CBRE: Office Space Running Out in Some Parts of Zagreb

A Year of Adaptation and Market Growth

"The past year has been a year of adaptation in European markets, with the expectation that economic growth will continue alongside further reductions in interest rates, which will support overall market activity," said Jana Jovanović, Head of Market Research for the Southeast Europe region at CBRE.

Investors focused primarily on the retail sector, which accounted for 40% of the total transaction volume, followed by the traditionally active office sector, which held nearly a 30% share.

The office space market in Southeast Europe has remained relatively stable in recent months, with increased transaction complexity due to tenants adjusting their real estate strategies in response to global trends.

A slight increase in rental prices has been recorded—only 2 to 3% in the Serbian and Croatian markets. At the same time, the vacancy rate for office space has decreased, reaching around 4% in Belgrade. "This 40% drop in availability in Belgrade compared to last year is due to the fact that there has been no significant increase in the total supply of modern office space, while demand has remained at a solid level.

Overall, we are witnessing a stabilization after a record supply of newly built office buildings in 2023," said Ivan Stojić, Head of Office Space for the Adria region at CBRE, as reported by Biznis.rs. In 2024, the highest number of newly built square meters of office space was recorded in the Zagreb and Sofia markets, where supply increased by approximately 50,000 square meters.

"When discussing 2025, Belgrade and Sofia are expected to lead in the growth of office space supply, with more than 300,000 new square meters of office space planned for these markets. This represents an expected annual supply growth of about 10%, signaling a dynamic period and expansion of the commercial real estate sector in the region," Stojić emphasized.

Assessing the regional situation, Stojić highlighted that the availability rate of office space in Croatia and Slovenia is extremely low, with some areas in Zagreb having less than 1% vacancy—a unique case not only in the region but also in Europe.

Although office space availability rates are expected to rise slightly due to increased supply, overall availability rates are expected to remain stable in key regional markets. The macroeconomic environment has contributed to stable levels of office space transactions, with the four key regional markets recording an overall 10% growth in lease transactions.

The industrial and logistics real estate sector has been one of the most promising in Europe in recent years, and its growth is expected to continue. The same trend is observed in key Southeast European markets, where supply in this sector increased by 30% over the past year.

Supply growth was particularly notable in Belgrade and the Zagreb metropolitan area, where the total supply increased by more than 50% and 30%, respectively.

"For example, in the Zagreb area, the construction of 350,000 square meters of speculative logistics space—meaning space intended for lease rather than owner-occupation—is expected within the next two years. The current supply of such space stands at 500,000 square meters, meaning this represents a 70% increase in supply," emphasized Sonja Lončarević, Associate Director in the CBRE Industrial and Logistics Real Estate Department.

4o