German Real Estate Lenders Remain Cautious in Q1 Despite Stable Lending Activity

Sentiment among commercial real estate lenders in Germany remained subdued in the first quarter of 2026, even as some underlying indicators showed modest improvement, according to the latest BF.Quartalsbarometer compiled with the Handelsblatt Research Institute.

The index, which tracks financing conditions and lender activity, registered a negative reading of -9.74 points, indicating continued caution in the market. While a majority of respondents reported stable conditions over the past three months, more participants observed a deterioration than an improvement, suggesting that overall confidence remains limited.

The survey, conducted in mid-March, captured early reactions to geopolitical tensions, including the conflict involving Iran. Market participants noted that uncertainty around the broader economic environment continues to weigh on financing decisions, particularly given the risk of renewed volatility in interest rates.

Lending activity itself showed mixed signals. Most respondents indicated that new business volumes had remained unchanged compared to the previous quarter, while just over a quarter reported an increase. At the same time, competition among lenders appears to be gradually strengthening, with some participants noting increased pressure in the market.

Demand for alternative sources of financing has also grown. More than 40 percent of respondents observed higher interest in non-bank funding options, with private equity structures, including joint venture capital, among the most frequently cited.

In contrast, the share of non-performing loans showed signs of stabilisation or improvement. Around one-third of respondents reported a decline in problematic loans, while fewer noted an increase. This suggests some easing in credit quality concerns, although the overall level remains a point of attention for lenders.

Pricing continues to vary significantly depending on asset type and risk profile. For existing properties, average lending margins were reported at 169 basis points, with lower pricing typically associated with residential assets and higher levels seen in the office segment. Loan-to-value ratios averaged just over 63 percent.

Financing for development projects remains more expensive, reflecting higher risk. Average margins in this segment reached 262 basis points, with a wide range depending on the type of project. Residential developments carried the highest average pricing, while logistics projects were generally financed at lower margins. Loan-to-cost ratios stood at just over 71 percent.

The BF.Quartalsbarometer is based on a quarterly survey of lending professionals responsible for real estate financing decisions across a range of institutions. It provides an overview of market sentiment, lending conditions and competitive dynamics within Germany’s property finance sector.

Overall, the latest results point to a market that remains cautious but functional, with stable lending activity and some signs of improving credit quality, set against a backdrop of ongoing economic and geopolitical uncertainty.

Prague New-Build Prices Rise as Sales Decline in Early 2026

Prices of new apartments in Prague increased by 8% year-on-year in the first quarter of 2026, reaching CZK 176,440 per sqm, according to data from BuiltMind. On a quarterly basis, prices also recorded a modest increase.

Despite the price growth, sales activity weakened. Developers sold 1,518 new apartments during the quarter, down more than 28% compared to the same period last year, when 2,118 units were transacted.

The supply of new homes remained limited, with fewer than 6,000 units available on the market, broadly in line with early 2025 levels. Although the number of available apartments increased during last year, the analysis indicates that new supply continues to be absorbed relatively quickly.

Market dynamics are influenced by a combination of slow permitting processes, construction constraints and developers’ strategies of releasing units in phases. These factors continue to shape both supply levels and pricing trends.

Compared to other Central European capitals, Prague’s residential market shows lower levels of activity. While sales volumes exceeded 4,300 units in Warsaw during the same period, Prague recorded significantly fewer transactions. The difference in supply is also notable, with Warsaw offering around 14,000 new apartments compared to fewer than 6,000 in Prague.

Within the city, the highest number of transactions was recorded in Prague 9, followed by Prague 4, Prague 5 and Prague 10. Together, these districts accounted for more than 80% of total sales.

Among developers, Central Group recorded the highest sales volumes, followed by Finep and CPI Property Group. The most active projects included Tesla Hloubětín and Kolben Park.

Although transaction volumes declined at the start of the year, demand for housing remains relatively resilient. Market expectations suggest that quarterly sales could stabilise at around 1,500 units, supported by underlying demand despite ongoing economic and geopolitical uncertainty.

Source: CTK

Slovak Economy Shows Mixed Turnover Trends as Industry Declines Continue

Turnover across selected sectors in Slovakia showed a mixed performance in February 2026, with most sectors recording growth, while industry continued to decline, according to data from the Statistical Office of the Slovak Republic.

