world growth. Macedonia ofers a number of opportunities that can ft into
sustainable development strategies ofering stable returns.
Over the last 2 years of ce market was very active. Almost all of previously an-
nounced projects were completed delivering new high quality buildings that are
changing the market landscape. Although on a short run it seems that there are
no immediate eforts for new developments, the market remains attractive pro-
viding high potential with minimal vacancies.
The shopping malls interest in Skopje is continuously growing, mainly because
of serious lack of modern buildings and potential of purchasing power growth.
The trend is pushed not only by several international developers but also the
increasing number of retailers trying to enter the market.
This is confrmed with the recent investments of the supermarket chain Veropu-
lus (Greece), Fashion group (a Macedonian-Austrian joint venture) and Gazit-Gloub
(Israel) adding on to the recently build Ramstore shopping mall, an investment of Koc
Holding from Turkey. The locations of the planned shopping malls gravitate to more
yielding captive areas resembling the location patterns in the western countries.
The residential market is sufering from chronicle disproportion of constant sup-
ply and inability to diferentiate the quality of fnal products. The constraints
coming from relatively high mortgage interest rates were ofset by the recent
government decision to lower the VAT rate from 18 to 5% for a period of 2 years.
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Prices are maintaining the same level as of 2009 mainly due to the lack of new
substantial projects in pipeline. On the other side, prices for newly built buildings
on the territory of Skopje in the downtown area and surroundings, which ranged
from EUR 1,000 to EUR 1,200 per m2 during 2009, continued to rise and reached
from EUR 1,300 to EUR 1,400 per m2 in the frst quarter of 2010. The high end
niche of top quality apartments and gated communities near Vodno remains on
top of the list of attractive prospects.
The entrance of large multinational corporations such as Johnson Controls, a global
leader in automotive interior systems, and Johnson Matthey, leading global produc-
er of catalysts, in the Technological Industrial Development Zone (TIDZ) Skopje sent a
positive signal to the potential investors in industrial facilities in Macedonia.
There is an intensive interest for building production facilities in the vicinity of
the main highways, and there are facilities recently built near the ring-road around
Skopje. One of the potential hot spots is the development of local and regional logis-
tics hubs built on the favourable location of Macedonia and the importance of Cor-
ridor 10 and 8. Recent government decision to ofer state owned plots for a nominal
1 EUR/m2 starting bidding price is expected to add further boost to this segment.
Highest development potential is expected in the hotel and leisure segment. Due
to the low quality of the current hotel supply and services ofered and the fairly
attractive prices average, Skopje remains a very attractive location for high-end
brand developments. There are several plots on several prime locations waiting
on developers and the recent government decision to ofer them on a public bid
with a starting symbolic price will certainly create some urgency on the market.
Type of facility Price in EUR per m2
Of ce space 1,000 - 3,000
Retail facilities 1,000 - 5,000
Industrial facilities 500 - 1,000
Residential apartments 600 - 1,600
Type of facility Price in EUR per m2
Of ce space 5 - 20
Retail facilities 10 - 60
Industrial facilities 1- 6
Residential apartments 3 - 12
Prices for purchasing immovable property in Skopje
Rents in Skopje
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The price for construction per m2 varies from EUR 400 to EUR 700 and more, includ-
ing the utilities fees. The amount of the expenses depends on the construction mate-
rials used and the utilities fees that are determined by the municipalities.
The amount of the utilities fees in Skopje varies according to the construction
zone and the type of facility, and ranges from EUR 80 to EUR 120 per m2 for resi-
dential facilities and from EUR 100 to EUR 140 per m2 for of ce and retail facilities.
The price of the construction land ranges from EUR 20 up to EUR 200 per m2 in
the attractive parts of Skopje, which are located both in the central area but also
in the peripheral area such as Zlokukjani and close to the Skopje ring-road.
OFFICE MARKET
Increasing stock of modern of ce space
Levelling demand and prime rents
Decline in new projects pipeline - acquisitions on the horizon
The of ce market is mainly located in Skopje, in the centre of the city and the sur-
rounding of the central city area. In the past there was a period when residential
buildings and fats were refurbished into of ces, which resulted in a lack of purpose-
built business facilities or build to suit buildings.
