BMI View: Stable economic conditions are influencing good activity in the Croatian commercial propertymarket. Office real estate is seeing pent up demand from local businesses as confidence in the economyimproves, the retail sub-sector is observing growing demand from foreign brands on the back of strongtourism, and the industrial market is kept steady by decent external demand. We expect rental costs to keepsteady across the board over the medium term.
The Croatian economy is receiving a drive from robust private consumption and a healthy external sector.
Favourable employment prospects and decent wages growth has spurred consumer spending, while gooddemand from EU trade partners has boosted the essential shipbuilding industry, helping to maintain steadytrade volumes and maintain steady economic growth. However, structural imbalances, lack of reforms, afragile political landscape and concerning demographic trends continue to weigh on overall economicactivity. While we expect these issues to persist through 2017 and 2018, the influence on the commercialproperty market will be lessened by improving business conditions and steady demand.
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