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Market size Currently all distribution warehousing and logistics space available on the Zagreb market is over 15 years old, apart from the 35,000m 2 in the Jastrebarsko new logistics zone. Current stock of industrial property in 2006 was estimated to be 360,000m 2 , the majority built in the 1970s and the 1980s and including around 140,000m 2 of smaller owner-occupied warehouses which have been converted from old factories. The majority of this stock is located in either Žitnjak, offering approximately 91,500m 2 , and Jankomir, offering around 68,600m 2 of warehousing space. The domestic developer Robni Terminal owns a signifi cant proportion of existing stock in these locations, around 20,000m 2 in Jankomir and 80,000m 2 in Žitnjak. Logistics & industrial developments - Zagreb Location Total area (m²) Žitnjak 91,500 Jankomir 68,600 Jastrebarsko 35,000 Other owned small companies 100,000 Old factories transformed Source: King Sturge, January 2007 40,000 Supply The limited modern stock and unsatisfi ed occupier demand has triggered development around Zagreb. As with many developing markets, the fi rst units have been built as owner-occupied – Lidl’s Jastrebarsko facilities. The leasing market is slower to develop, although around 200,000m 2 of new space, mostly for rent, could be delivered to the market over the next two years. Just over half of this space, around 100,000m 2 , is already under construction and the rest is due to start construction in 2007. The warehousing will most be class A, conforming to European standards, with up to 12m height, modern loading ramps, high-quality fl ooring etc. Business Park Zagreb in Sveta Nedelja and business zone Sveta Helena are among the Zagreb Business Park www.kingsturge.com 13 biggest developments to be opened during 2007. Business Park Zagreb is close to the A3 (E70) motorway, leading to the Slovenian border. This area is approximately 5km from the Zagreb ring road and 6km from the Slovenian border and will offer 86,770m 2 of warehouses and 10,000m 2 of offi ce space when completed. The fi rst phase is due to be fi nished in the fi rst half of 2007 and second phase during 2008. The park is very well situated between the two main motorways that lead to west Europe, the A2 (E59) and the A3 (E70), and is closer to the city than other areas currently under development; as such the area has the potential to attract interest from other industrial developers. Two other logistics parks are due to start construction during 2007. Business zone ‘Bistra’, which is planned to be fi nished in 2008, is located in the northwest, approximately 20km from Zagreb along the A2 (E59) motorway, the major route to Austria. The second project is in Veliko Trgovišće, about 40km from Zagreb and about 25km from the Slovenian border along the A2 (E59). Construction works will start in the fi rst half of 2007 and will bring to the market approximately 25,000m 2 of new logistics space. Planned business zones - Zagreb Scheme Total Completion Lidl - Križ area (m²) 30,000 Under construction Business zone Sveta Helena 57,000 Under construction Business Park Zagreb - Sveta Nedelja 86,770 Under construction Business zone Bistra 150,000* Starts 2007 Business zone Veliko Trgovišće 25,000* Starts 2007 Footnote: * estimate Source: King Sturge, January 2007 Both domestic and international developers are active on the market including Croatian Poslovni Park Zagreb and Israeli Denisra. Trius, Intereuropa and Robni Terminali are among the more established developers in Zagreb.
Croatia Property Market 2007 Demand Currently the demand for modern warehouses signifi cantly exceeds supply; therefore when the supply currently under construction is completed the larger domestic and international companies are expected to upgrade their facilities, leaving a signifi cant amount of secondary stock vacant. First occupiers in the market include international retailers and large domestic producers. These companies represent an important percentage of the demand for larger distribution space, and many developers are targeting retail demand with their current schemes. It is expected that the leasing market will be quick to develop in Croatia due to high construction costs and land prices, excessive bureaucracy and the new water tax increases, keeping the total costs of owner-occupied building prohibitive. Notable occupiers include Philip Morris, Lagermax, Kühne & Nagel, Billa, Lidl, Time Shuttle, AWT, Fructal Zagreb, MUP Republike Hrvatske and Croatia Airlines. Vacancy At present the vacancy rate of modern space is close www.kingsturge.com Jastrebarsko Zagreb: new nearest industrial locations Veliko Trgovišće Sveta Nedelja 14 Sveta Helena to zero with occupiers forced to buy old property and rebuild it to fulfi l their requirements. However, there is ample available space in the old warehouses as there is little potential demand for this stock. Rents and land prices Prime rents in Zagreb are €5.5 to €6.5/m 2 /month for distribution warehouses and €6 to €8/m 2 /month for light-industrial units. Secondary rents for the distribution warehouses are €4 to €5/m 2 /month, and approximately €1 higher for the secondary light-industrial premises. As the supply of modern warehousing space in Croatia is still relatively tight and development costs are high, rents are high compared to Western Europe and CEE; for example, rental values in Zagreb are twice those in Warsaw. Industrial rents - Zagreb Property type Range 2006 €/m²/month Distribution warehouse Križ Light-industrial units Prime 5.5 - 6.5 6 - 8 Secondary 4 - 5 5 - 6 Footnote: net rents are exclusive of VAT and service charges. Net rents are for pure industrial use on built surface areas on an overall basis, assuming a provision of office areas. Source: King Sturge, January 2007
Page 1 and 2: Croatia Property Market 2007
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Page 5 and 6: Introduction Croatia Property Marke
Page 7 and 8: Zagreb ring road Croatia Property M
Page 9 and 10: Centre 1 Ilica 1 2 Castellum Croati
Page 11 and 12: Market size m 2 Croatia Property Ma
Page 13: Croatia Property Market 2007 Indust
Page 17 and 18: Location Croatia Property Market 20
Page 19 and 20: Croatia Property Market 2007 Gruppo
Page 21 and 22: Croatia Property Market 2007 Reside
Page 23 and 24: Croatia Property Market 2007 Reside
Page 25 and 26: Contacts Zagreb Croatia Property Ma

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