Croatia’s real estate market in 2024 and outlook for 2025

Croatia’s economy showed steady growth in 2024, with a projected GDP increase of 3.6%, expected to continue at 3.3% in 2025. Inflation, though easing, remained persistent compared to other Eurozone countries. The European Central Bank reduced key interest rates four times throughout the year, reflecting improved economic conditions. Croatia’s credit rating saw an upgrade from all three major rating agencies, reaching A3 from Moody’s and A- from S&P and Fitch. The average net salary in November 2024 rose to €1,366, a year-on-year increase of 13.1%.

Office Market Trends

Demand for office space remained stable, with ICT firms, professional services, and pharmaceutical companies showing the most interest in A-class buildings. Business expansion, rising operational costs, and the pursuit of optimal lease agreements continued to drive leasing activity. Prime rents increased slightly due to low vacancy rates and limited new office space availability, ranging between €16.5/m² and €18.5/m² per month.

New office projects under construction include Matrix D (10,500 m²), Buzin City Island Phase III (40,000 m²), VMD Towers (18,000 m²), and Pemo Business Arena (9,900 m²). Future projects such as Petrius Jankomir (13,000 m²), Landmark Green Towers (32,000 m²), and TC3KGS (34,000 m²) have been announced, reflecting continued investor interest.

Retail Market Developments

Consumer preferences continued to shift toward entertainment, lifestyle, and food and beverage segments, driving growth in hospitality and food courts within shopping centers. Neighborhood retail models, designed for daily convenience, emerged as the most successful format. Retailers increasingly focused on secondary and tertiary cities, leading to the development of 67,000 m² of new retail parks. All upcoming retail projects follow this format, except for the King Cross renovation.

New retail openings in 2024 included Supernova Jastrebarsko, Retail Park Ratfala Nova (Osijek), Retail Park Labin, SunPark Vodice, and multiple Stop Shop parks in Vukovar, Dugo Selo, Virovitica, and Krapina.

Industrial & Logistics Growth

Demand for logistics space was driven by retail, distribution, third-party logistics (3PL), and e-commerce. Most logistics stock remained concentrated around Zagreb, with emerging industrial zones in Kukuljanovo (near Rijeka) and Dugopolje (near Split).

Key logistics developments in Zagreb included projects in Meridian 16, Zdenčina, Lučko, Donja Bistra, Sveta Nedjelja, and Samobor. Around 230,000 m² of logistics space was under construction, with an additional 565,000 m² announced. Major projects included RC Europe, VGP Park Zagreb, and expansions in Velika Gorica by DPD and Log Expert. New entrants, such as Accolade and Medika, signaled growing investor confidence in the sector.

Tourism and Hospitality Performance

Croatia’s tourism sector surpassed pre-pandemic levels in 2024, with a record number of arrivals and overnight stays. Hotels accounted for 23% of overnight stays, while private rentals (37%) and campsites (19%) remained dominant. Germany, Slovenia, and Austria remained the top source markets, with notable increases in visitors from non-traditional markets (+7.9%) and domestic travelers (+7.5%).

Significant hotel openings included Pullman Hotel Zagreb (193 units), Keight Hotel Curio Collection by Hilton in Opatija (54 units), and The Isolano Autograph Collection by Marriott on Cres (49 units). Several high-profile developments are underway, such as Hotel Marjan in Split (285 units, €100 million investment), Pinea Hotel in Poreč (500 units, €130 million), and Hyatt Regency Zadar (133 hotel units, 200 residential units, €55 million investment).

Residential Market Trends

The residential sector saw an 8.5% increase in building permits compared to 2023. To address housing affordability and financial stability, Croatia’s central bank introduced stricter lending criteria to mitigate household debt risks. Meanwhile, the Croatia Housing Plan 2030 aimed to promote sustainable, affordable housing through financial and tax incentives.

Several major residential projects were announced, including Museum Residence Zagreb, Franc Project Zagreb (127 units), and Project Blato Zagreb (209 units). Other developments include Project La Mula in Poreč (106 units), Project Veruda in Pula, and Project Porta in Split (90 units).

As of late 2024, housing loan interest rates had started to decline, encouraging further residential investments. The total volume of new housing loans reached €2.5 billion, reflecting strong demand despite rising prices.

Outlook for 2025

Croatia’s real estate market is poised for continued growth in 2025, with stable demand across office, retail, and logistics sectors. The hospitality sector is expected to maintain its momentum, supported by increasing tourist arrivals and investments in high-end accommodations. The residential market will likely see further expansion, driven by a combination of government initiatives and improved lending conditions.

With key economic indicators showing resilience and investment activity remaining strong, Croatia’s real estate landscape is set for another year of steady development and strategic expansion.

Source: Colliers