The industrial sector, a key component of the economy, recorded a year-on-year decrease in turnover of 5.3% in real terms, marking the second consecutive monthly decline. Out of 16 monitored industrial segments, nine reported lower turnover. The overall result was mainly affected by reduced activity in the manufacture of transport equipment, basic metals and wood products. These declines were partly offset by higher turnover in machinery and equipment production, electronics manufacturing, and energy supply.

In contrast, other sectors reported positive developments. The strongest growth was recorded in information and communication, where turnover increased by 15.5% year-on-year, the highest rate in over a year. More moderate increases were seen in selected market services, which rose by 2.6%, and construction, up 3.5%. Turnover in transport and storage remained largely unchanged, with a marginal increase of 0.1%.

On a month-on-month basis, seasonally adjusted data showed a more balanced picture. Turnover increased in industry, information and communication, and selected services, while construction and transport recorded declines compared to January.

The latest figures indicate that while parts of the Slovak economy continue to expand, the industrial sector remains under pressure, with ongoing weakness in key manufacturing segments weighing on overall performance.

Czech Inflation Edges Higher in March as Fuel Prices Surge

Consumer prices in Czechia increased by 0.6% month-on-month in March 2026, driven mainly by higher transport costs, according to data from the Czech Statistical Office.

On an annual basis, inflation reached 1.9%, up from 1.4% in February, marking a moderate acceleration. The increase was largely linked to fuel prices, which shifted from a year-on-year decline in February to a sharp rise in March. Diesel and petrol prices reached their highest levels in recent months, contributing significantly to overall inflation.

Transport costs were the main upward driver, with fuel and lubricants for personal transport rising notably. Prices for vehicles also increased slightly. Housing-related costs, including rents and maintenance, continued to grow, while prices in restaurants and accommodation services also edged higher.

At the same time, some categories provided downward pressure on inflation. Food prices declined overall, with notable reductions in vegetables, sugar, dairy products and meat. Clothing and footwear also remained cheaper compared to the previous year.

In year-on-year terms, transport recorded the strongest price increase, followed by hospitality services and selected housing-related costs. In contrast, energy prices showed mixed trends, with electricity and gas prices lower than a year earlier.

Service prices continued to rise faster than goods, reflecting ongoing cost pressures in labour-intensive sectors. Overall, prices of goods increased only marginally, while services recorded a more pronounced rise.

The twelve-month average inflation rate remained stable at 2.2% in March.

According to the harmonised index of consumer prices, inflation in Czechia stood at 1.5% year-on-year. Across the European Union, inflation averaged around 2.1% in February, with significant differences between countries.

The latest data indicates that while overall inflation remains relatively moderate, energy-related costs, particularly fuel prices, are again becoming a key factor shaping short-term price developments.

Slovakia’s Construction Sector Gains Pace as Domestic Projects Drive Growth

fletcher@cijeurope.com
14 April 2026
CIJ - Spotlight, Construction, Indicators

Construction activity in Slovakia strengthened in February, with output rising at its fastest pace in months, supported primarily by a surge in domestic building activity.

Data published by the Statistical Office of the Slovak Republic shows that total construction output reached close to €570 million during the month, marking an annual increase of 8.2 percent in real terms. On a month-on-month basis, production also expanded by 5.4 percent, indicating improving momentum at the start of the year.

The performance was largely underpinned by domestic activity, which grew by nearly 10 percent compared to February 2025. Within this, new construction played a central role, recording a double-digit increase of more than 11 percent. Repair and maintenance work also contributed, though growth in this segment remained modest.

From a structural perspective, both key segments of the sector recorded gains. Building construction rose by just over 10 percent year-on-year, while civil engineering activity increased by more than 7 percent. Infrastructure-related projects, including road, motorway and rail development, were among the main drivers behind the expansion in engineering works.

In contrast, construction activity outside Slovakia softened slightly. Output generated abroad declined by 1.6 percent year-on-year, continuing a shift seen since the start of 2026. As a result, the share of foreign construction work in total sector output fell to just over 10 percent, down from an average of around 13 percent last year.

The first two months of 2026 confirm a more moderate but still positive trend. Total construction output exceeded €1 billion over the period, representing annual growth of 3.5 percent. Domestic new construction remained the key contributor, offsetting a slight decline in repair and maintenance activity.

