Thursday, 24 September 2026
CIJ.World’s country-by-country review of European property markets during the first half and second quarter of 2026 has examined developments across a broad range of countries, from the continent’s largest investment markets to smaller economies undergoing rapid structural change. The coverage includes the United Kingdom, Germany, France, Italy, Spain, Portugal, the Netherlands, Belgium, Austria, Finland and Greece, alongside Central and Eastern European markets including Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Serbia, Lithuania, Latvia, Estonia and Moldova. Türkiye has also formed part of the wider regional analysis.
Viewed individually, these markets tell very different stories. Germany is dealing with industrial restructuring and changing manufacturing requirements. Spain faces a substantial housing shortage concentrated in its fastest-growing regions while logistics and data-centre development spread into new locations. Finland combines high overall office vacancy with much tighter conditions in Helsinki’s best locations and growing competition for grid capacity. Lithuania and Estonia are seeing defence and manufacturing investment influence industrial development, while Slovakia and Hungary demonstrate how logistics pipelines, office availability and regional capital are reshaping established CEE property markets.
Southern Europe presents another set of conditions. Italy has experienced renewed investment across logistics, retail, hotels and alternative sectors, while Portugal is seeing institutional capital expand into areas including senior housing. Greece combines recovering investment with pressures affecting housing, tourism and logistics infrastructure. In the Netherlands, housing shortages, grid congestion, office-market bifurcation and changing logistics requirements are occurring simultaneously.
Central Europe is also showing how the investment recovery is changing in character. Poland remains one of the region’s largest and most liquid markets, but capital is becoming increasingly selective about sector, building quality and income. Retail has returned to investors’ attention, while logistics, offices and living assets are being assessed more closely according to location and long-term occupier demand. The Czech Republic continues to demonstrate the strength of domestic capital, with Czech investors not only active at home but increasingly important buyers across neighbouring CEE markets.
Smaller markets provide equally important evidence. Croatia combines extremely low modern logistics vacancy with a substantial development pipeline and rapidly increasing housing prices. Slovenia illustrates how a market can have office stock while still lacking sufficient modern accommodation. Latvia continues to deal with an ageing residential base and imbalances in industrial supply, while Moldova faces the challenge of creating sufficient modern, institutionally investible property as its economic links with the European Union deepen. Serbia’s large infrastructure and development programme around Expo 2027 demonstrates how public investment can begin creating entirely new property districts.
Despite these differences, CIJ.World’s country reporting reveals a remarkably consistent underlying pattern. Europe has a substantial amount of real estate, but an increasing proportion of that stock does not correspond with what occupiers, investors and the changing European economy now require. The issue is therefore becoming less about whether Europe has enough buildings and more about whether it has the right buildings in the right places.
Offices can record high vacancy while companies compete for the best space. Industrial markets can contain available warehouses while manufacturers and logistics operators struggle to find facilities with the required power, dimensions or technical specifications. Development land can exist without sufficient electricity capacity. Housing can be plentiful nationally while remaining scarce or unaffordable in cities and regions experiencing the strongest employment and population growth.
Taken together, the H1 and Q2 2026 country reports suggest that quality, suitability and infrastructure are becoming more important than the simple quantity of existing property. The market is increasingly divided not only by country or sector, but by whether individual assets remain capable of serving the economy developing around them.
Office markets provide some of the clearest examples. In Bratislava, approximately 13.4% of modern office stock was vacant at the end of Q2 2026, representing roughly 235,500 sqm of available accommodation. Yet prime rents increased to around €22 per sqm per month and higher-standard properties captured approximately 63% of transactions during the quarter. The apparent contradiction is important. A vacant office and an office that a major company wants to occupy are increasingly not the same product.
Budapest presents a related problem. Headline vacancy remains significant, but companies searching for large, modern Grade A premises face a much narrower selection than the overall availability figure suggests. Helsinki provides another variation, with high vacancy across the wider market contrasting with much tighter conditions in Helsinki’s CBD. Ljubljana has similarly demonstrated that the relevant shortage is not necessarily total office floorspace but modern accommodation meeting current occupier expectations.
London shows the same division on a much larger scale. Leasing activity has been concentrated heavily in modern Grade A buildings, while ageing offices face a more difficult future as owners assess whether refurbishment, conversion or redevelopment remains economically viable. Across these markets, headline vacancy alone is becoming an increasingly inadequate measure of the office accommodation that businesses actually want.
Industrial and logistics markets reveal another version of the same structural change. Lithuania’s industrial property map is being influenced by investment in defence manufacturing, transport infrastructure and new production capacity. Projects connected with defence and manufacturing are adding a different type of occupier requirement to conventional warehouse demand.
Germany is undergoing a broader industrial transformation. Automotive restructuring, defence expenditure, manufacturing investment, brownfield redevelopment and increasing interest from Asian companies are changing where industrial property demand could emerge and what buildings occupiers require. Estonia is also developing industrial capacity alongside investment in defence-related production, while Hungary is seeing logistics activity expand beyond its traditional concentration around Budapest.
Poland remains one of Europe’s largest logistics markets, but its scale does not eliminate the distinction between modern, strategically located facilities and older or less competitive stock. As in other European markets, occupier requirements are increasingly influenced by energy efficiency, automation, labour availability and proximity to transport infrastructure rather than floorspace alone.
