Market Report, "Bosnia-Herzegovina Real Estate Report Q1 2013", Published

Fast Market Research recommends "Bosnia-Herzegovina Real Estate Report Q1 2013" from Business Monitor International, now available

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Boston, MA -- (SBWire) -- 02/14/2013 --The Bosnia & Herzegovina (BiH) Real Estate report examines the commercial office, retail, industrial and construction segments throughout the country, in the context of the struggling domestic and regional economy.

With a focus on the three principal cities of Sarajevo, Trebinje and Zenica, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in commercial real estate, while minimising investment risk and exploring the impact of the eurozone crisis on an already struggling market.

Our latest data collection, for the first six months of 2012, has revealed an industry-wide contraction in rental rates across all geographies surveyed, continuing the downturn of 2011 and undoing much of the positive growth seen in 2010. The industrial sector has weathered the storm better than its counterparts due, in part, to the increased lease-length cycle, but in the medium term we expect the retail sector in particular to outperform.

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Key Points:

- The economic recovery is losing momentum alongside the escalation in the eurozone sovereign debt crisis. We expect economic activity to pick up in 2013, but warn that further demand destruction in the single currency area could slam the breaks on Bosnia's fragile recovery. We have revised down our 2012 and 2013 real GDP growth forecasts to 0.1% and 1.1% from 1.9% and 2.3% respectively.
- A central government may have finally been agreed, but political instability remains a lingering concern. The highly fractious state of Bosnian politics mean that future reform moment will likely be anaemic, preventing the country from realising its full growth potential.
- The IMF has agreed to a new 24-month loan for Bosnia, which will provide a welcome boost to investor sentiment and fiscal stability. However, we warn that risks of reform fatigue, missed fiscal targets and coalition instability remain, which would once again result in outstanding loan tranches being frozen.
- The construction and infrastructure sector in Bosnia and Herzegovina (BiH) rests on shaky ground as the eurozone crisis continues to deplete enthusiasm from investors. The coalition government adds further risk with unstable alliances and the risk of a much more pronounced downturn in economic activity. Construction industry value is forecast to stand at US$0.7bn in 2012, with average year-on-year (y-o-y) growth of 2.2% expecting to see the industry value rise marginally by 2016, to US$0.8bn.

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