The Croatian commercial real estate market is highly dynamic, and when it comes to high-quality and large investment projects, demand often exceeds supply, according to the annual research by Colliers Croatia.

Market activity is driven by macroeconomic stability and an influx of foreign capital, while investors simultaneously face challenges such as rising construction costs, regulatory changes, and geopolitical uncertainty.

The office and logistics sectors are experiencing significant growth within the commercial real estate segment, while the retail sector is adapting to new trends.

Rising Rents Due to Office Space Shortages

The Zagreb office real estate market, as the most active, is characterized by extremely low vacancy rates and a shortage of high-quality office spaces, according to Colliers’ expert analyses. Demand for such spaces remains stable, with A-class offices being the most sought-after, particularly among companies in the ICT, professional services, and pharmaceutical sectors.

Currently, only 2.5% of office capacity remains vacant, compared to an average vacancy rate of around 7% in neighboring countries. Demand is particularly strong in business zones such as Radnička Street, New Zagreb, and areas along major traffic corridors.

The limited supply is driving up rental prices, which currently range from €16.5 to €18.5 per square meter. While Zagreb remains the dominant market, demand is also growing in regional centers. These rental prices ensure office space owners a solid annual yield of 7.5%.

Encouraged by strong demand, investors are increasingly active. Several large projects are currently underway in Zagreb, including:

City Island Business Park in Buzin, near the Zagreb bypass, where KFK Tehnika is developing the third phase of a project totaling 40,000 square meters of office space. The entire City Island complex spans 80,000 square meters of land, offering 250,000 square meters of office space.

VMD Towers, a skyscraper at the intersection of Heinzelova and Vukovarska Streets, representing a €70 million investment.

Matrix Office Park, where the Polish investment firm GTC Group has begun construction on its fourth building, adding 10,500 square meters of net office space on Zagrebačka Avenue.

Pemo Business Arena in Lanište, a uniquely designed office building featuring a central opening and providing 10,000 square meters of premium office space.

Additionally, several significant projects are in preparation, including Petrius Jankomir (13,000 m²), Landmark Green Towers (32,000 m²), and TC3KGS (34,000 m²).

Major Changes in Shopping Centers

Changes in consumer habits are influencing the evolution of large shopping centers. As an increasing portion of mall space is dedicated to lifestyle offerings and hospitality, centers are focusing on providing a quality food and entertainment experience, which has become a key factor in their success.

Meanwhile, smaller shopping centers have found success with the neighborhood center model, which caters to visitors' everyday shopping needs. While large cities have long been saturated with malls, retail development is shifting toward smaller towns, with an emphasis on retail parks. Currently, 67,000 square meters of new retail parks are under construction, with future projects expected to follow this trend, except for the planned renovation of King Cross.

Notable newly opened retail parks include Supernova Jastrebarsko, Retail Park Ratfala Nova in Osijek, Retail Park Labin, SunPark Vodice, and Stop Shop parks in Vukovar, Dugo Selo, Virovitica, and Krapina. Croatia currently has 597,000 square meters of modern retail space, with a premium shopping center vacancy rate of around 4%. The average rental price in top-tier malls ranges between €20 and €25 per square meter.

Logistics Centers Are Expanding Rapidly

The logistics and warehouse real estate sector remains highly active, with demand primarily driven by retail chains, distributors, specialized logistics companies, and e-commerce businesses.

Currently, more than 230,000 square meters of new warehouse space is under construction, while an additional 565,000 square meters is in the planning phase.

Zagreb continues to lead in development, but industrial zones such as Kukuljanovo near Rijeka and Dugopolje near Split are also experiencing growing interest and expansion.

Rental prices for high-quality logistics and warehouse spaces range from €6.5 to €7 per square meter, while vacancy rates remain low.