The Biggest Condominium in the Balkans

Malaysians Investing DM 100 Million in B&H

In a year and half, the biggest condominium in the Balkans will stand in Sarajevo. This is to be the result of a Malaysian investment amounting to DM 100 million into a housing and business complex already under construction.

AIM Sarajevo, November 30, 2001

The few foreign investors willing to invest considerable sums in B&H have been joined by the Malaysians. Trusting that the construction of a luxury apartment and business complex in Sarajevo will prove to be profitable, they decided to run the risk most other foreign investors are still unwilling to take upon themselves when B&H is concerned. Local officials have greeted the project with enthusiasm. Not because of the apartments that are being built, since those holding high posts in the government have long since ceased being homeless or living in rented flats, but because this happens to be the largest single foreign investment in B&H up to date. What we have here is a DM 100 million investment, a sum no foreign company has ever invested into this country up to now. Thus, the entire enterprise is being perceived by the current authorities as a promise of investments yet to come and the possible arrival of fresh capital so desperately needed by the B&H economy.

Whatever the outcome of the undertaking, the Treasury has already collected DM 8 million on the score of annuities such as land-taxes, various permits, approvals and so on, meaning that the authorities are not overly concerned with what the fate of the apartments offered for sale may turn out to be in the end. Whether the Malaysian investors have struck a good deal or not will be apparent pretty soon, when they do or do not find buyers for the 300 apartments being built. The size of the living space being put on the market ranges from unassuming 80 square meters per flat to the somewhat more striking figure of square meters 350 per housing unit, all situated within the 23 stories high twin towers. The future apartment owners of the first ever condominium in B&H are to enjoy the advantages of a swimming pool, gym and a underground garage within the compound, off limits for all but themselves, as well as the feeling of security offered by the video-surveillance of security guards dedicated exclusively to their well-being. Those holding reservations as to the joys of sharing a swimming pool with their immediate neighbors need not worry: if they chose to, they may have a swimming pool built within their very own apartment. Others, more prone to business, have been offered the opportunity of situating their businesses in premises within the complex next to their place of residence. The price? A trifle. Mere DM 4 thousand per square meter.

Thus, while the very mention of the exquisite comforts awaiting future apartment owners within the luxurious condominium incites deep sighs on the part of the multitudes of subtenants and homeless living in Sarajevo, what seems to be more and more clear is that the sole criterion for deciding who are to be the lucky ones moving into the dream-condo is to be the size of the bank account of these future lodgers. Although the price-list has not been officially set as of yet, the investor, Bosmal, claims it "will not go beyond DM 2250 per square meter". As a comfort to those who have a spell of dizziness each time they multiply the said price with the number of square meters desired, they will be offered the possibility of buying on a 25 year credit with a six percent interest rate, no endorsers and the apartment as a collateral. According to a rough estimate, this means that the future lucky owner of an apartment of 80 square meters will have to set aside around DM 180 000. With the interest rate added to the monthly installment, this means that the prospective owners of even the most modest apartments will have to set aside DM 1000 per month. And thus for the next twenty-five years.

The answer to the question whether the price is (too) high would have to be - it all depends. For the tens of thousands of "temporary" and permanent citizens of Sarajevo without a roof over their heads, the figures mentioned are surreal. After all, the sum of DM 1000 surpasses two average monthly salaries in Sarajevo, meaning that the vast majority of the citizens have been excluded from the competition from the very start, since they find it hard to obtain even that single average salary. Those who did not have the luck of moving into socially owned apartments at the time of the "undemocratic" socialist regime and to become their owners in the transition period have nothing to hope for. The very few apartments being built for the "most endangered" social categories such as war invalids and the families of the fallen and demobilized soldiers have been offered up for sale for a "symbolic price" of DM 1000-1500 per square meter repayable within a five-year period. That is approximately how much existing, previously privatized apartments cost on the open market. As far as the poor are concerned, a square meter of living space priced at DM 1000 and that costing DM 2500 are equally out of their reach. The sole alternative left to them is renting the space in which to live in which may cost them from DM 300 up to DM 500 per month for a two-bedroom apartment. Just so as to prove that even the cursed have some luck, the shift of focus on the part of the international community has resulted in the decline of foreigners seeking lodgings in Sarajevo compared to the "golden ages" some two to three years ago when rents for a three-bedroom apartment amounted to astronomic DM 2500-3000.

On the other hand, the largest condominium in the Balkans cannot pride itself with the most expensive apartments on the market. Far from the public eye, discretely, particularly in the very center of the town, a number of unobtrusive edifices two to three stories high with up to some ten odd luxurious apartments priced at up to DM 3000 per square meter are going up at present. As far as can be deduced from the outside, these apartments have neither swimming pools nor gyms within their exclusive walls.

Without doubt, it will not be hard finding those 300 prospective buyers who can bear the expense of several hundred thousands of DM for the purchase of an apartment. How they happened to come into so much money is probably unimportant at the moment. What is questionable is whether they will choose to buy another apartment in addition to the apartments and houses they already possess and whether the new offer will be to their taste. Among the indubitable victims of the war and the ensuing transition process in B&H are the middle classes which would be the obvious targeted group for such a projected in any ordered country. But, since no such thing as a middle class is to be found in B&H, foreign investors will have to rely on its surrogate, locals employed in international organizations, foreign embassies and similar "enterprises" with high enough salaries to sustain monthly installments of DM 1000. There is just one catch to this: none of those amply paid at present can be sure they will keep their jobs for another year, let alone for several decades.

The logic guiding Malaysian investors is quite simple. At the moment, their is a shortage of around five to ten thousand apartments in Sarajevo. So, the demand is there. But in the Balkans logic is not always the most reliable criterion to go by. Not far from the construction site of the biggest condominium in this part of the world are the remnants of apartments once occupied by people who, for the sixth year now, have been going round from one governmental institution and international aid organization to another in hope of securing funds for the reconstruction of their former homes. These apartments are a veritable "black hole", both metaphorically and literally. Their nominal owners, state firms, are preoccupied with the ongoing privatization process and find no interest in investing (means they do not have) into apartments which would pass into private hands later on with no profit whatsoever in it for them. The government says it has no money, foreign donors have done their job and left. Thus, while strolling through the ruins of their homes and hoping for a miracle to happen, all these people can now do is to watch how, before their very eyes, the "biggest ever condominium in the Balkans" is soaring towards the skies with no room in it for them.

DRAZEN SIMIC

(AIM)