Civil engineering has been the strongest-performing segment so far this year, with output rising by close to 11 percent in the January–February period. Building construction, which represents the largest share of the sector, recorded more limited growth of just under 4 percent.

Despite the positive domestic outlook, weaker performance abroad continues to weigh on overall figures. Construction output outside Slovakia fell by around 10 percent in the first two months of the year, reflecting a cooling after strong growth seen through much of 2025.

The February data suggests that Slovakia’s construction sector is entering 2026 with renewed domestic momentum, although the sustainability of growth will depend on continued investment in new projects and the broader economic environment.

Poland: Inflation Pressures Rebuild Amid Geopolitical Uncertainty

The Future Inflation Index (WPI), which forecasts the direction of changes in consumer goods and services prices several months in advance, rose by 0.6 points in April 2026 compared to the previous month, marking the second consecutive month of reversing the earlier downward trend in inflation.

The main driver of this shift is the conflict in the Middle East and the resulting volatility in the region. Market participants have become highly sensitive to developments related to the conflict. Even if the situation stabilises, its effects are likely to persist for some time across many economies worldwide, including Poland.

The increase in commodity prices on global markets has had the most significant impact on the higher WPI reading. The IMF’s commodity price index has risen sharply in recent months, driven primarily by increases in oil and gas prices. Other commodities have also recorded gains, including fertilisers (up 26% year-on-year) and copper (by nearly 30%). The longer the conflict continues, the greater its impact is likely to be on prices across a broader range of commodities. This reflects not only rising raw material costs but also increasing expenses related to transport and processing.

In March, consumer inflation expectations rose noticeably. In particular, there was an increase in the number of people expecting prices to rise faster than previously observed. In February 2026, around 16% of respondents anticipated an acceleration in price growth, while in March this figure increased to 26%. A similar trend is likely to be reflected in the April survey.

Inflation expectations among manufacturing companies have also strengthened. The gap between firms planning price increases and those expecting to reduce prices has widened to more than 12 percentage points, compared with around 8 percentage points a month earlier. The strongest intentions to raise prices are seen in the oil refining and metal processing sectors. The clothing sector remains the only one expecting a slight decline in prices.

At the same time, increased geopolitical uncertainty has contributed to higher government bond yields. This may translate into rising financing costs across the market, including higher borrowing costs for both households and businesses.

City Point Okęcie Receives BREEAM Outstanding Certification

City Point Okęcie in Warsaw has been awarded a BREEAM Outstanding certification, achieving a score of 92.3%, placing it among the highest-rated industrial buildings in Poland.

The project forms part of a logistics portfolio held by a joint venture between Partners Group and Peakside Capital Advisors. The wider portfolio also includes City Point Targówek, Logistics Point Raszyn and Logistics Point Piaseczno, which together represent a network of urban logistics assets in the Warsaw area.

Located near Warsaw Chopin Airport, City Point Okęcie comprises more than 11,000 sqm of warehouse and office space and is fully leased to Welcome Airport Services.

The certification reflects the building’s environmental performance and technical specifications. The scheme includes heat pumps for heating and cooling, supported in part by an on-site photovoltaic installation. Energy use is managed through automated systems, while water consumption is reduced through recycling solutions and efficient sanitary fittings.

The building also incorporates materials aimed at lowering its environmental impact, including façade elements produced with reduced-emission steel. Indoor conditions are supported by the use of low-emission materials.

Design features include measures intended to address heat build-up, such as reflective roofing and landscaped elements. The project also provides facilities for employees, including outdoor areas and infrastructure supporting alternative forms of transport.

City Point Okęcie was developed with Depenbrock Polska as general contractor, alongside a team of design, advisory and engineering consultants. Financing for the project was provided by mBank.

The certification highlights the continued focus on environmental standards within new logistics developments, particularly in urban locations where operational efficiency and regulatory requirements are becoming increasingly relevant.

SCF Investment Group Appoints Jan Šimandl to Strengthen Leasing Operations

SCF Investment Group has appointed Jan Šimandl as Senior Leasing Team Leader, reinforcing its commercial real estate capabilities as the company continues to expand its presence across Central and Eastern Europe.

Based in Prague, Šimandl assumed the role in March 2026 and is responsible for leasing activities across SCF’s commercial property portfolio. His appointment reflects the group’s focus on enhancing asset management and supporting growth in both the retail and office segments.