In the last 2 years several projects that were announced during 2007 and 2008 man-
aged to deliver more than 20,000 m2 of modern of ce space. This new supply is
greatly infuencing the immanent re-composition of the market thus levelling up
demand forecasts and redefning prime rents. Although some experts remain pessi-
mistic on new developments prospect, there is still a generally accepted opinion that
of ce market will diferentiate itself and slowly develop over the next couple of years.
Vacancy rates are mainly at a reasonable 8-10% and expecting to rise once the new
developments open ground.
The purchase prices of of ce space in Skopje are pretty diverse, thus the price ratio
between the most expensive and the least expensive of ce creates huge range de-
pendant mainly on location factors as well on construction quality factor. Several of
the recent developments are true Class A buildings ofering amenities that were not
present on the market before.
The lowest price for purchase of an of ce space of 100 m2 or bigger is EUR 1,000 per
m2 reaching prime ceiling at EUR 3,000 per m2. Higher category of ce space rents
are still above EUR 10 per m2 with primes around EUR 20 per m2. However due to ef-
fects from 2009s meltdown and 2010 hesitance to implement planed relocations of
several of the potential big tenants there is an expectation on short term drop in the
prime market.
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Purchasing prices and rents for of ce space in prime locations
50 m2 150,000 1,000 8% 3,000 20
100 m2 250,000 2,000 9.6% 2,500 20
150 m2 340,000 2,800 9.9% 2,267 20
Of ce space
Cost (EUR)
Yield p.a.
Price/m2 (EUR)
To buy To buy
Monthly
rent
Monthly
rent
Notably, prices and rents tend to be higher for larger of ces due to the lack of supply.
The annual return on the investment in prime of ces ranges between 8% and 10%.
Prime Of ce Rents - European Cities
City Rent in EUR/m2/month
Berlin 20
Frankfurt 33
Bucharest 20
Budapest 20
Prague 21
Source: JLL Of ce Property Clock 2010
The of ce market proved to be the most attractive segment of the real estate market.
Major existing and planned of ce facilities are located in the central city area and the
surroundings. Due to the lack of parking space there is also demand for building of
underground and multi-storey parking garages.
Soravia Centre Skopje
EXISTING PROJECTS IN SKOPJE
Soravia Centre Skopje
With more than 8,000 m2 of premi-
um of ce space as well as 4,000 m2
of frst class retail area connected
with the central City Shopping Mall,
the Soravia Centre is among the
largest and most sophisticated of-
fce and retail buildings in Macedo-
nia. The Soravia Group, an Austrian
retail development, properties and
investments holding, completed
the Soravia Center Skopje in 2008,
for a total investment of around
EUR 29 million.
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Hyperium
One of the frst investments of Aus-
trian Hypo Alpe Adria in Macedo-
nia, combining 13,000 m2 of prime
class of ces aiming to be the best
quality ofer in town.
This fve foors modern building is
introducing a lot of open spaces
with own garages, open parking
and full service package. The in-
vestment of more than EUR 17 mil-
lion is setting the very high bar for
other developments to reach.
Megi Business Centar
Modern and afordable. This brand
new 8,500 m2 business centre ofers
great architecture and outstanding
amenities very near Skopje main
railway station. Situated on the
Vardar river bank, this Macedonian-
Bulgarian EUR 10 million joint ven-
ture investment is an excellent ft
for large call centres and business
processes outsourcing companies.
Business-Trade Centre Aluminka
Located near to administration of
Municipality of Karposh, Aluminka
has of ce space with an area of
4,000 m2 and retail and warehouse
of 1,500 m2. Purchase price per m2
is between EUR 1,250-1,300 and
rent price ranges from EUR 5 to EUR
10 per m2.
Grawe Center
Disciplined and ef cient. This pe-
tite, 6 foors glass building is ofer-
ing 2,000 m2 brand new high qual-
ity of ces.
Grawe Center
Megi Business Centar
Hyperium
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Equest Of ce Building
The newly fnished seven-foor of-
fce building with an area of 3,870
m2 in downtown Skopje, built by
a domestic company GE-MA, was
sold to Equest Balkan Properties
(EBP), a British Investment Fund, for
EUR 7.8 million.
