Belgrade: A new chapter

28 May 2015 by GrahamSmith
Belgrade is putting its turbulent past behind it with an explosion of economic and cultural developments, writes Paul Revel Belgrade’s current wave of regeneration is nothing new. Its 6,000 years of history have seen the city destroyed and rebuilt more than 40 times – attackers and invaders have included the Celts, Romans, Huns, Goths, Ottomans, Austro-Hungarians, Nazis and NATO. Architecturally, much of its rich and violent history has turned to dust – apart from the indomitable Kalemegdan fortress, parts of which date back to the sixth century. Some of the surviving buildings have gorgeous art nouveau and art deco façades from the late 19th to early 20th centuries – many are shockingly dilapidated, but an increasing number are beautifully restored. There’s also a smattering of intriguing architectural styles, from neo-Baroque to Secessionist and Balkan-Oriental. The city’s carbuncles, its brutalist Soviet blocks, remain for now, as do the gaping missile holes left by NATO in the old Yugoslav Ministry of Defence building. But there is also a fresh-paint feeling of newness in the air – of construction, investment and progress. I meet Belgrade’s mayor, Sinisa Mali, and his team at City Hall – an elegant 19th-century former royal palace. Mali, who has an MA from Washington University, is a fresh-faced 42-year-old, and points out he’s probably the oldest on his team. This youthfulness reflects an attitude of go-getting optimism, and sends a deliberate message of change from previous eras’ corruption and dysfunctionality. “They are not paid well – we are state administration – but they all believe in this new story,” he says. “There is so much energy and creativity – they want to make this city a better place to live.” Mali is enthusiastic, but seems candidly realistic. He says his goal is to “re-assert Belgrade’s position as an economic, political and social centre for the region”, while admitting to inheriting “huge financial problems” which have meant a period of difficult economic reforms. “We are on the path to European Union accession but are not yet EU members,” he says. “We have free-trade agreements with Russia, Belarus, Kazakhstan, Turkey, the EU and the US. No other country has that. That’s why you’re seeing all these investors coming – because they can export to all these markets. "And with political stability since the new government was formed last year, with an absolute majority, we have an important opportunity and we must not miss it.” To attract inward investment, a range of tax incentives are on offer, including, for large companies, a corporate tax holiday for up to ten years, subject to various criteria. Among international companies investing in Serbia, Microsoft has a development here and Fiat is expanding the car plant it opened in 2010. Mali’s not afraid to share unvarnished truths about the city’s challenges: “We still lack mains sewerage in parts of the city, believe it or not,” he says. A €250 million waste management project starts this year, a public-private partnership deal that will include waste-to-energy technology. A somewhat more glamorous project is the €3.5 billion, 1.8 million sqm Belgrade Waterfront Development along the Sava riverbank, which comprises hotel, residential and commercial space. The multi-phase scheme, in partnership with Abu Dhabi-based firm Eagle Hills, will feature the region’s largest shopping mall, performance venues, restaurants, green spaces and a 180-metre-tall hotel and residential tower with a rooftop winter garden. Other major projects include a new metro system, a city ring road and a second runway at Belgrade’s Nikola Tesla airport. Mali also highlights the success of Air Serbia (formerly Jat Airways), in which Etihad bought a 49 per cent stake in 2013. The recent launch of Etihad’s global ad campaign was a glamorous affair, with actress Nicole Kidman on stage at the glitzy Emirates Palace hotel in Abu Dhabi. But Etihad’s chief executive James Hogan was all business when he talked about the airline’s partnership strategy. He said investment in other airlines was about “stretching the network and reducing costs collectively, and ensuring all those airlines move to profitability” – citing Air Serbia’s impressive turnaround. Air Serbia reported a net profit of €2.7 million for 2014, an eye-catching reversal of its €73 million loss for 2013. Revenue was up 87 per cent to €262 million, passenger numbers up 68 per cent and capacity up 74 per cent. Air Serbia chief executive Dane Kondic says: “We had to re-fleet, rebrand, retrain and reinvest. Etihad gave Air Serbia scale and allowed it to access its training facilities, avoiding a double-up on investment and reducing costs.” He also cites improved aircraft utilisation and being able to connect with Etihad’s global network. Kondic says that business travel has been a “key driver” of his airline’s expansion. He adds: “An interesting trend is the growth in investments between the regional countries, particularly among the former countries of Yugoslavia. This process places Belgrade and Serbia at the centre of the region and, as a result, business travellers are increasingly taking advantage of our strong regional network.” Alongside the headline infrastructure and corporate projects, a more street-level, community-based regeneration is taking place. The Savamala district was until recently a bleak post-industrial zone; now, it’s undergoing a renaissance as a creative hub. At the heart of this movement is Mikser House, a former warehouse and now a multifunctional design, performance, exhibition and meeting space. Founder Ivan Lalic said the area was previously “Sin City, known for its pollution and prostitutes”. Three years ago, “artists started to try and change the area”, and now, he says, there are more than 50 new initiatives locally, from galleries to restaurants to design co-ops. On the programme at Mikser during my visit was a theatrical production of Lars von Triers’ Dogville, as well as concerts from classical to rock’n’roll. The annual Belgrade Dance Festival attracts international performers and audiences, while other events range from annual fashion and design weeks to a host of festivals for food, wine, art and music. This renaissance is accompanied by a growth in chic cafés and excellent restaurants. Those heading to do business in Serbia should be able to obtain good deals on accommodation – according to hotel data specialist STR Global, last year saw a 47.5 per cent occupancy rate for the country, with the average daily rate around £66. STR reports that Belgrade has 33 hotels with a total of just under 4,000 guestrooms. Corporate hotel booking specialist HRS notes that average rates in Belgrade have hardly shifted since 2012 – from €74 per night to €79 in 2014. “However, we are watching with interest how Belgrade may become more popular as it grows its reputation in the corporate travel world,” says Jon West, managing director for HRS in the UK and Ireland. He believes Belgrade is in a similar price bracket to Warsaw, Budapest and Prague. “The city will be playing host to a number of international events this year, which will further help to put it on the map,” he says. “This, coupled with plans for huge investment by the UAE to make Belgrade the ‘Dubai of the Balkans’, with an investment of US$3.6 billion expected, should boost its profile on the international scene.” The grandiose Waterfront project is attracting opposition from various quarters, however, with critics citing a lack of transparency and unanswered questions around funding and timelines. And many of the city’s infrastructure projects await private investment before completion dates can be envisaged. Still, the daunting tasks ahead are not deterring mayor Mali and his young team. “Our biggest challenge is the lack of financial means to do this on our own,” he says. “So we have to find partners for specific investments. And to do this we must have stable public finances. Our challenge is to find partners that we can build a better city together with, and share the benefits.”
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