Record high transactions expected in 2016.
From the total transaction volume in 2015, about 69 percent was related to hotel real estate, 29 percent to office space, and two percent to retail. With the first signs that the economy is coming out of recession, the real estate market has started recovering and the projections for 2016 are pretty optimistic after a long time, reports Poslovni.hr on March 27, 2016.
Last year, the investors have shown an active interest in the domestic market thanks to the combination of recovery, historically low cost of money in the euro zone and a better business climate, with hotels attracting the most attention. The consulting firm Colliers International expects a number of new development projects and transactions. “After several years of low liquidity, large investment transactions will be implemented in 2016, particularly in retail and office space sector. Prices have dropped, opening the opportunity for higher returns”, the Colliers analysis said.
The mosaic which depicts good prospects for the local market also shows that the market is in the middle of the investment cycle. In Europe, due to low-interest rates, there are fewer investment opportunities, and in Croatia, where European rules apply, the first echelon of investors has already completed the initial projects. The successful ones are now attracting the interest of mostly foreign investors. These are the top class office buildings, shopping malls and hotels.
“All of these are mature products, and their most important characteristic is that they can be sold”, said Vedrana Likan from Colliers. In the retail sector, large transactions for this year have already been announced. Six centres are changing their ownership structure. For example, Morgan Stanley is finishing the acquisition of City Centres One East and West in Zagreb.
Colliers also predicts the rise in rental prices. In the top areas of Zagreb, they currently range from 20 to 25 euros per square metre per month, and they have touched the bottom not so long ago. As for the “high-end” streets, like Ilica in Zagreb, Marmontova in Split or Stradun in Dubrovnik, where the occupancy remains above 90 percent, the rent depends on the micro-location and ranges from 25 to 100 euros per square metre.
