Poland’s regional economies in 2025 reveal striking contrasts

Poland’s regional economies in 2025 reveal striking contrasts, with some areas enjoying strong growth and others facing demographic and structural challenges.

The Mazowieckie region, anchored by the capital Warsaw, continues to be the most populous and economically advanced, although its pace of growth has moderated compared with the surging metropolitan centers of Kraków and Wrocław. In contrast, eastern regions such as Podlaskie and Lubelskie remain affected by depopulation and aging demographics, raising concerns over future labor availability and the sustainability of public services.

Economic performance also reflects these divides. Mazowieckie leads in GDP per capita, driven by financial services and a thriving technology sector. Wielkopolskie and Śląskie record solid industrial and manufacturing activity, though heavy industry in Śląskie faces pressure from the ongoing energy transition. Meanwhile, the eastern and northern regions lag, with agriculture continuing to dominate in Lubelskie, Podkarpackie, and Warmia-Masuria.

Housing and construction activity is concentrated in metropolitan hubs. Warsaw, Kraków, and Wrocław report robust levels of residential development, supported by favorable financing conditions and strong mortgage demand. Smaller cities in the east, however, continue to struggle with underinvestment, though EU regional funds are being channeled into urban renewal and infrastructure improvements aimed at narrowing the gap.

Agriculture remains a pillar in several regions, with Lubelskie and Podkarpackie leading in crop production and Podlaskie maintaining its strength in dairy and livestock. Industrial activity clusters in Śląskie, where steel and automotive remain significant, as well as in Wielkopolskie, with its focus on machinery and food processing, and Dolnośląskie, which is expanding electronics production and logistics.

The services economy continues to expand nationwide, with information technology and business services growing particularly quickly in Warsaw, Kraków, and Gdańsk. Yet disparities remain visible, as rural and peripheral regions still rely heavily on agriculture and lower-wage industries. Analysts suggest that ongoing investment in infrastructure, together with support from EU funds, will remain essential in bridging these gaps.

The Regions of Poland 2025 report ultimately highlights a country experiencing a dual reality: vibrant growth in metropolitan hubs on the one hand, and persistent stagnation in parts of the east and northeast on the other. Policymakers are confronted with the challenge of fostering competitiveness in Poland’s most dynamic cities while at the same time ensuring balanced development and social cohesion across all regions.

Source: Statistics Poland

Czech producer prices show mixed trends in July

Producer price developments in July highlighted contrasting trends across sectors. Agricultural producer prices, despite slowing, remained significantly higher year-on-year, while industrial producer prices continued to decline. Construction and service producer prices showed moderate growth compared with 2024.

Agricultural producer prices fell by 1.9% month-on-month but were still 11.2% higher than in July 2024. Crop production recorded an overall increase of 5.6%, with sharp rises in fruit (+21.5%), oilseeds (+12.0%), and cereals (+9.1%). By contrast, potato prices dropped by 22.7% and fresh vegetables by 8.3%. Animal production posted stronger growth of 17.8%, led by eggs (+42.5%), cattle for slaughter (+35.8%), milk (+19.6%), and poultry (+10.2%). Prices of pigs for slaughter decreased by 5.7%.

Industrial producer prices edged up by 0.1% compared with June but declined by 1.2% year-on-year. Energy-related products weighed on the index, with electricity, gas, steam, and air conditioning down by 4%, alongside decreases in coke, refined petroleum products, coal, and chemicals. Food production provided some support, with prices rising by 4%, particularly in dairy products (+11.0%) and preserved meat (+5.0%). Across main industrial groupings, energy prices dropped 5.4% year-on-year, while durable consumer goods rose 2.7% and non-durable goods 2.5%.

Construction work prices increased by 0.3% from June and by 2.6% year-on-year. Prices of materials and products used in construction dipped slightly month-on-month but remained 0.9% higher than a year earlier.

Service producer prices in the business sector declined by 1.4% month-on-month, driven mainly by lower costs in advertising (-17.9%), broadcasting (-17.3%), and film and media production (-5.3%). Growth was recorded in management consulting (+1.7%) and real estate services (+0.4%). Compared with last year, service producer prices were 4.1% higher, supported by broadcasting (+21.4%), advertising (+15.5%), and security services (+12.6%).