Italy’s industrial market is increasingly connected with manufacturing clusters and nearshoring, while Spain is showing how logistics demand can move beyond its largest established markets. Zaragoza and Bilbao demonstrate that secondary logistics locations can become strategically important when infrastructure, industry and available land combine effectively.
Croatia provides perhaps the clearest example of genuine physical scarcity. Modern logistics vacancy around Zagreb fell to approximately 1% during Q2, encouraging developers and occupiers to look beyond the capital’s traditional boundaries. Slovakia demonstrates why the picture cannot be generalised even within Central Europe. Around 265,800 sqm of industrial and logistics property was under construction at the end of Q2 while vacancy stood at approximately 7.8%. The issue there is less an immediate shortage than whether the substantial pipeline can secure sufficient occupier demand.
The underlying question across these markets is increasingly similar: not how much warehouse space exists, but whether available buildings are where companies need them and capable of supporting the operations intended for them.
Electricity is becoming an increasingly important part of that calculation. CIJ.World’s reviews of Finland, Spain, the Netherlands, France and England repeatedly encountered grid availability as a real estate constraint. This is particularly visible in data centres, where access to sufficient power can determine whether a site has meaningful development potential.
The traditional property equation begins with land, planning, transport connections and labour. For a growing number of industrial and technology projects, another question now comes much earlier in the process: how much power can actually be delivered to the site, and when? That distinction can fundamentally alter development potential. Two sites may appear comparable geographically while having very different economic prospects because one can secure the electricity required by an occupier and the other cannot. In some markets, access to grid capacity is consequently becoming almost as important as access to land.
Housing exposes the mismatch from another direction. Spain faces a substantial housing deficit, but the shortage is heavily concentrated in the country’s strongest employment and population centres. The problem is therefore not simply Spain’s total number of homes, but whether sufficient housing exists where people increasingly need to live.
The Netherlands presents another contradiction. Residential investment can recover while changes affecting the private rental sector reduce the amount of housing available to tenants. Finland faces a different stage of the same problem, where weak construction and reduced permitting today could contribute to insufficient new housing when demand strengthens.
Croatia has recorded rapidly increasing residential prices while transaction numbers have fallen sharply, illustrating how affordability can weaken access to the market even when underlying housing demand remains. Austria combines housing pressures with financial difficulties affecting parts of the residential development market. Latvia’s housing market continues to rely heavily on older Soviet-era residential stock, while Moldova’s expanding mortgage market is creating additional demand in a market where modern institutional supply remains comparatively limited.
Location, affordability, age, energy performance, household size and tenure are therefore becoming as important as the number of dwellings when assessing whether existing housing corresponds with actual demand.
Investment markets are responding to the same fragmentation. CIJ.World’s H1 and Q2 reporting shows capital returning to European property, but the recovery is uneven and increasingly selective. In Slovakia, Czech and Slovak investors have become particularly important as transaction activity recovers. Hungary is experiencing a greater role for domestic and regional capital, while Czech investors have become increasingly visible across CEE. Spain has demonstrated strong domestic participation alongside international investment, while Finland has attracted substantial foreign capital into industrial and logistics assets.
Poland offers another indication of changing investor attitudes. Retail has returned as an investible sector, with Poland and Italy among the markets where retail accounted for a particularly significant share of investment activity during Q2. This does not indicate a return to indiscriminate buying. Instead, investors are concentrating on properties with resilient income, strong locations and credible long-term occupier demand.
Italy shows the same pattern. Shopping centres and retail parks have returned to institutional buying lists, but investors are distinguishing between dominant or well-positioned assets and properties facing longer-term structural difficulties. England’s retail parks are benefiting from limited supply and occupier demand, while Finland and Austria have also recorded substantial retail investment.
The lesson extends beyond retail. A shopping centre is not automatically a weak investment because it belongs to the retail sector, just as an office is not automatically attractive because it is centrally located, or a warehouse attractive simply because it belongs to logistics. Location, income, technical capability, energy performance, adaptability and relevance to occupiers increasingly determine where capital is prepared to invest.
This helps explain why prime and secondary property performance is separating across so many European markets. Modern, well-located and technically capable assets occupy a comparatively limited pool of property able to satisfy current requirements. Older, inefficient or poorly located buildings face a more difficult calculation: invest substantially, reposition the property, convert it to another use or accept the possibility of declining competitiveness.
The transformation is also changing Europe’s property geography. Defence manufacturing is creating new requirements in Lithuania, Germany and Estonia. Nearshoring and international manufacturing investment are influencing industrial locations. Logistics activity is expanding beyond established hubs in Hungary, Spain, Croatia and other markets. Grid capacity is creating new advantages and disadvantages between development locations, while domestic and regional investors are becoming more influential in determining where capital moves across CEE.
These developments are taking place at different speeds and for different reasons, but they point in the same direction. Europe’s economic requirements are changing faster than much of its existing real estate.
That may be the most important conclusion from CIJ.World’s H1 and Q2 2026 country reporting. Europe does not simply need more property. It needs to adapt a vast existing stock while delivering the offices, industrial facilities, homes, logistics buildings and powered development sites that its economy increasingly requires.
Source: © CIJ.World Analysis Team
