The volume of investment transactions on the Croatian commercial real estate market in 2021 increased by 40 percent compared to the previous year, to about 700 million euros, most of which related to retail chains and hotels, according to the annual analysis of the Croatian consulting office, Colliers International.
Of the total volume of transactions in the commercial real estate market, 40 percent was retail, and only slightly less or 39 percent was hotels, while 12 percent was related to logistics and warehousing real estate, and 8 percent was related to offices.
Geographically, the strongest transaction activity in the commercial real estate market in 2021 was in Dalmatia, with about 40 percent of the total volume, then in Zagreb with a 25 percent share, and the rest relates to other parts of the country.
With regard to capital and investors, the largest share of total transactions in the real estate market in 2021 or 75 percent was foreign capital, with Colliers pointing out that the largest transaction was the acquisition of Sunce Hotels (Bluesun Hotels & Resorts) by a private investor with headquarters in the UAE and development company Eagle Hills.
Thus, according to the countries of investors, those from the UAE (United Arab Emirates) were in first place in 2021, with a share in transactions in the real estate market of 29 percent, and in second place are investors from Croatia with a share of 25 percent.
In third place are investors from Poland with a share in total transactions of 17 percent, and with them, according to Colliers, quite active in the commercial real estate market in Croatia in 2021 were investors from some Central and Eastern European countries, especially in retail sector. Thus, Poland's share in transactions is followed by investors from the Czech Republic with a share of 10 percent and Austria with a share of 7 percent.
Among domestic investors, they point out that institutional investors (pension funds and insurance companies) continued to increase allocations to commercial real estate and in 2021 accounted for almost 20 percent of total market transactions, focusing on several office, hotel and logistics investments.
"The entry of domestic institutional investors into the commercial real estate market is a sign that the market is becoming more mature and it is an encouraging signal for other investors," Colliers said, adding that transactions and returns in the real estate market are affected by inflation, low or negative interest rates, as well as rising construction costs, which, according to them, will delay the development of new offers and products.
Commenting on the data, Colliers also notes that in 2021, office and logistics assets were still in the focus of investors, but that most of the transactions were related to retail and hotels, which was also affected by a certain recovery in tourism.
Data from this consulting company from 2015 to 2021 show that in that period the highest volume of total transactions with commercial real estate of almost 900 million euros was in Croatia in 2016, and then in 2018 about 800 million euros.
In 2015, that volume was around 400 million euros, in 2017 around 300 million euros, in 2019 almost 600 million euros, and in 2020 around 500 million euros, and in 2021 it increased to around 700 million euros.