Commenting on the results, Jiří Šulc, head of Agricultural, Construction, and Services Prices Statistics at the Czech Statistical Office, noted: “In year-on-year comparison, prices of agricultural producers increased by more than 11%. Construction work prices were higher by 2.6% and service producer prices in the business sphere by 4.1%. On the other hand, prices of industrial producers decreased by more than 1% year-on-year.”

Across the EU, Eurostat reported that industrial producer prices rose by 0.7% month-on-month in June, reversing declines from May. The highest increases were recorded in Spain, Italy, and Portugal, while Czechia and Austria registered a 0.2% decline. Year-on-year, EU industrial producer prices were up 0.6%, though declines persisted in several countries, including Germany (-1.1%), Poland (-1.0%), Slovakia (-0.9%), and Czechia (-0.7%).

Source: CSO

Czech labour market sees moderate employment growth, rising unemployment

Employment in the Czech Republic grew modestly in the second quarter of 2025, while unemployment also edged higher, according to data from the Labour Force Sample Survey published by the Czech Statistical Office (CZSO).

The number of employed persons increased by 76,200 year-on-year, reaching 5.24 million, a rise of 1.5%. This growth was driven mainly by women, with female employment up by 122,600 compared with a decline of 46,500 among men. The most notable increases were recorded in the 60+ age group, which rose by 9.4%, and in the youngest category of 15–24 years, which grew by 4.2%. By contrast, the 30–44 age group saw a decline of 1.1%.

Employment gains were concentrated in the service sector, which expanded by 88,000 year-on-year to more than 3.28 million. The strongest growth occurred in arts, entertainment and recreation (+24.3%), other services (+11.3%), and information and communication (+9.1%). Manufacturing and construction recorded slight declines, while employment in agriculture also contracted. Over the past five years, services have added nearly 285,000 jobs, particularly in public administration, defence, and education.

The number of employees increased by 75,900 to 4.43 million, while the self-employed remained largely unchanged at around 805,000. Men still accounted for two-thirds of the self-employed, mainly in construction, trade, and manufacturing, while women were more active in professional and service-related activities.

The employment rate for those aged 15–64 rose to 75.7%, up 0.4 percentage points year-on-year. However, the male employment rate fell by 0.9 points to 80.1%, while the female rate increased by 1.9 points to 71.2%. Part-time work also expanded, reaching 500,000 workers, or 5.1% more than a year earlier, with women accounting for over 70% of these jobs.

Unemployment also grew. The number of jobless persons rose by 12,000 year-on-year to 146,100, while the seasonally adjusted average increased by 13,500 compared with the first quarter. The general unemployment rate in the 15–64 age group reached 2.8%, up 0.2 points year-on-year. Women accounted for the largest share of the increase, particularly in the 30–44 age group, while unemployment among men was most common in the 45–59 age range.

Long-term unemployment also edged higher, rising to 44,800, an increase of 4,900 from last year. The most significant increase was recorded among people aged 60 and above. Regionally, the highest unemployment was reported in Ústecký (4.8%) and Moravskoslezský (4.6%), while the lowest was in Prague and Central Bohemia (both 1.5%).

Economic inactivity fell year-on-year by 42,900 to 3.46 million. This decline was driven by women, whose inactivity rate dropped significantly, while the number of economically inactive men rose by nearly 50,000. The survey also found that around 83,000 people were not actively seeking work but expressed a willingness to take a job, though only a small portion would be able to start immediately.

The CZSO noted that demographic changes, shifting labour market participation among older workers and women, and continued structural transformations in the economy are shaping employment trends. Despite modest employment growth, pressures from rising unemployment and regional disparities remain evident.

Source: CZSO

Czech government considers widening scope of housing support law

The Czech government is set to deliberate on expanding eligibility under the Housing Support Act. Currently, households earning up to 1.43 times the subsistence or “minimum living standard” qualify for assistance. A proposal now under review aims to raise that threshold to 1.6 times to extend support to working families, pensioners, and people with disabilities.

According to government documents, the proposed adjustment would bring relief to vulnerable groups—such as single working mothers in lodging houses, retirees receiving pensions just above CZK 10,000, and individuals receiving third-degree disability pensions—who are currently excluded by the tighter limit . Experts associated with the “For Housing” initiative argue the current coefficient excludes up to one-third of those in housing distress, a scenario the adjustment seeks to mitigate.

