Increasing American Interest for Croatian Real Estate

The interest of American buyers for Croatian real estate is growing, according to American portal Realty & Investments, although this increasing interest has not resulted in any transactions yet. The Croatian market is expected to grow so that many of the investors who were 'feeling the situation' last year, are now starting to buy.

The American Chamber of Commerce cannot tell us much about this form of partnerships; however these are small private transactions, ones that the Chamber is not involved in. The Americans are focus on the coastal properties, and are particularly pleased that the prices have dropped due to a wide offer. They especially like Split, as a quality destination with the property prices that have dropped by 20%, making Split real estate a very cost-efficient investment with high rental potential.

Use of local agencies is recommended to individual buyers – and the agencies are now a lot more informed than in pre-recession times, also the service they offer has improved significantly. However, along with the recommendation, a warning can be read in the American media: even if the asking prices for real estate have dropped by 30%, insufficient data and unconvincing statistics make the competence in Croatian property prices questionable.

Despite the unreliable statistics, Croatia causes a lot of interest in big institutional investors, but the obstacle to a larger number of investments is the market limited in size, which does not put local market on the list of investment priorities, according to consultant company CB Richard Ellis. 'It is becoming more and more obvious that the quality of an investment opportunity is more important that the country it is in. If the opportunity for investment is attractive enough, then it will draw investors from all sides, and from USA.' Says Arn Willems, CBRE representative for Croatia.

This small market has last year drawn two international investment funds, W.P. Carey and Heitman, which have invested over 200 million in commercial real estate during 2010. 'The fact that these two groups have last year invested substantial amounts into Croatian real estate additionally encourages other USA investors', says Willems. The first W.P.Carey transaction in Croatia was the Agrokor logistic centre, for which they paid 77 million euro. Hietman has with Trigranit made a joint venture on the Arena Centar project.