City Centre or Business District

City Centre or Business District: Where Should Investors Build?

The question is slightly misleading. Investors are not simply choosing between a city centre and a business district. They are choosing between a proven office location and a cheaper site that may still need to prove itself.

A central location normally offers better transport, more services and stronger tenant demand. A good business district can provide larger plots, easier access and more parking. Both can work. An isolated office park built mainly because the land was cheap is the real danger.

City Centre: Lower Leasing Risk, Higher Cost

CBRE expects demand for central European offices to remain stronger because tenants want shorter commutes and nearby cafés, shops and services. Its 2025 occupier survey found that 94% of companies value access to public transport, while 80% prefer locations with a strong mix of amenities.

Warsaw shows the difference clearly. In Q1 2026, office vacancy was 6.5% in central zones and 12.2% outside the centre. Prime central rents were also materially higher.

A central project may therefore lease faster and attract more buyers when it is sold. However, the investor must accept:

• Higher land and construction costs
• More difficult planning and site access
• Smaller or less efficient floor plates
• Expensive underground parking
• Less space for future expansion

The higher rent is only valuable if it covers these additional costs.

Business District: Good When the Location Is Already Proven

A business district can be the better option for regional headquarters, IT companies, shared-service centres and other tenants needing large floors and significant parking.

New Belgrade is not a weak alternative to Belgrade’s historic centre. It is an established office market with modern buildings, large occupiers and strong road access. Zagreb’s Radnička corridor has a similar role.

Ljubljana also needs a different approach from cities with metro systems. Public transport is weaker, so road access and garages remain important. A modern office near the ring road can compete with a central building if it also provides other services and a pleasant working environment.

The risk is building in a district that exists only in the development plan. One office building surrounded by empty plots is not a business district.

What Should the Investor Test?

Before buying the land, the investor should ask:

• Are major tenants already operating nearby?
• Can employees reach the site easily by public transport and car?
• Is sufficient parking possible at a reasonable cost?
• Are food, shops and daily services within walking distance?
• Does the lower land cost cover any rent discount or slower leasing?
• Would an institutional buyer accept the location at exit?

Investor Verdict

For a speculative project aimed at finance, legal, consulting and other premium tenants, a central or near-central mixed-use location is normally the safer choice.

An established business district can be equally strong for companies that need larger floors, parking and easy road access. This is particularly relevant in Belgrade, Zagreb and Ljubljana, where the best office location is not always inside the historic centre.

The rule is simple: choose the business district only when it already works as one. Cheap land does not compensate for weak access, missing services and a limited tenant pool.

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^{Sources: CBRE — European Offices Outlook 2026; CBRE — European Office Occupier Sentiment Survey 2025; AXI IMMO — Warsaw Office Market Q1 2026; Colliers — Slovenia Market Outlook; Colliers — Croatian Market Snapshot 2026; iO Partners — Belgrade Office Market Q2 2026; Savills — The Prime Office Today and in the Future.}

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