Business-Trade Centre Mavrovka
Mavrovka has of ce space with an
area of 7,000 m2. Purchase price per
m2 is around EUR 1,500 and rent
price is between EUR 7 - 10 per m2.
San Marco
San Marco
Equest Of ce Building
San Marco
State of the art, class A of ce tower, adjacent to Skopjes main square, ofering
4,000 m2 open space of ces with a perfect view on the hearth of the business
district. One of the landmark developments in the past two years becoming
perfect ft for bank or telecommunication company.
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PLANNED PROJECTS IN SKOPJE
Era City Skopje
In February 2008, the ERA group from Slovenia laid the foundations for a
business building, as the frst new building within the Era City Skopje proj-
ect which aims to be the largest and the most modern business, entrepre-
neur, trade and fun centre in the region. The project will be realized on a site
of 155,000 m2.
The total investment value is estimated at EUR 150 million and the construc-
tion should be fnalized by 2012. The business building inside the Era City
Skopje complex will have a total surface area of 33,600 m2, ten foors and
three underground garages. Its architecture will be modern and recogniz-
able with the latest IT and communication infrastructure. ERA Group is a ma-
jority owner of Skopje Fair.
Luna
Paloma Bianca
Located in the very centre of
Skopje, the facility has business
space of over 2,000 m2.
Luna

The recently fnished six-story
business centre on a surface area
of 1,500 m2 ofers 2,300 m2 of of-
fce GLA.

Located in the centre of the city,
this domestic investment serves
as an example for modern archi-
tecture complimented by high
quality of ce space.
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RETAIL MARKET
3 new shopping malls breaking ground
Strategic battle for new locations
The retail market is mainly located in Skopje and it is attractive both for do-
mestic and foreign investors. The planned shopping malls show gravitate to
more yielding captive areas resembling the location patterns in the western
countries, which provides more fexibility in implementing optimal design
solutions. In the near future, it is expected that there will be a rising trend in
suburban shopping malls and big box retailers.
One fact that clearly illustrates the market potential is the proportion of GLA
(gross leasing area) retail area per capita. Some of the recent developments
of Ramstore, Veropulus and City Gallery and few other smaller ones are com-
bining for round 40,000 GLA and there are virtually no other western style
shopping malls.
For a captive population of more than 600,000 people in Macedonias capi-
tal city and close to a million people in 40-50 km radius with a clear linkage
potential to markets such as Kosovo, the proportion in the range of 10 m2
per 1000 inhabitants sounds tempting enough. It is expected that bearing in
mind the recent announcements of G-mall and Fashion group mall, the over-
all supply can double in the next 3-4 years, but it is obvious that the market is
still in the initial stage of development.
The purchase prices in the oldest downtown city Shopping Mall (GTC) built
in 1970s range from EUR 1,500 per m2 up to EUR 5,000 per m2 for the best
locations. Similar prices are ofered in high streets shopping areas, mainly on
the famous pedestrian street Macedonia. The prime rents are in the range of
EUR 40-60. Outside city centre, prices start from EUR 1,000 per m2, while rents
range from EUR 10-20 per m2.
50 m2 250,000 3,000 14.4% 5,000 60
100 m2 450,000 5,000 13.3% 4,500 50
150 m2 600,000 6,000 12.0% 4,000 40
Costs, prices and yields for retail facilities in prime locations
Retail
Cost (EUR)
Yield p.a.
Price/m2 (EUR)
To buy To buy
Monthly
rent
Monthly
rent
MAJOR EXISTING MALLS
GTC City Shopping Mall
Located right next to the main square in Skopje, City Shopping Mall has GLA
of 40,300 m2. It is the oldest and the largest mall in the country.
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Ramstore Mall
Ramstore, the frst modern shop-
ping mall opened in 2005 close to
the city centre. This EUR 20 million
mall was built by Turkish Migros, part
of Koc Holding. It spreads on 25,000
m2, with open and closed parking lots
and includes 2,600 m2 of food space, 2
cinemas, children recreation areas and
various services.
SP Planet - Skopski Pazar
Shopping centre with European
quality and modern design. With an
area of around 8,000 m2, 20 brand
shops from diferent areas of interest
are represented. The shopping cen-
tre is a domestic investment located
in the municipality of Gjorche Petrov.