However, the timing of the debate presents challenges. With early October parliamentary elections approaching and no sessions scheduled over the summer—and with the chamber undergoing renovations—debate before then is unlikely. Discussions may resume in September if parliament convenes.

For those concerned about affordability in a broader policy context, the OECD has previously noted that households with “residual incomes” below 1.6 times the subsistence threshold are particularly vulnerable to housing cost burdens, signaling that this proposed limit aligns with international definitions of housing need.

Real estate regains investor interest amid lower rates and strong developer valuations

The Polish real estate sector is drawing renewed investor attention, supported by record developer stock valuations, falling interest rates, and growing demand for mortgage loans. Analysts note that while optimism is returning to the market, investors are also increasingly considering opportunities outside major cities, with regional and holiday destinations gaining prominence.

At the end of July, the WIG Real Estate Index reached 5,666 points, its highest level since November 2007. The milestone reflects investor confidence in the sector’s growth potential and the profitability of residential developers.

“We are seeing a classic example of the inverse correlation between interest rates and the housing market. The July interest rate cut of 25 basis points to 5% was the catalyst for the current growth. Each 0.5 percentage point reduction increases the creditworthiness of Poles by about 5%, which directly translates into demand. Although today, it must be emphasized, cash buyers are the most important players on the market,” said Radosław Jodko, investment expert at RRJ Group.

Shares of major developers have also risen. Dom Development reached PLN 240 per share, Murapol remained at PLN 40, and Atal traded at PLN 55. mBank’s brokerage unit recently raised its recommendations for the four largest developers, forecasting growth of 11–15% over the next year. With WIBOR falling below 5% for the first time in three years, real estate investments are increasingly seen as more attractive than bank deposits.

“With interest rates falling, real estate is becoming an even more attractive form of capital investment. The market expects further rate cuts amid falling inflation, which makes investing in an apartment for rent, for example, much more profitable than keeping money in a deposit account,” Jodko added.

New investment directions are also emerging. “What is clearly visible today and worth taking into account is that more and more investors are paying attention to holiday locations, but not only those popular so far, such as the seaside or the mountains. Masuria is attracting more and more attention, where the market for holiday properties and investment apartments is just developing,” said Jodko.

He added that Masuria currently seems to be one of the most promising investment destinations in Poland: “With a well-planned investment, the return on rent can reach up to 8–10% per annum, which is very attractive given the current interest rates.”

Despite strong momentum, experts caution about longer-term demographic trends. Analysts at Alior Bank estimate that demand for housing in cities may start to plateau by 2028. Jodko noted, however, that other factors could sustain demand: “Demographics are a major economic challenge across Europe. But broader trends are influencing the real estate market, such as migration, with people increasingly looking for less populated areas, away from the heat so characteristic of the Mediterranean basin. And, of course, we are currently seeing rapid growth in the institutional rental market, which may mean that demand will remain high for longer than demographic data alone would suggest.”

Looking ahead, Jodko believes both traditional urban apartments and resort properties offer opportunities: “For long-term investors, I recommend apartments in large cities with good locations and access to public transport. For those looking for higher returns and willing to make a greater commitment, holiday apartments in Masuria or in the mountains may be an interesting alternative. However, it is crucial to conduct a thorough analysis of the location and rental potential.”

Generali Deutschland to relocate headquarters to Munich’s Werksviertel district

Generali Deutschland has acquired the Momenturm project in Munich’s Werksviertel district from Art-Invest Real Estate and will establish its new corporate headquarters there. The transaction was executed by Generali Real Estate S.p.A. on behalf of Generali Deutschland, which will continue to develop the property into a modern, energy-efficient office complex.

The new headquarters will consolidate Generali’s operations in Munich and Augsburg, bringing together approximately 1,500 employees under one roof by the end of 2028. The Momenturm project involves redeveloping the existing office building at Rosenheimer Straße 139, which Art-Invest purchased in 2019. The current 11,000 square metres of rental space will be expanded to around 28,000 square metres. In addition to accommodating Generali’s headquarters, the building will also provide office space for other tenants.

Standing 60 metres high, the building has been designed by Munich-based OSA Ochs Schmidhuber Architekten. From the fifth floor upwards, tenants will have unobstructed views of both the city skyline and the Alps.

Generali Real Estate highlighted the acquisition as a strategic addition to its German portfolio. “The office space will provide innovative working environments while meeting high sustainability standards,” said Lukas Jeckel, Head of Region Central Northern Europe at Generali Real Estate.

