There is a major shortage of high street retail space in Zagreb, with an occupancy rate of close to 100%. That's according to new Colliers International Croatia research. Units larger than 200 m² were most in demand from retailers in the city center - but only 4% of the total number of stores on Zagreb's high street are larger than that size. More than 75% are less than 55 m².
High street retail units in Zagreb
The shortage of retail space on the traditional high street, Ilica, is forcing retailers to look elsewhere in the city center. Retail units in the neighboring pedestrian areas, like Tkalciceva and Radiceva and around the main square, Ban Jelacic, are becoming more popular.
The new research found that average rental rates for up to 200 m² in the city center was between 80-120 /m² per month. For units between 300 m² and 800 m², says Colliers International Croatia in their new retail market overview, rents are 40-70 /m² per month and they are expected to rise.
Local landlords are becoming more aware of the need to offer larger, more representative retail units in order to attract strong brand names and therefore achieve higher rental levels. Since prime locations on the high street Ilica are extremely limited, landlords in the closest surrounding areas within the city center are refurbishing their existing buildings and stores and placing them on the market.
Tomislav Perovic, Managing Director of Colliers International Croatia, said, "We are seeing areas beyond the traditional high street in Zagreb become more interesting to retailers. When some big names situate themselves in other city center locations, the immediate surrounding areas could become more desirable to both retailers and consumers."
Vedrana Likan, General Manager of Colliers International Croatia, added, "This shortage of retail space on the high street has made some major international retailers enter the Croatian market through shopping malls, which is unusual in other markets. The lack of high street retail space is not only fuelling the expansion of shopping malls, but also stimulating city center locations to make themselves more attractive."