Veropulos Shopping Centre
Over EUR 40 million investment in
the new modern shopping mall right
in Skopje downtown. Located on
three levels with total area of 40,000
m2, this shopping centre is ofering
a variety of new brands on the mar-
ket. This ultra modern shopping cen-
tre was built by Greek supermarket
chain Veropulos.
Ramstore Mall
Shopping Mall Biser, Skopje
Veropulos Shopping Centre
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PLANNED PROJECTS IN SKOPJE
G-Mall
A shopping mall, an of ce tower and a luxurious hotel are going to be built
by the Israeli company Gazit-Globe on the location of the former Skopje fac-
tory Alumina. The planned area of the shopping mall is 60,000 m2, and the
hotel and the of ce space should reach 90,000 m2. The project value is esti-
mated at EUR 100 million.
Fashion Group Mall
On an area of 32,000 m2 in the municipality of Karpos a new modern shop-
ping centre is to be built. The shopping centre, a joint venture Macedonian-
Austrian investment, will have four movie theatres, ftness centres, a hyper
market and a multi-storey garage.
Skopje Skyscraper
One of the worlds leading shopping centre developers, the Turksih Cevahir
holding, is to design and construct a new modern shopping mall in the city
of Skopje with more than 40,000 m2 retail area.

The shopping mall is to be constructed within the municipality of Aerodrom,
and will complement the three residential skyscrapers built in its vicinity.
Zebra
City Gallery
In 2008, City Gallery with 6,350 m2
GLA was opened. Located on the
main square of Skopje, this EUR 13
million, Italian investment, repre-
sents a modern shopping centre
with prime retail spaces.
Zebra
Mixed use development in one of
the most attractive neighborhoods
in Skopje. This EUR 8 million do-
mestic investment ofers interesting
blend of retail, of ces and a car park
ft in more than 3000 m2.
PROJECTS IN OTHER CITIES
Trade Centre Global, Strumica
The interest of the investors begins to broaden outside of Skopje. In Strumica
a new shopping centre was opened with a total area of 40,000 m2 (20,000
m2is intended for retail shops and the remaining 20,000 are planned for of ce
space) built by domestic investors.
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Engro TUS Retail Chain
The Slovenian company Engro TUS has announced building of more than 20
markets in all Macedonian cities with more than 20,000 citizens. The project
will be realised over the next 4 years for a total investment value of EUR 90
million. The frst supermarkets combining more than 6,000 m2 are already
operational and further developments in secondary cities like Stip, Prilep and
Kumanovo are in the pipeline.
RESIDENTIAL MARKET
Prime market: Skopje
Trend: rising sale prices
The residential market in Macedonia is continually expanding. The construc-
tion of residential buildings and apartment blocks is the leading type of real
estate investments in Macedonia. According to the Census of population,
households and dwellings in Republic of Macedonia in 2002, there have been
approximately 700,000 dwellings with a total area of 49.7 million m2, thereof
164,000 dwellings with a total area of 11.3 million m2 on the Skopje territory.
The price of the residential space, particularly in Skopje, is permanently on
the rise. According to the experts estimate, due to the approximation of
Macedonia to European Union the prices will continue increasing.
The purchase price and the rent of apartments depend on the location, the
number of foors and partially on the year of building. The demand is largely
focused on the central area of Skopje, resulting in higher prices for residences
located there.
Residential Area of Skopje
The supply of new residential units
has been pretty steady over the
last 5 years, with around 5,000 new
units being delivered on an annual
basis.
In the frst half of 2010, 2102 dwell-
ings were delivered, a 9% fall com-
pared to the corresponding pe-
riod in 2009. The supply dropped,
among others, because of the
market stagnation period during
which the possibilities of obtaining
fnancing for new residential proj-
ects were largely limited.
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Skopje Downtown
Residential Area of Skopje
Center 1,000-1,400
Vodno 1,400-1,600
Karposh 1,000-1,200
Aerodrom 1,000-1,100
Kisela Voda 800-1,000
Novo Lisiche 800-1,050
Gjorche Petrov, Avtokomanda 750-950
Madzari, Chair, Hipodrom 500-800
Asking prices of residential space in diferent settlements in the city of
Skopje (EUR/m2)
Over the last years the demand for
residential units has been relatively
strong and largely focused on the
broader central area of Skopje with
a registered increase in demand for
apartments in the city of Ohrid in the
last 2-3 years. Smaller mid-end apart-
ments sized between 45 and 55 m2
are typically more interesting and in
much larger demand compared to
larger apartments.