Art-Invest Real Estate emphasised that the project reflects its vision of future-oriented office buildings. “Momenturm was conceived as more than just a workplace. We are pleased that Generali Deutschland has chosen it as its new headquarters,” said Tobias Wilhelm, Managing Director of Art-Invest Real Estate in Munich.

The purchase price was not disclosed. Art-Invest Real Estate was advised by GSK Stockmann, while Poellath acted as legal advisor to Generali Deutschland.

Czech industrial market slows despite strong development pipeline

The Czech industrial real estate market showed slower demand in the second quarter of 2025, with both gross and net take-up falling well below long-term averages. According to Colliers’ quarterly survey, gross demand reached 304,900 m², 34% below the five-year average, while net demand (excluding renegotiations) stood at 169,600 m², 40% below the same benchmark.

Despite weaker leasing activity, the market continued to grow, with 131,600 m² of new space delivered in the quarter. Although this represents a 32% increase year-on-year, it remains 30% under the five-year average. Since January, total stock has expanded by 344,700 m², bringing the market to 12.7 million m², equivalent to 5% year-on-year growth.

While completions were modest, construction activity is at a record level. Around 1.7 million m² is currently being built across 171 logistics parks, more than half of which is scheduled for delivery this year. Colliers notes, however, that some projects could be delayed into 2026 if demand continues to soften.

Prague and the Central Bohemian Region account for 26% of current construction, followed by Moravian-Silesian with 19% and Karlovy Vary with 18%. The latter is largely driven by a 200,000 m² automated warehouse project in Cheb, the largest of its kind in the country.

The vacancy rate increased to 4% in Q2, equivalent to 511,000 m², up 1.3 percentage points year-on-year. When including vacant space in ongoing developments, available capacity is nearly double. More than half of all space under construction—approximately 958,300 m²—remains without tenants, with many projects tailored to end-user requirements.

Tenant activity in H1 2025 was shaped by a major renegotiation in the logistics sector, which accounted for 62% of gross demand. Manufacturing represented 23%, distribution 6%, and other sectors the remaining 9%.

Prime rents remained stable at €7.00–7.50 per m² per month, the highest in Central and Eastern Europe. However, landlords are increasingly under pressure as tenant bargaining power grows, particularly in regions such as Plzeň and Moravia-Silesia, where rents are beginning to adjust downward.

Colliers points to structural issues constraining the Czech market. Lengthy permitting processes, higher labour costs, and administrative barriers are limiting competitiveness compared with neighbouring countries. These conditions are prompting some investors, particularly from the Asia-Pacific region, to redirect expansion toward markets such as Poland, Hungary, and Serbia, where incentives and operating conditions are more favourable.

“While the Czech economy is expanding, the industrial property sector is in a phase of recalibration. Demand has slowed, but the impact on rents remains limited. The development pipeline is strong, though future growth will depend on how structural challenges are addressed,” said Josef Stanko, Director of Market Research at Colliers.

Source: Colliers Czech Republic

Newgate Investment acquires Fabryka Park Katowice

TDJ Estate, advised by Colliers, has completed the sale of Fabryka Park Katowice to Newgate Investment (NGI). The transaction was also supported by REALM, BatiPlus, and the law firm KNP.

Fabryka Park Katowice is a retail park with 8,900 square metres of leasable space, located on Armii Krajowej Street in the southern part of the city. Opened in December 2023, the property was fully leased from the outset and is anchored by tenants from convenience, electronics, interior design, and drugstore categories. Brands present include Jysk, Woolworth, Rossmann, Media Expert, Action, TEDi, and T-Mobile. The centre also provides around 260 parking spaces for customers.

The site has potential for expansion, with land available for an additional 19,400 square metres of leasable area. Its location on national road No. 81, close to both bus and train stations, offers strong transport links. The catchment area includes more than 150,000 residents within a 15-minute drive, with the broader Upper Silesia region providing access to a population of over 2 million.

Representatives from both sides of the transaction noted the property’s strong performance and potential for growth. TDJ Estate highlighted the successful commercialisation of the project, while Newgate Investment emphasised the retail park’s tenant mix and expansion opportunities, as well as the strategic importance of the Silesian region.

