Real Estate Experts Expect Property Sector to Adapt to Higher Interest Rate Environment

Industry representatives and real estate specialists expect the property sector to continue adapting to a prolonged period of higher financing costs following the European Central Bank’s latest interest rate increase.

According to Prof. Dr. Steffen Sebastian of the IREBS Institute for Real Estate at the University of Regensburg, the real estate industry has already adjusted to higher borrowing costs, with recent ECB decisions largely reflected in capital markets. He noted that increasing defence spending, investment requirements and rising public debt could keep long-term interest rates elevated, requiring the sector to permanently adapt business models and financial assumptions.

Francesco Fedele, CEO of BF.direkt AG, said higher interest rates are likely to change financing structures and investment strategies rather than halt market activity. He suggested that development models involving deferred land payments and option agreements, which were common before the low-interest-rate period, could become more prevalent again.

Ulrich Creydt, Managing Director of Ypsilon Group, said the ECB’s decision was a response to inflationary pressures driven by higher energy and commodity prices. He expects financing conditions for developers and investors to become more challenging, potentially reducing transaction activity. He also noted that higher borrowing costs may lead more households to postpone home purchases, increasing demand in the rental housing market.

Patrick Brinker, Head of Real Estate Investment Management at Hauck Aufhäuser Lampe Privatbank AG, believes higher rates will continue to weigh on investment decisions and project financing. However, he pointed to sectors such as digital infrastructure and data centres as areas where investor interest remains strong due to favourable long-term demand trends. He also noted that equity-funded investment vehicles are less exposed to rising borrowing costs.

Prof. Dr. Felix Schindler, Head of Research & Strategy at HIH Invest, said the ECB’s move had been widely anticipated by financial markets. He attributed the decision to a broader inflation trend extending beyond energy and raw materials into a wider range of goods and services. Schindler expects further rate increases during the year but believes the latest move is unlikely to have a significant direct impact on property markets because long-term capital market rates are more relevant for real estate financing and valuations.

Michael Eisenmann, Managing Director of Real Blue Kapitalverwaltungs-GmbH, also described the rate increase as expected given ongoing inflationary pressures and geopolitical uncertainties. He said institutional investors are likely to remain selective in their investment decisions while monitoring developments in the Middle East and their impact on energy prices, trade routes and inflation.

Across the sector, market participants generally agree that higher financing costs are becoming a structural feature of the market. While this may place pressure on project economics and transaction volumes, many expect the industry to adjust through revised financing models, changing investment strategies and greater focus on sectors offering resilient income and long-term growth potential.

Bonarka for Business Records 5,700 sqm of Office Leasing Activity in 2026

Bonarka for Business (B4B) in Kraków has completed four office lease transactions totaling 5,700 sqm of gross leasable area (GLA) since the beginning of 2026, according to owner Revetas Capital.

The transactions include a new lease signed by Geotab in Building E and a lease renewal by KION covering approximately 4,000 sqm in the same building. Two additional tenants also renewed their leases in Buildings F and D.

KION is a manufacturer of industrial trucks, warehouse equipment and supply chain automation solutions. The company operates its KION Business Services centre in Kraków. Geotab provides telematics and fleet management solutions and serves customers globally.

Antonio Pomes, Director and Country Head of Portfolio Management at Revetas, said the latest transactions reflect continued tenant demand at the business park, with both new occupiers and existing tenants committing to space within the scheme.

Marta Zawadzka, Head of Leasing & Asset Management at TriGranit, noted that established office projects in Kraków continue to attract occupiers seeking accessible locations and operational flexibility. She added that the recent transactions demonstrate ongoing leasing activity at Bonarka for Business among both international and domestic companies.

In the transactions, KION was represented by JLL, while Geotab was advised by Cushman & Wakefield.

Bonarka for Business is one of Kraków’s largest office complexes, comprising multiple office buildings and a range of on-site amenities for tenants.

Arcona Capital and REINO Group Establish Pan-European Real Estate Investment Platform

Arcona Capital and REINO Capital have entered into a strategic partnership to establish a pan-European real estate investment platform focused on serving institutional investors through cross-border investment opportunities.

The partnership brings together Arcona Capital, which manages more than EUR 400 million in assets across seven European markets, and REINO Group, whose portfolio in Poland exceeds EUR 600 million. The platform will initially focus on logistics investments in Germany, the Netherlands and Poland, with further expansion planned across other European markets.

