RESEARCH REPORT

CBRE Croatia

H1 2014

Croatia Office MarketView

HOT TOPICS

OFFICE MARKET OVERVIEW

One new office building delivery in

H1 2014 GLA 5,600 sq m

Stock

Recovery of leasing activity

H1 2014 leasing activity figures at
52,400 sq m
Stable prime rents and prime
yields
Vacancy rate at around 17% for
four consecutive quarters

In H1 2014 one new office building was constructed bringing additional GLA
5,600 sq m to Zagrebs office market. Three notable projects still under
construction include VMD Strojarska, PoslovniCentarAdris and Conditum
office project. Planned completion of these projects, which will together
bring around 57,000 sg m to the market, is Q4 2014 or early 2015.
Around half of all class 'A' stock is currently located in the Business District
East (BDE), as is additional 25% of class 'B' stock. Zagrebs other relevant
business zones include the city center, CBD, Western Business District and
Novi Zagreb/Buzin area.
Leasing activity
At the end of H1 2014 total leasing activity in Zagreb amounted to 52,400 sq
m. This means it was 172% higher than at the end of H2 2013.
Of this, relocations made up 54%, renegotiations 15% while the actual takeup made up 21% of total leasing transaction volume.
The most notable transaction in this period relates to a relocation of
Croatian Telecom into SkyOffice office building in Zagrebs Western
Business District at a total area of 18,600 sq m.
Rents/Yields
Overall stabilization of office rents has been noted since mid/end of 2012
with no relevant changes in prime rental levels since the end of 2013.
Prime rents in H1 2014 stood at 14.5/sq m which represents a slight
decrease from Q4 2013 level of 15/sq m. Secondary rents stood at stable
7.50 - 10/sq m.
Prime yields also remain stable in the 8.00% - 8.30% range.
Vacancy
At the end of H1 2014 vacancy rate in Zagreb amounted to 17%.
The continued increase of vacancy levels over the past years ended in Q3
2013. Since then, the vacancy rate stabilized and unoccupied offices made
up 16% 18% of total available class A and B stock i.e. GLA 164,000 sq
m.
Due to expected stock increases, upcoming lease expiries and drop in
demand, vacancy rates are expected to increase as the year progresses.

2013

RESEARCH REPORT

CBRE Croatia

H1 2014

Croatia Office MarketView

Office market indicators

H2 2013

H1 2014

15.00

14.50

7.50 10.50

7.50 10.00

8.00 8.30%

8.00 8.30%

16.00 18.00%

16.00 18.00%

19,244

52,400

5,600

Prime headline rent (EUR/sq m per month)

Secondary rent (EUR/sq m per month)
Prime yield
Overall vacancy rate
Leasing activity (sq m)
Delivery of new stock (sq m)
Source: CBRE

ZAGREB OFFICE MARKET INDICATORS

Development completions ('000 sq m, left axis)

Take-up ('000 sq m, left axis)

Prime Rent (EUR/sq m/month, left axis)

Yield (%, right axis)

40

9,0

35

8,0

30

7,0
6,0

25

5,0

20

4,0

15

3,0

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Q4 2012

Q3 2012

Q2 2012

Q1 2012

Q4 2011

Q3 2011

Q2 2011

Q1 2011

Q4 2010

Q3 2010

Q2 2010

Q1 2010

Q4 2009

Q3 2009

Q2 2009

Q1 2009

Q4 2008

Q3 2008

0,0
Q2 2008

1,0

0
Q1 2008

2,0

5
Q4 2007

10

Bianca Bortolazzi
Head of Office and Industrial
Zagrebtower
Radnika Cesta 80
10000 Zagreb
Croatia
t: +385 1 6187 348
e: bianca@cbre.hr

DISCLAIMER
This report was prepared by IN RE d.o.o., a part of the CBRE Affiliate Network.
IN RE d.o.o. confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do
not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to
confirm independently their accuracy and completeness. This information is presented exclusively for use by IN RE d.o.o. clients and professionals
and all rights to the material are reserved and cannot be reproduced without prior written permission of IN RE d.o.o.

2013