Šimandl brings close to a decade of experience in leasing and property management. He previously worked at CPI Property Group, where he held the position of Letting Manager. In that role, he oversaw leasing strategies for shopping centres, led contract negotiations and coordinated commercial, technical and legal aspects of leasing transactions, while maintaining relationships with tenants and partners.

Earlier in his career, he gained experience at CBRE, focusing on advisory and leasing activities.

He is a graduate of Charles University and speaks English and Italian in addition to his native Czech.

The appointment supports SCF’s broader strategy of strengthening its internal expertise as competition intensifies across the region’s commercial real estate market.

CPI Europe Exits Italian Retail Park Segment with Sale of Two Assets

CPI Europe AG has completed the sale of two retail parks in Italy, marking its exit from the country’s retail park segment as part of a broader portfolio repositioning strategy.

The divested assets include STOP SHOP San Fior and STOP SHOP Terminal Nord Udine, which together offer nearly 60,000 sqm of gross leasable area. STOP SHOP San Fior was developed in phases between 2017 and 2019 as a convenience-led scheme, while STOP SHOP Terminal Nord Udine, originally opened in 2008, was added to the company’s portfolio in 2022 and ranks among the larger properties within its STOP SHOP platform.

According to the company, the disposal was completed under favourable market conditions and reflects ongoing efforts to actively manage its portfolio. Proceeds from the transaction are expected to be used primarily to reduce debt and support investment in core markets.

CPI Europe indicated that future capital allocation will focus on expanding its retail park presence in Central and Eastern Europe. The company currently has four projects under development in Croatia, with additional schemes planned across Serbia, Hungary and Croatia in the coming years.

The transaction forms part of a wider strategy aimed at lowering leverage while redirecting capital towards markets and assets with stronger growth potential, alongside continued efforts to upgrade and improve the sustainability profile of its portfolio.

Poland’s Court Dispute Signals Deeper Institutional Strains

The latest tensions surrounding Poland’s Constitutional Tribunal point to a longer-running challenge within the country’s legal framework, where disputes over judicial appointments continue to intersect with political change.

Recent efforts by parliament to fill positions on the court have been accompanied by questions over procedure and timing. Legal observers and political opponents have raised concerns about how vacancies were addressed and whether established steps were fully respected. The situation has also drawn attention to the role of the President of Poland, whose involvement is required before judges can formally take up their roles, adding another layer of uncertainty to the process.

The roots of the issue trace back to 2015, when the outgoing Civic Platform-PSL government moved to appoint several judges shortly before losing power. The incoming Law and Justice administration challenged those decisions and advanced its own nominations, setting off a dispute that would reshape the court’s position within the state. Subsequent rulings confirmed that some of the earlier appointments were valid while others were not, leaving a contested institutional legacy that has carried through to the present.

European institutions have since examined the situation more closely. The Court of Justice of the European Union has highlighted concerns about how judicial appointments were handled, indicating that certain irregularities could affect the court’s independence. Similarly, the Venice Commission has pointed to risks for democratic safeguards when disputes over constitutional bodies remain unresolved. In addition, the European Court of Human Rights has addressed individual cases in which the composition of judicial panels raised questions about whether they met the required legal standards.

Following the 2023 elections, the current governing coalition has taken a critical view of the Tribunal’s present structure. This has included decisions not to recognise certain rulings, reflecting a continuation of institutional friction seen in earlier years. While the court has continued to function, its standing within the legal system remains a matter of debate among policymakers and legal experts.

Research into the evolution of the dispute suggests that what began as a disagreement over appointments has developed into a broader issue concerning the balance of power between institutions. The ongoing uncertainty highlights how changes in political leadership can have lasting effects on bodies intended to remain independent.

The consequences extend into the economic sphere. For investors, confidence in the legal environment plays a central role in decision-making, particularly in markets that rely on long-term planning and regulatory stability. Questions over how consistently laws are interpreted and applied can influence perceptions of risk and, in turn, investment activity.

As the situation continues to evolve, the challenge for Poland lies in reinforcing the credibility of its institutions. Restoring clarity around the functioning of the Constitutional Tribunal will be an important step in strengthening both legal certainty and broader confidence in the country’s governance framework.

Source: WEI

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