Hotels, luxury, logistics and private offices take center stage in the Czech Republic

In 2025, the Czech commercial real estate market underwent a significant transformation characterized by renewed confidence among investors and tenants. One of the most significant trends was the construction of office buildings tailored to specific institutions, particularly in the financial sector. Česká spořitelna, Generali, ČEZ, and Creditas decided to build their own representative headquarters in attractive locations in Prague.

After a sluggish first half of the year, the warehouse and logistics market experienced a dramatic upswing, with the third quarter alone bringing almost 0.5 million m2 of newly leased space. Construction continues at a record pace, with 1.7 million m2 of space in various stages of completion. This could bring the Czech market close to 20 million m2 in the coming years. Combined with an expanding motorway network, this underscores the country’s growing importance in European logistics.

Development of tourism sparked significant activity in the hotel sector, where PPF played a major role by gradually acquiring the Hilton, Four Seasons and Diplomat hotels in Prague. Total volume of hotel transactions in the Czech market exceeded €500 million in 2025 for the first time since 2019.

After completion of the reconstruction of the Fairmont Golden Prague hotel (formerly InterContinental), Prague’s premium retail location in Pařížská Street came to life. Prague’s wider city center experienced a wave of revitalization projects, such as 100Yards, Kotva, Hybernia and Savarin Palace. Primarily domestic capital once again drove expansion of the retail market: from the smallest retail parks to larger shopping centers such as Pernerka in Pardubice and Dornych in Brno, focused on creating experiential destinations.

The Czech Republic expects interest in logistics and premium retail

"A positive mood will ring in 2026. Demand for industrial space should remain above average thanks to the Czech Republic's strong position as a logistics and distribution center in Central Europe, with greater interest expected in smaller storage units for small businesses in particular. These often resemble retail parks rather than standard logistics parks and allow building permits to be obtained in the vicinity of residential areas. Positive developments can also be expected in retail," predicts Josef Stanko, director of market research at Colliers, adding that in retail, the focus will be on the expansion of ambitious premium projects in larger cities. Prague's main shopping streets and the greater Old Town area are set for further restructuring, as the capital, with eight million tourists a year, attracts new gastronomic and entertainment concepts as well as premium brands’ flagship stores. Retail parks and shopping centers in smaller towns will also flourish.

In the office segment, the start of 2026 will be characterized by cautious growth in rents, with developers continuing to push for the highest possible levels in newly completed projects. They will also place greater emphasis on the social aspect of office projects and their integration into urban planning.

Slovakia

The Slovak investment market experienced a significant recovery in 2025, with commercial real estate transactions exceeding €800 million: the highest figure in three years. The retail segment consolidated its dominant position, accounting for almost half of all transactions, with most of those focused on projects requiring extensive modernization or conversion, as evidenced by the acquisitions of the Vivo shopping center in Bratislava and Cassovia in Košice. Regional investors from Central and Eastern Europe played a significant role, accounting for 60 percent of transactions, with Czech investors accounting for two-fifths of that total.

The Bratislava office market is showing signs of saturation. "In 2025, no office building exceeding 10,000 m2 was completed, and the Slovak capital now has the highest stock of office space per thousand inhabitants among the Visegrad Four countries," comments Josef Stanko. In contrast, he says, the industrial sector has had to deal with global pressures on the automotive industry. That has resulted in the lowest level of industrial leasing in five years, even though developers continue to build speculative projects.

In 2026, Slovakia should benefit from a new wave of Asian investment, particularly from China. That country will support demand for industrial space in connection with suppliers for the Volvo factory in Košice, where mass production is scheduled to begin in early 2027. Office rents will rise due to limited new supply and rising construction costs, with no speculative construction of buildings larger than 15,000 m2 expected.

Central Europe in 2025

Bulgaria had a landmark year thanks to its full integration into the Schengen area, which removed border controls and significantly boosted investor confidence. The country's economy exceeded forecasts with accelerated GDP growth, falling unemployment and rising wages. The country also saw increased demand for real estate across all sectors. Tourism returned to pre-pandemic levels and retail experienced robust expansion, led primarily by discount chains and newly built retail parks.

Hungary also had a positive year, with a strong recovery in the investment market. The volume of investment in commercial real estate exceeded, in the first three quarters of the year, the entire previous year by a full 86 percent. This was mainly influenced by the influx of Asian investment, primarily from China and South Korea, with key projects from BMW, CATL and BYD factories. The office market began to show the first signs of stabilization, with vacancy rates falling to 13.4 percent. Meanwhile, the hotel sector benefited from foreign tourists spending more nights in the country.

Poland also maintained solid performance in commercial real estate, although transaction volume lagged behind the previous year due to lower activity among key buyers and fewer large portfolio deals. In office real estate, activity was concentrated primarily in Warsaw, where the sale of half of the Mennica Legacy Tower for €180 million was an important event. In the institutional rental housing sector, TAG Immobilien sold its large Resi4Rent portfolio for €565 million. Transactions involving retail parks, including the sale of 36 Vendo Park properties, dominated the retail sector.

Despite economic stagnation, Romania posted record levels of activity in the industrial and logistics sectors, but the office sector began to slow down. Not a single new office building was completed in the capital Bucharest: something that has not happened since at least the beginning of the millennium. Thus, the future outlook is not the best. "Although the country avoided a downgrade to speculative bond status, all major rating agencies maintain a negative outlook," explains Josef Stanko, noting that GDP growth was only 0.8 percent, with the private sector taking a wait-and-see approach due to tax changes and an unstable environment.

2026 in CEE with mixed prospects

"2026 will bring a number of new impulses to the commercial real estate market in Central and Eastern Europe – from growing investment and modernization of office and retail space to strengthening demand for residential and logistics projects," says Josef Stanko.

Bulgaria is facing a historic milestone in the form of adopting the euro, which is expected to strengthen the country's international credibility, improve ratings and attract further foreign investment. Retail parks will integrate entertainment and gastronomy into their concepts. In the residential market, premium projects will maintain their prices thanks to modern design and sustainability, while older properties risk losing their appeal.

Hungary expects GDP growth to strengthen to 2.5 percent thanks to the launch of production at new BMW, CATL and BYD plants. The continuing inflow of foreign investment and the recovery of the commercial real estate market indicate growing investor confidence, with demand for industrial and logistics space likely to accelerate thanks to e-commerce and the electric vehicle supply chain. However, the office market may face a temporary increase in vacancy rates due to government relocations.

In Poland, investment is expected to increase significantly next year thanks to EU funds and accelerated drawdown from the National Recovery Plan. The Warsaw office market could attract more capital thanks to declining vacancy rates, rising rents in the city center, and limited new supply. Retail parks, which are gradually transforming into community centers, will dominate that sector. The industrial and logistics sectors should continue to stabilize, and the housing sector will maintain its strong growth trajectory, with development of rental housing expected.

Romania faces a challenging year ahead with expected GDP growth of just over 1 percent, while the country faces fiscal challenges and the need for budgetary restraint. On the positive side, it could be a record year for infrastructure, with the possibility of completing over 300 kilometers of new expressways. That would significantly boost regional real estate markets. The residential market may see more significant price growth due to the widening gap between supply and demand as rental housing grows in popularity.