The governments measure from
2009 for reducing the value added
tax on sale of new apartments from
18% to 5%, provided an additional
incentive for increase in the demand.
A recent analysis of the National
Bank, showed a staggering increase
in the price of the residential space
for about 50% over the last decade.
Asking prices have continued the
slight upward trend. Prices of m2
in the central business district of
the capital for mid-end apartments
range between EUR 1,300-1,400.
The prices of new apartments on av-
erage are higher by about 10-20% in
comparison to the apartments in the
older buildings.
- 23 -
Completed construction works and delivered residential units in
buildings built in 2009
Source: State Statistical Of ce
Number of construction works: 5,937
Dwellings completed 4,710
Total residential area built in m2 404,710
Average foor area in m2 86
Value of completed constructions works
(in million EUR) 374.2
Sale prices for residential buildings in Skopje (m2 in EUR)
CENTER NEAR CENTER PERIPHERY
1,000-1,400 1,000-1,100 600-900
Sale prices for residential buildings in the South-East Europe region (m2 in EUR)
SKOPJE BELGRADE BUCHAREST SOFIA
600-1,500 1,000-3,000 1,500-4,000 1,000-2,500
Costs, prices and yields for prime apartments in Skopje
50 m2 75,000 500 8.0% 1,500 10.0
100 m2 130,000 1,000 9.2% 1,300 10.0
150 m2 180,000 1,300 8.7% 1,200 8.6
Apartments
Cost (EUR)
Yield p.a.
Price/m2 (EUR)
To buy To buy
Monthly
rent
Monthly
rent
Costs, prices and yields for prime houses in Skopje
50 m2 180,000 1.200 8.0% 3,600 24
100 m2 350,000 2,000 6.9% 3,500 20
150 m2 450,000 2,500 6.7% 3,000 16.7
Houses
Cost (EUR)
Yield p.a.
Price/m2 (EUR)
To buy To buy
Monthly
rent
Monthly
rent
- 24 -
Average rent rates remained steady. Demand is primarily oriented towards the
city of Skopje and the municipalities of Centar and Karposh, proven to be most
attractive for employees of foreign embassies and international organizations.
Rental rates depend primarily on the location of the property, quality of con-
struction and fnishing works, quality and level of furnishing, accessibility, se-
curity and parking availability.
The prime rents, range between 8-10 EUR/m2, while on average the rent rates
vary between 3-6 EUR/m2.
PLANNED PROJECTS
Soravia Resort
Redeveloping the former 25,000 m2 location of the Olympic village, one of
the frst high-end gated communities in Skopje delivers 200 fashionable and
artistic apartments. This new EUR 30 million development of the Austrian
Soravia Group, is also introducing a small hotel and panoramic restaurant ad-
jacent to a unique spa centre.
The size of the apartments varies from 75 m2 to 190 m2, including duplex
apartments on two foors. Most of the apartments share a breathtaking view,
both over Skopje and towards Vodno.
Soravia Resort
- 25 -
The complex also provides parking spaces and garage, with direct connec-
tions (elevator and stairs) to the apartments.
The construction is to be completed by 2014.
Skopje Skyscraper
Located on a very attractive 21,150 m2 plot in one of the biggest and young-
est municipalities in Skopje, Aerodrom, this bold and ambitious project envi-
sions construction of three, thirty-fve story residential towers combining for
over 100,000 m2 of high quality space.
Chevahir holding, one of the biggest Turkish developers with extensive expe-
rience in EMEA region is aiming to develop a new true landmark of the capital
city, certainly a very unique project for the years to come.
INDUSTRIAL MARKET
Specifc zones: Technological Industrial Development Zones
Exemptions for paying taxes and fees
Starting bidding price of only 1 euro per m2 in order to accelerate
economic growth
Industrial buildings market remains generally underdeveloped, especially in
comparison to the more developed economies in Europe. Foreign entities
can build industrial buildings with no limitations. Special incentives pack-
ages can be tailored depending on the type and size of the investment. For
more details contact Invest Macedonia prime governmental organization
dealing with foreign direct investments.
