Despite the slowdown in activity in the first half of 2020 due to COVID-19 and the earthquake that hit Zagreb in April, the Croatian capital’s office market was very active in 2020 with total leasing activity amounting to 55,000 sqm, according to a market report by Cushman & Wakefield | CBS International Croatia.
At the end of 2020, the total supply of modern office stock in Zagreb amounted to app. 1.5 million sqm, including Class A and Class B office space, both speculative and owner-occupied buildings. There were no new completions in Q4 2020, however, several office projects are expected to be completed in the first half of 2021, including Infobip – Alpha Centauri campus Zagreb, in the area popularly named Zagreb Silicon Valley, which will upon completion total 20,000 sqm. Additionally, the construction works on the first phase of the City Island project in Buzin is progressing, the first phase should deliver 15,000 sqm of GLA of office space only.
Despite the slowdown in activity in the first half of 2020 due to the COVID-19 pandemic and the earthquake that hit Zagreb in April the same year, the office market was very active overall, with significant leasing activity. The total leasing activity amounted to 55,000 sqm in 2020, while the average size of deal in Q4 2020 was 990 sqm. By type of business, professional services sectors (35%) were the key performers, followed by computers and hi-tech (14%) and business services (11%).
The asking rental values of Class A office buildings vary between €13-15/sqm/month, while the asking rents of Class B stock amount to around €10-12/sqm/month. Prime yields for modern office space vary between 7.50 – 7.75%. After a marginal increase in the vacancy rate in Q2 and Q3 2020, the vacancy rate continued to increase and at the end of Q4 2020 reached the level of 4.58%
Sign up today for the latest news