2,200 conversion requests submitted; the industry plans 88 million euros in investments
Nearly half of the companies that have submitted or are preparing to submit requests for the conversion of land use rights into ownership are planning investments at those locations. A third have entered the process to become landowners, while 11% plan to sell plots, according to a NALED study on the effects of abolishing conversion fees presented at the property and Investment Alliance meeting.
Of the business owners who indicated in the survey that they plan new investments on this land, two-thirds (66%) will invest in production and energy facilities, as well as warehouse space. Every fourth respondent plans to build residential and commercial buildings.
According to Jasmina Radovanović, NALED's leading advisor on property and investment, in the eight months since the amendments to the planning and construction Law came into effect, 2,169 conversion requests have been submitted without fees, of which more than half have already been positively resolved.
- For over a decade, while conversion with fees was in effect, numerous hectares of construction land were practically locked, leading to halted investments, which meant less money in the budget and fewer jobs. Regarding the construction industry trends during the past year, statistics on issued building permits show a relatively small year-on-year growth of 1.4%. According to our analyses, the number of applications for location conditions was 5.1% lower compared to 2022. Also, the estimated value of works last year was more than a quarter lower (26.4%) than the year before. Initial results suggest that enabling conversion could contribute to reversing this trend - Radovanović stated.
A third of surveyed companies expect their investments after completing the conversion to range from 500,000 to one million euros, every fifth will invest from one to five million, while 17% state that they will invest more than five million euros after conversion. The average area of construction land subject to conversion requests, according to the research results, is 3.5 hectares. Overall, investments totaling 88 million euros are planned for construction land covering about 1.2 million square meters.
Among the respondents, expectations prevail that enabling conversion will have positive effects on employment growth after the realization of planned investments by the industry. Half of the firms state that the investments they will make after completing the land conversion process will lead to an increase in the number of employees, while just over a third, 36%, state that the investments may lead to an increase in the number of employees. Those expecting increased employment mention that the number of new jobs after investment realization will average around 50.
- Many manufacturing companies, including Neoplanta, have abandoned projects to expand their capacities due to the impossibility of obtaining building permits for construction. We have successfully completed the conversion process without fees and have already initiated a project to install solar panels for which we are in the process of obtaining a building permit, which will bring us enormous energy savings. The industry is very satisfied; this is an opportunity for further development. It's also an opportunity for new jobs, which means more money for the state, which suffered the most while conversion with fees was in effect - emphasized Aleksandar Vujošević, Director of the Legal Department at Neoplanta.
Even 90% of respondents are satisfied with the amendments to the Planning and Construction Law regarding the enabling of conversion, and roughly the same percentage state that this reform will have a positive impact on their business.