Although there are industrial buildings and zones in many cities in Macedo-
nia, the Technological Industrial Development Zones (TIDZ) are specifc areas
designated for investors ofering standard incentive packages.
Investors in TIDZs are entitled to a 10-year proft tax and personal income tax
exemption. Investors are exempt from payment of value added tax and cus-
toms duties for goods, raw materials, equipment and machines.
WAREHOUSE
FACTORY
P=139,28 ha
Urban plan of FEZ Bunardzik
Plan of TIDZ Skopje
- 26 -

Other benefts include completed infrastructure that enables connection to
natural gas, water, electricity and access to a main international road net-
work. Investors are also exempt from paying a fee for preparation of the con-
struction site. Fast procedures for business activity registration are provided
in TIDZ that further reduce the costs of setting up. The land in the zone can
be leased to a foreign investor for a period up to 99 years.
As a measure for stimulating the development of this segment of the mar-
ket, as of recently, the government began ofering state owned plots for a
nominal 1 EUR/m2 starting bidding price. This should provide huge boost to
the development of the industrial real estate market as well as the overall
economy in general.
Currently, there are 4 TIDZ in Macedonia:
Skopje I, with a total surface area of 140 ha. TIDZ Skopje I occupies a frst
class location - 10 km east of the capital Skopje, on the crossroad of the cor-
ridors 8 and 10, just 3 km away from Airport Alexander the Great and 500
meters away from the national rail network station.
Johnson Controls factory in the TIDZ Skopje I was of cially open for com-
mercial production in December 2007 on an area of 54,000 m2. Johnson Mat-
they state of the art facility had its of cial opening in April 2010. This EUR 65
million investment from UK spreads out on 13 ha with an overall build out
area of more than 12,000 m2.
The Skopje Zone will be expanded for further 100 ha as part of the Skopje II
project.
The Zones in Stip and Tetovo combining for more than 300 ha are in the frst
stage of development of the infrastructure and are expected to be fully operational
by the end of 2011.
Other incentives include:

- free connection to utilities;
- lease at concessionary rate for a period of up to 99 years;
- construction subsidies of up to EUR 500,000.
Fiscal Benefts
Corporate tax
Personal income tax
Value added tax
Property tax
Excise taxes
Raw materials
Equipment
0%
for the frst 10 years
10%
10%
18%
0%
for the frst 10 years
0%
0%
0%
Up to 15%
5% - 20%
0%
0.1% - 0.2% 0.1% - 0.2%
5% - 62%
TAX
Tax Rates
Product
Customs Duty
TIDZs TIDZs
Outside
TIDZs
Outside
TIDZs
- 27 -
HOTEL MARKET
High growth in tourist spending
Two top destinations: Skopje and Ohrid
Government incentives
Casino cluster near Greek border
Most popular tourist destinations are Skopje, being the capital city and busi-
ness and political centre, and Ohrid, a city included in UNESCO World Heri-
tage List, admired for the unique beauty of the Ohrid Lake and the invaluable
historical and cultural heritage.
The highest number of tourists comes from the neighbouring countries, fol-
lowed by the tourists from the other countries in South-East Europe and EU.
In the frst half of 2010, there were 221,252 tourists, which represent a slight
drop of 4% compared to the corresponding period in the previous year. In
the same period there were 523,280 nights spent, which compared to the
frst half of 2009, represents an increase by 4.1%.
Most of the tourists have visited the city of Ohrid, which is the major tourist cen-
tre in the country and has the biggest lodging capacity of around 30,000 beds.
Category Number of hotels Total number of rooms
Five star 5 >400
Four star 5 >200
Three star 5 >120
Hotels in Skopje
In the coming years the number of foreign tourists is expected to rise. Name-
ly, the government is putting a lot of efort and resources in promoting the
country as an attractive tourist destination through its proactive media cam-
paign. At the beginning of 2010 as part of the plan for supporting and devel-
oping the tourism, subsidies to tour operators that will bring foreign tourists
to Macedonia are also being ofered.
