The volume of investment transactions on the Croatian commercial real estate market increased by 40% from 2020 to about €700 million in 2021, according to an annual report by the Zagreb office of the Colliers International consulting company.

Retail assets accounted for 40% of the transaction volume (compared to 45% in 2020), hotels for 39% (22% in 2020), logistics assets for 12% (10% in 2020) and offices for 8% (23% in 2020).

Geographically, transaction activity was strongest in Dalmatia with approximately 40% of the total volume, followed by Zagreb with about 25%.

Foreign capital accounted for 75% of the transaction volume. The largest transaction in 2021 was the acquisition of Sunce Hoteli (BlueSun Hotels and Resorts brand) by Eagle Hills, the private investment and development company based in the United Arab Emirates.

Last year, UAE-based companies were the most active investors in the Croatian real estate market, with 29% of the total transactions. They were followed by investors from Croatia (25%), Poland (17%), the Czech Republic (10%) and Austria (7%).

Domestic institutional investors (pension funds and insurance companies) continued increasing allocation to commercial real estate. Last year they made almost 20% of the total market transaction volume, with several deals in the office, hotel and logistics sectors.

Domestic institutional investors’ entry to the commercial real estate market is a sign of the market becoming more mature and an encouraging signal for other investors, Colliers International says, noting that transactions and yields are affected by inflation panic, low or negative interest rates, and rising construction costs, which are expected to delay development of new supply and product.

Data provided by this consulting company shows that the highest volume of commercial real estate transactions in 2015-2021 was recorded in 2016 – nearly €900 million. It was about €400 million in 2015, about €300 million in 2017, about €800 million in 2018, nearly €600 million in 2019, about €500 million in 2020 and about €700 million in 2021.