Haver Analytics
Haver Analytics


Alex Milojevic

Alex Milojevic has over 20 years of experience as a commercial real estate (CRE) and economics forecaster, contributing to CRE investment strategies. Throughout his career, he held key positions at renowned organizations, including Property Market Analysis in London as a UK real estate and economics forecaster, Cushman and Wakefield's London Office as Chief EMEA CRE and Economics Forecaster, INREV in Amsterdam as Research Manager, and Catella Real Estate AG in Munich as Head of Research.

Alex has a BSc in Financial Economics and an MSc in Applied Statistics and Stochastic Modelling.

Publications by Alex Milojevic

  • Understanding the cost associated with reducing the carbon footprint of buildings is crucial for the CRE industry's decarbonization efforts which however pose a difficult challenge. The European Commission and the European Environment Agency do not always add towards better understanding as their explanations of the CRE industry decarbonization targets can differ, while allowing only an indirect perception of associated costs. More concrete estimates, such as those from Oxford Economics one, suggest that the cost of decarbonization to extend the existing building life, by up to 25 years is approximately 30% of the buildings' capital values. However, this estimation is somewhat ambiguous, as the dynamics governing real estate values and costs associated with building decarbonization differ. The Deutsche Bank research paper associates the cost of decarbonization of its CRE portfolio mainly with retrofitting expenses aiming to reduce energy usage per square meter of buildings. The paper indicates that the cost of retrofitting Deutsche Bank’s existing residential real estate portfolio to the currently adequate Energy Performance Certificate (ECP) is estimated at around €80 Billion, while retrofitting its commercial real estate portfolio costs is at least ten times more. In this case uncertainty related to decarbonization costs estimates arise due to the changing nature of regulatory framework. For example, German form of ECP (Energieeinsparverordnung – EnEV) was introduced in 2002 and then amended in 2007, 2009, 2014, 2017, 2023, each time bringing more stringent regulations that were becoming more expensive to implement. The Catella Residential Investment Managament research paper estimates that the cost of decarbonizing typical residential dwellings in EU could be in the range of €25,000 to €40,000. This implies that the cost of decarbonizing the existing residential stock in the EU could be in a range €6 - €10 trillion. Expressed as a percentage, this accounts for approximately 65% of the annual EU28 GDP, as shown in the table.

  • As the real estate industry moves towards a zero-carbon world understanding the challenges of this journey is crucial. Recent discussions on decarbonization, within the industry, in large part focused on retrofitting and estimation of the brown discount's size. All in all, it is apparent that the commercial real estate (CRE) industry is gearing up to commit significant funds to this initiative. However, challenges have emerged as the era of abundant, cheap money for European CRE investment funds has come to an end. Investors are now seeking better returns in asset classes beyond real estate, leading to increased bankruptcies and starting to significantly affect residential developers and construction companies. In addition, there are substantial challenges posed by the expected refinancing gap over the next five years. City University's "Europe CRE Lending Survey" estimates commercial real estate debt at €1.5 trillion. The AEW research indicates a financing gap of around €46 billion over the next three years, a substantial increase from their previous estimates. Meanwhile, PWC research estimated cumulative financing for the next four to five years to exceed €125 billion. Simultaneously, European CRE transaction volumes have come to a halt, adding another layer of uncertainty for CRE decarbonization spending as there is uncertainty in respect of future real estate assets values.