According to Colliers, the deal reflects continued investor interest in retail assets in Poland. “The retail property market remains one of the most attractive in Central and Eastern Europe. Fabryka Park Katowice is a modern, fully leased retail park with strong tenants and clear growth potential, fitting well into NGI’s expanding portfolio,” said Marek Paczuski, Senior Director in Colliers’ Investment Advisory Department.

Revetas appointed to oversee $4 billion US real estate portfolio repositioning

Revetas Group, a global real estate firm specializing in special situations, has been appointed to manage the repositioning of a $4.0 billion US property portfolio owned by a German investment manager representing several German pension funds and institutional investors.

The mandate follows a strategic review and aims to adapt the portfolio to current market conditions. Revetas will assume management of the US-based management company overseeing the assets, bringing governance, restructuring, and capital markets expertise to the process.

The portfolio comprises life sciences, multifamily housing, student accommodation, partially completed developments, and offices across several major US cities. Revetas’ role includes evaluating individual strategies for each property, ranging from repositioning and refinancing to selective sales and capital restructuring, while ensuring continuity for tenants, lenders, and partners.

“Revetas has been mandated as an independent fiduciary to maximize value for all investors in the portfolio,” said Eric Assimakopoulos, Founding Partner of Revetas Group. “By combining investors’ platform knowledge with Revetas’ operational toolkit, we can identify the most suitable solutions for each asset.”

To support the process, Revetas has partnered with Marty Burger, Founder and CEO of Infinite Global Real Estate Partners and former CEO of Silverstein Properties. Burger will work alongside Revetas in leading the turnaround program.

Burger commented that the current environment, shaped by post-pandemic repricing, presents opportunities for institutions to address legacy challenges while repositioning portfolios for long-term growth.

Revetas, founded in 2002, has managed more than $6 billion in real estate investments across Europe and the US, with a focus on value-add, distressed, and special situation strategies. Recent mandates include €600 million in institutional capital from South Korea for investments in the US and Europe.

Polish warehouse market shows signs of stabilisation in H1 2025

Poland’s industrial and logistics real estate sector maintained steady growth in the first half of 2025, with total stock increasing by 7% year-on-year to 36.03 million square metres. Despite this expansion, developer activity slowed, with new completions falling by 30% year-on-year to 1.15 million square metres, and new construction starts declining by 26% to 1.47 million square metres.

Leasing activity reflected a changing market dynamic. Gross take-up reached 2.95 million square metres, up 10% year-on-year, but the growth was largely driven by renegotiations rather than new leases. Net take-up, covering new leases and expansions only, dropped by 17% to 1.34 million square metres. Analysts note that many companies have opted to renew contracts signed during the 2020–2021 demand peak rather than pursue relocation or expansion in the current economic climate.

The highest leasing activity was recorded in Mazowieckie, Śląskie, and Dolnośląskie voivodships, with Wrocław standing out for strong demand from e-commerce occupiers. Vacancy rates remained stable at 8.2% nationwide, with regional disparities: Lubuskie and Świętokrzyskie reported double-digit vacancy rates, while core markets such as Dolnośląskie, Mazowieckie, and Łódzkie accounted for the largest volumes of available space.

Investment activity strengthened, with transaction volumes in the warehouse segment reaching €694 million, a 135% increase year-on-year. The sector accounted for 40% of total commercial real estate investment, supported by a growing number of sale-and-leaseback transactions. The largest deal in the first half involved Realty Income’s €253.5 million acquisition of two facilities from window manufacturer Eko-Okna.

Rental rates remained broadly stable, with big-box facilities ranging from €3.6 to €6.5 per square metre per month. Prime locations such as Warsaw and Kraków continued to command higher rates, often above €6.0. Incentives such as rent-free periods and fit-out contributions were common, particularly for larger tenants, while service charges rose in response to higher energy and labour costs.

AXI IMMO’s latest report highlights that the Polish warehouse sector is entering a phase of selection and stabilisation. Analysts point to a maturing market characterised by a higher share of renegotiations, a preference for pre-let and build-to-suit projects over speculative development, and a growing emphasis on ESG criteria in leasing decisions. Despite macroeconomic uncertainties, Poland remains one of Europe’s most active logistics markets, supported by strong fundamentals and continuing investor demand.

Source: AXI IMMO

« Previous 1 … 124 125 126 127 128 … 381 Next »

Latest news

All posts by fletcher@cijeurope.com.