Commercial Real Estate - Croatia | Statista Market Forecast

The Commercial Real Estate market market in Croatia is projected to reach a value of US$72.92bn in 2024.
It is expected to display an annual growth rate (CAGR 2024-2029) of 1.56%, leading to a market volume of US$78.81bn by 2029.
When compared globally, the United States will generate the highest value in the Real Estate sector, with US$25.3tn in 2024.
Croatia's commercial real estate market is experiencing a surge in demand due to its growing tourism industry.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Croatia has been experiencing significant growth and development in recent years.

Customer preferences: One of the main customer preferences in the Commercial Real Estate market in Croatia is the demand for modern and well-equipped office spaces. With the increasing number of businesses and foreign companies establishing their presence in the country, there is a growing need for high-quality office spaces that can accommodate the needs of these companies. Additionally, there is also a demand for retail spaces in prime locations, as the retail sector continues to expand.

Trends in the market: One of the key trends in the Commercial Real Estate market in Croatia is the increasing investment in the development of mixed-use properties. Developers are recognizing the potential in creating spaces that combine residential, commercial, and recreational elements. This trend is driven by the changing lifestyle preferences of consumers, who are looking for convenience and accessibility in their everyday lives. Mixed-use properties offer a one-stop solution, providing residents with easy access to amenities such as shops, restaurants, and entertainment options. Another trend in the market is the growing interest from international investors. Croatia's strategic location, attractive investment opportunities, and improving business environment have caught the attention of foreign investors. These investors see the potential for high returns on investment in the Commercial Real Estate sector, particularly in the hospitality and tourism industry. Croatia's popularity as a tourist destination has been steadily increasing, leading to a surge in demand for hotels, resorts, and other accommodation options.

Local special circumstances: Croatia's accession to the European Union in 2013 has had a positive impact on the Commercial Real Estate market. The country's integration with the EU has opened up new opportunities for trade and investment, attracting foreign companies to establish their presence in Croatia. This has led to an increase in demand for office spaces and commercial properties. Additionally, Croatia's beautiful coastline and rich cultural heritage make it an attractive destination for both tourists and investors. The tourism sector plays a significant role in the country's economy, and the demand for commercial properties in popular tourist destinations such as Dubrovnik and Split is on the rise.

Underlying macroeconomic factors: Several macroeconomic factors contribute to the development of the Commercial Real Estate market in Croatia. The country's stable economic growth, low inflation rate, and favorable business environment create a conducive environment for investment. The government has also implemented various reforms to attract foreign direct investment and promote economic development. Furthermore, Croatia's strategic location in Southeast Europe makes it an important hub for trade and commerce. The country benefits from its proximity to major European markets, providing opportunities for businesses to expand their operations and establish a presence in Croatia. In conclusion, the Commercial Real Estate market in Croatia is experiencing growth and development due to customer preferences for modern office and retail spaces, the trend towards mixed-use properties, the interest from international investors, Croatia's EU membership, its tourism sector, and favorable macroeconomic factors. These factors contribute to the overall positive outlook for the Commercial Real Estate market in Croatia.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.