The commercial property market in Croatia is showing increasing activity thanks to the country's strong economic growth and its edging closer to EU membership. Rents for trophy office buildings in the capital Zagreb - which accounts for the majority of the property activity in Croatia - have increased by 5-10% over the last year as a result of the high level of interest shown in established prime office locations, according to a new research report released Friday by King Sturge. The property adviser forecast this trend would continue in 2008 due to a scarcity of supply in the city.
The commercial property market in Croatia is showing increasing activity thanks to the country's strong economic growth and its edging closer to EU membership. Rents for trophy office buildings in the capital Zagreb - which accounts for the majority of the property activity in Croatia - have increased by 5-10% over the last year as a result of the high level of interest shown in established prime office locations, according to a new research report released Friday by King Sturge. The property adviser forecast this trend would continue in 2008 due to a scarcity of supply in the city.
In the retail sector, several projects are being developed which will add 400,000 m2 - 500,000 m2 of new shopping centre space to the city in the coming years. New types of retail centres such as outlet centres should be introduced in Zagreb in the near future.
In view of the current financial situation, King Sturge expects investment yields will remain stable in the coming months, following a couple of years of yield compression. Prime office yields currently range from 7.5% to 8.25%, while prime retail yields from 7% to 7.5%.
