Page 102 - SE Outlook Regions 2022

entry to the Macedonian market is expected within three years at the
latest.

At the end of October Skopje’s East Gate Mall, a €350mn project
developed by Albanian Balfin group, was officially opened on October
29, 2021 and is one of the biggest malls in the region.

The three mixed-use projects in Skopje, Skopje East Gate, Cevahir Sky
City and Diamond of Skopje, will deliver 120,000 sqm of retail gross
leasable area (GLA) by the end of 2022, according to Cushman &
Wakefield|FORTONMKA.

“We expect in the foreseen future investor focus in North Macedonia to
be tenant driven, with emphasis on retail parks as a cost-effective
opportunity not only in Skopje, but in the secondary cities as well. “The
lack of modern retail space in Kumanovo, Gostivar, Bitola, Prilep, Shtip
and Tetovo presents great investment potential for developers. High
demand for low-cost retail spaces, as well as their successful
performance during the pandemic period, contributed to greater interest
in commercial real estate developments in retail parks,” according to
Cushman & Wakefield|FORTONMKA .

3.8.2 Banks

Initial data on total deposits and loans for October 2021 (the latest
available) show their further solid annual growth, according to the
central bank. This favourable trend is expected to continue, with an
average annual growth of deposits and loans of 7.4% and 7%,
respectively, in the period 2021-2023.

According to the central bank, during the crisis, the stability of the
banking system was extremely important, as it provided support for the
economy, and it is expected to support economic growth in the next
period, given the banks’ resilience. In particular, credit support to the
economy remains solid, with a growth of around 7% in 2021 and
gradually accelerating to around 8% in the medium term. The
expectations for the movement of deposits are similar.

According to Fitch, North Macedonia’s banking sector has maintained
strong fundamentals despite the pandemic shock and the phasing out
of financial sector relief measures. It is adequately capitalised with a
total capital ratio of 17.3% and common equity Tier 1 ratio of 15.9% at
mid-2021 and profitability (return on average equity of 12.6%) as well
as low non-performing loans (3.4%), despite almost complete
withdrawal of the payment moratorium. Deposit dollarisation remains
relatively high at 42%, but the pandemic shock has not reversed the
declining trend over the past decade. Domestic credit availability,
continued wage growth, albeit at a more moderate pace, and public
investment will support domestic demand.

102 SE Outlook 2022 www.intellinews.com