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Destination report: Belgrade

BELGRADE’S CURRENT SPATE 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 over the years have included 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 6th century. Some of the surviving buildings have gorgeous arts nouveau and deco facades 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 NATO’s gaping missile holes in the old Yugoslav Ministry of Defence building.

But there is also a fresh-paint feel of newness in the air here – of new 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 also 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. There is so much energy and creativity – they want to make this city a better place to live,” says Mali.

THE PATH TO THE EU

He is enthusiastic, but seems candidly realistic. Mali 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. But he says: “Serbia is unique, because we are on the path to EU [European Union] accession – but not yet EU members. 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 centre 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 to 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 Belgrade Waterfront Development, a €3.5 billion, 1.8 million sqm develop-ment along the Sava riverbank, featuring hotel, residential and commercial space. The multi-phase scheme in partnership with Abu Dhabi firm Eagle Hills will feature the region’s largest shopping mall, performance venues, restaurants, green spaces and a 180m hotel-residential tower with rooftop winter garden. Other projects include a new metro system, a city ring road and a second runway at the 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 advertising campaign was a glamorous affair, with Hollywood star Nicole Kidman onstage at the uber-glitzy Emirates Palace hotel in Abu Dhabi. But Etihad’s CEO 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. In March this year Air Serbia reported a net profit of €2.7 million for 2014, an eye-catching reversal of its €73 million loss for 2013. Revenue is up 87 per cent to €262 million, passenger numbers up 68 per cent and capacity up 74 per cent.

GLOBALLY CONNECTED

Air Serbia CEO Dane Kondic says: “We had to re-fleet, rebrand, retrain and re-invest. Etihad also 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 business travel has been a “key driver” of his airline’s growth, and 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 layer of 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 multifunc­tional design, performance, exhibition and meeting space. Founder Ivan Lalic said the area was previously “sin city, known for its pollution and prostitutes.” Then, 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 theatre production of Lars von Triers’ Dogville, as well as concerts from classical to rock’n’roll, and various children’s activities. Meanwhile, the 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 reassuring growth in chic cafes and excellent restaurants.

ACCOMMODATION DEALS

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 average daily rate around £66. STR reports that Belgrade has 33 existing 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 at 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, and says Crown Plaza’s opening of a 416-room property shows growing confidence. “It’s also positive to see Belgrade will be playing host to a number of international events this year, which will help further put it on the map. This, coupled with plans for huge investment by the United Arab Emirates to make Belgrade the ‘Dubai of the Balkans’ with an investment of US$3.6 billion expected, should really help boost Belgrade’s profile on the international scene.”

The grandiose Waterfront project is attracting criticism from various quarters, who cite 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.

But 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.”

Meet and stay

As well as chain brands, including Hyatt, Radisson Blu and Holiday Inn, Belgrade has some good design-led boutique hotels

SQUARE NINE

Luxury 45-room property, with ambient wood-panelling, stone and bronze. It features a basement Sisley spa with an 18m swimming pool, gym, sauna and steam rooms. Standard bedrooms are a generous 32 sqm. A range of indoor and outdoor meetings and events spaces include a rooftop terrace for up to 200 guests.

TOWNHOUSE 27

A 1920s building completely revamped to create a small design hotel with 21 spacious, stylish and well-equipped rooms, conference space for up to 17, and complimentary breakfast ‘snacks to go’ if you’re in a rush.

BELGRADE ART HOTEL

Sleek modern hotel in the heart of the city on the main pedestrian thoroughfare – Knez Mihailova Street itself is a protected landmark – and surrounded by some of the grandest architecture. The 55-room property showcases work from young Serbian artists – which guests can buy – and features include two conference rooms, a wellness centre and a Belgian waffle bar.

KUSTENDORF/ DRVENGRAD (below)

200km south west of Belgrade, in the mountains on the border with Bosnia, is the surreal wooden film set village created by Cannes Palme D’Or-winning director Emir Kusturica, for his 2004 movie Life is a Miracle. It’s home to the annual Kustendorf International Film and Music Festival – a lively event with an impressive reputation and line-up: on my brief visit, Oscar-winning director Alfonso Cuaron was onstage talking about his films, including Gravity and Children of Men, and taking questions from an enthusiastic audience of film students.

When not hosting the festival, it’s a mountain resort that offers a distinctive option for meetings and events. It features a hotel, a conference hall and facilities, restaurants, a pool and gym, and guest chalets – and a nearby ski resort. For more information, see panacomp.net

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