Rents for prime office space in the Croatian capital Zagreb have stabilised at EUR 14-17 per square metre following a period of downward pressure caused by a massive increase in supply, new research by property advisor Colliers International Croatia has found.
Rents for prime office space in the Croatian capital Zagreb have stabilised at EUR 14-17 per square metre following a period of downward pressure caused by a massive increase in supply, new research by property advisor Colliers International Croatia has found.
The majority of new landmark buildings in the city had less than 50% occupancy due to a significant increase in the vacancy rate last year, but the situation has changed markedly and most new buildings have greater than 90% occupancy, according to Colliers International.
One effect of the big increase in supply in 2006, Colliers International Croatia said, was that negotiating power shifted from investors to tenants, so that today the office market is tenant-driven. The latest figures from the third quarter of this year show a take-up of 20,000 m2 net leaseable area. The property advisor described this as a 'solid amount in a traditionally slow period'.
The report said the next generation of 'smart' office buildings, which will utilise new technologies to reduce energy costs, will come on stream in Zagreb in the next few years. This will likely force other Class A office buildings to follow their example. The next wave of office expansion is likely to spread beyond the borders of the current Central Business District, with significant new developments recently announced.
Tomislav Perovic, managing director of Colliers International Croatia, said, 'Absorption has accelerated in 2007 as companies have used the opportunity of favourable terms to relocate. This means that the office market in Zagreb remains dynamic.' Colliers International Southeast Europe, the largest property advisor in the region, was recently named Property Consultant of the Year for the region for the second year in a row.
The new research appears in the Croatia Office Overview for the second half of 2007 and is available for download. Click on the link below to go directly to the reports section of the Colliers website.