The hotels in Skopje are mostly located in the downtown area and near the
centre. The prices depend on the type of the room and boarding as well as
the size of the room. The prices for a bed and breakfast start at EUR 30-40. The
average price for accommodation in a standard room in hotels with 4 and 5
stars is in the range of EUR 120-150.
There are several plots on several prime locations waiting on developers and the
recent government decision to ofer them on a public bid starting with a symbol-
ic price of only 1 euro per m2 will certainly create some urgency on the market.
- 28 - ---- 228 22222222288888 28 8 28 22228 28 8 22228 28 8 28 28 28 28 28 28 8 28 888 28 28 28 88888888888888 28 28 8 ------ --
The southern city Gevgelija, placed right next to the border with Greece, is
the most developed casino centre in Macedonia owing to the great infux of
visitors from Greece, which counts for about 5,000 visits per week. There are
already two hotels with fve stars with 103 rooms which operate in the city of
Gevgelija and its surroundings.
Hotels in Ohrid
Category Number of hotels Total number of rooms
Five star 1 133
Four star 12 >800
Three star 4 >150
Hotel Aleksandar Palace
- 29 -
PLANNED PROJECTS
Marriott Skopje
International hotel group Marriott will build a EUR 46 million hotel. The ho-
tel will cover 20,000 m2 and will have 180 rooms, 16 luxury apartments, one
presidential suite and a spa centre. The hotel is scheduled to open in 2013 in
the citys downtown area.
Radisson Sas Skopje
International hotel group Radisson will build a EUR 68 million hotel in the
broader central area, opposite the old railway stations. The hotel will ofer
210 beds, 16 and is scheduled to open in 2012.
Sheraton Gevgelija
Located near the Greek border, the Turkish company Princess is fnishing
with the construction of a luxurious 5 star hotel . On an area of 30,000 m2 the
hotel will ofer 128 elegant and well designed rooms, 2 executive suites, one
presidential suite, casino and accompanying objects. The total value of the
investment is EUR 30 million.
The hotel will operate under the brand Sheraton.
Ski Centre Kozuf
Ski Center Kozuf
Ski Center Kozuf
The Ski Centre Kozuf, worth EUR
130 million, is designed to be the
largest and most attractive year
round mountain resort in South-
East Europe. The centre is currently
under construction and should be
fully operational by 2011. It covers
an area of 505 ha, thereof ski slopes
of 450 ha.
The ski village covers 55 ha and will
include hotels, weekend area with
710 houses, sport terrains etc., and
will ofer a total lodging capacity
of 6,000 beds. The mountain resort
is situated at 1,500-2,200 m above
the sea level, nearby Gevgelija.
- 30 -
AT YOUR SERVICE
Invest Macedonia, the of cial govern-
ment Agency for foreign investments,
is looking forward to servicing your
needs throughout your investments
decision-making process: from an-
swering initial questions and arrang-
ing an appropriate itinerary to visit
Macedonia, to objectively evaluating
the business climate and the prospect
for the success of your project.
Should you decide to locate in Mace-
donia we will work on your behalf with
national and local governmental au-
thorities and help you fnd suitable lo-
cal partners with whom you can open
an exploratory dialogue.
As your operation grows in Macedo-
nia, we will continue to work closely
with you to understand your require-
ments to grow faster and to ensure
that Macedonia can fulfll your busi-
ness needs to facilitate that growth.
Useful Links:
www.fnance.gov.mk
www.economy.gov.mk
www.mtc.gov.mk
www.nbrm.gov.mk
www.stat.gov.mk
www.mse.org.mk
www.mchamber.org.mk
www.exploringmacedonia.com
www.macedonia-timeless.com
Agency for Foreign Investments and Export
Promotion of the Republic of Macedonia
St. Nikola Vapcarov 7, 1000 Skopje
Republic of Macedonia
Phone: +389 2 3100 111
Fax: +389 2 3122 098
E-mail: fdi@investinmacedonia.com
Disclaimer
Although all reasonable eforts have been made to ensure the reliability of the infor-
mation presented in this document, the Agency for Foreign Investments and Export
Promotion of the Republic of Macedonia does not assume liability for its complete-
ness or accuracy.
- 32 -
On behalf of