Predrag Tutić, CBS International: We anticipate a continuation of the investment wave across all market segments

It has only been six months since joining the Eurozone, and now we are starting to see how significant it has been for the Croatian economy and the preservation of financial stability, consequently impacting the continuation of investments in the real estate market.


Croatia has an advantage compared to some countries in the region, such as Hungary, the Czech Republic, or Poland, and has the potential to attract investors from those markets due to its stable financial system and significantly higher competitiveness.

Despite the persistent inflation, investors have recognized the favorable opportunities in Croatia and the stable returns on investments, making them ready for further expansion and investments across almost all segments of the real estate market.

In the next 2 years, we expect development over 100,000 square meters of new office spaces in Zagreb

This indicates a significant expansion in the commercial real estate sector, offering opportunities for businesses and investors alike. The addition of these new office spaces will contribute to meeting the growing demand for modern and well-equipped workplaces in the city.

The office market in Zagreb is becoming very dynamic, with over 30,000 sq m leased in the first half of the year. This strong demand for office spaces continues, driving the construction of new projects. The substantial amount of leased space reflects the growing interest from businesses and organizations in establishing or expanding their presence in Zagreb.

By the end of 2025, it is projected that slightly over 100,000 sq m of new office space will be completed in Zagreb market. These developments will help alleviate the pressure on existing office buildings and decrease the current vacancy rate, which is at the moment below 2%. The increased supply of office spaces will offer a broader range of options for companies looking to relocate their offices to newer and more modern buildings.

In the first quarter of this year, the main drivers when it comes to office market were public institutions, accounting for an impressive 55% share in the total transacted area. They were followed by companies in the IT sector with a 32% share, and companies in the manufacturing sector with a 5% share in the overall transactions.

Rental levels for Class B office spaces ranged from 10 to 12.50 EUR/sq m, while Class A office rental levels were between 13 and 15.50 EUR/sq m. The top-performing properties in the market, known as prime buildings, commanded prices of 16 to 17 EUR/sq m. These price differentials reflect the varying quality and features of the office spaces available, with Prime buildings offering the highest standard of amenities and facilities.

With global trade and the growth of e-commerce, the demand for efficient logistics solutions and infrastructure is increasing.

Croatia has made a significant leap onto investors’ logistics map in the past years. One notable example is the commencement of one of the largest industrial greenfield investments in Osijek by the American company Jabil. This investment demonstrates the growing interest and confidence of investors in Croatia’s logistics potential and country’s competitive advantages, such as skilled labor, favorable business environment, and strategic location.

The investment cycle in logistics facilities continues in the vicinity of Zagreb. Currently, there are over 250,000 square meters of prime logistics spaces under construction, allowing for expansion and relocation from old and inadequate facilities to new ones. This development is expected to stimulate new investments in the logistics, retail, industrial, and manufacturing sectors.

The current rental levels for prime logistics spaces range from 5.50 to 6.00 EUR/m2, while for Class B warehouse spaces, rents still range from 4.50 to 5.00 EUR/sq m. These price ranges reflect the quality, location, and amenities offered by the respective spaces. Prime logistics spaces generally command higher prices due to their superior features, modern infrastructure, and better accessibility. On the other hand, Class B warehouse spaces are more budget-friendly options, often offering functional storage solutions without the premium amenities associated with higher-class facilities.


We expect a stabilization of residential property prices

Although the growth in prices of residential properties transacted in 2022 was 14% higher compared to the previous year, we are seeing a gradual stabilization of asking prices for apartments in the first half of this year, indicating a lack of further upward trend.

However, we still lack quality strategies in our housing policy for the development of new residential properties throughout Croatia. With a new approach to urban planning and urbanism, these strategies could have (and should have) an impact on stabilizing residential property prices.

In the regions of Istria and Dalmatia, almost every third buyer is a foreigner, so the prices of residential properties are becoming excessively high and there for unaffordable for the local population within today’s framework.


Real estate development and ESG (Environmental, Social, and Governance) are important concepts in the real estate industry.

ESG is a framework used to assess and integrate environmental, social, and governance aspects into business operations. The environmental aspect of ESG relates to the impact of business activities on the environment, including issues such as energy efficiency, climate change, and waste management. The social aspect encompasses the impact of business activities on the community, employees, and social inclusion. The governance aspect relates to proper corporate management, transparency, and ethical standards.

Investing in the construction of sustainable buildings may initially involve higher costs compared to standard construction. However, in the medium and long term, there is a reduction in operational expenses, making such an investment financially viable, not only for the investor but also for the tenant or occupant of the building.

Financial institutions are also encouraging investors to develop sustainable real estate projects due to their commitment to socially responsible business practices.