International Investment Bank (IIB) has announced the rapid progress of its new real estate initiative in Sarajevo, Bosnia and Herzegovina.

The project comprises a shopping mall and leisure complex, a commercial offices tower and a five-star hotel tower.

In August 2009, the Bahrain-based Sharia-compliant Bank acquired a 28.31 per cent equity stake in the project in partnership with Al Shiddi Group of Saudi Arabia.

Since the acquisition, the major piling and excavation works are now successfully completed, ahead of the initial time line projections.

'We believe that the project will play a positive role in stimulating the Bosnian economy and contributing significantly to the new economic landscape of the countr,' said IIB chief executive officer Aabed Al Zeera.

'Bosnia and Herzegovina's very stringent banking and urban planning regulatory environment, which has minimised the impact of the financial crisis, has ensured that there is a balanced real estate development.

'Moreover, the crisis provided an excellent opportunity for us to lock-in contracts given that construction material prices are attractive and contractors' terms are reasonable at present.

'Currently, Bosnia and Herzegovina faces a profound shortage in the supply of prime quality office space.

'Existing shopping and leisure infrastructure is very antiquated and significantly short of international standards in terms of not only size but also the depth and the variety of the facilities. This has created a considerable pent up demand for such infrastructure, especially amongst the upper and middle strata of Sarajevo's population.'

'Our strategy for this deal is to build the project and once rented, sell it as an income generating portfolio in a two to three year time horizon,' he said.-TradeArabia News Service