Under the agreed structure, Arcona Capital will lead operations in the Netherlands and co-manage the German market through a newly established joint venture. REINO Partners will oversee activities in Poland. The partners state that the platform will rely on local market expertise in each jurisdiction to support investment and asset management activities.

According to Guy Barker, Chairman of Arcona Capital, the initiative responds to increasing investor demand for larger and geographically diversified portfolios. He noted that the partnership combines Arcona’s experience in markets including Germany and the Czech Republic with REINO’s established position in Poland.

Tina Rauh, Principal at Arcona Capital, said the platform is intended to address the requirements of institutional investors seeking diversification and access to real estate assets across multiple European markets.

For REINO Group, the partnership represents a step in the company’s international expansion strategy. Radosław Świątkowski, Co-Founder and CEO of REINO Group, stated that while the company remains committed to the Polish market, it is also seeking to expand its asset management activities internationally in response to investor demand for broader geographic exposure.

To support future investments, REINO is preparing the launch of a Luxembourg-based Reserved Alternative Investment Fund (RAIF), which is expected to serve as the primary investment vehicle for the platform. The fund will be managed by an entity jointly established by the two partners.

In addition to direct real estate investments, Arcona Capital and REINO intend to explore strategic acquisitions of asset management businesses to support the growth of the platform. The partners also indicated that the platform may collaborate with additional local market participants where appropriate.

The official launch of the investment platform is planned for September 2026.

CTPark Plzeň Kasárny Opens First Phase Following Redevelopment of Former Military Site

CTP has completed the first phase of the redevelopment of the former Zátiší barracks in Plzeň, launching operations at CTPark Plzeň Kasárny and welcoming its first tenants. The project is transforming a former military brownfield into a mixed-use business park comprising more than 50,000 sqm of space. The second phase of development is scheduled for completion during summer 2026.

Originally established as a military base in the 1930s, the Zátiší barracks site became largely unused following political changes after 1989. CTP acquired the property and began its conversion into a business park designed to accommodate manufacturing, research and development, logistics, office, showroom and service functions.

The project was designed by Studio Acht under the direction of architect Václav Hlaváček. The development is targeting BREEAM Outstanding certification and incorporates energy-efficiency measures, green roofs and rainwater management systems.

Several companies have already commenced operations at the park. Czech pharmaceutical distributor Avenier has opened a distribution centre focused on vaccine and healthcare logistics. Czech technology company MITO LIGHT has established its headquarters, warehouse, showroom and distribution facilities at the site.

German industrial electronics manufacturer KRIWAN Group has also leased space at the park. Other tenants include fitness operator Form Factory, Alps South Europe, Eletechnik and Parketcentrum. According to CTP, an additional automotive-sector tenant has also moved into the development.

Form Factory operates a fitness centre within the complex that is accessible to both employees and the public. A padel sports centre operated by Padel Powers is expected to open later this year.

The development includes landscaping designed by Dutch firm Baljon Landscape Architects. Plans call for more than 200 mature deciduous trees, extensive green areas and wildflower meadows to be incorporated throughout the site. The project also connects to a nearby cycling route.

CTPark Plzeň Kasárny consists of four interconnected sections designed to accommodate businesses of varying sizes. Available premises include warehouse, production, laboratory, showroom, retail and office spaces. CTP is also marketing smaller units aimed at small and medium-sized enterprises.

The park is located on Folmavská Street in western Plzeň, with access to public transport and the D5 motorway linking Prague and Germany. The nearby University of West Bohemia provides access to a regional workforce with technical and engineering qualifications.

Development of the site continues with the second construction phase, which will add additional space and expand the park’s capacity. Upon completion, the project is expected to deliver a mixed-use business environment on a formerly underutilised brownfield site.

Inflation Rises Further Amid Middle East Tensions

Poland’s Future Inflation Indicator (WPI), which forecasts the direction of consumer price changes several months in advance, increased by 1.8 points in June 2026 compared with the previous month. The latest reading marks the fourth consecutive monthly increase, signalling that inflationary pressures continue to build across the economy.

According to the analysis, inflation is being driven by a combination of rising global commodity prices and higher yields on long-term Polish government bonds. Although government regulation of retail fuel prices has partially softened the impact of rising energy costs on consumers, inflationary pressures are increasingly spreading across other sectors of the economy.

A key factor supporting price growth remains strong wage dynamics. Rising household incomes continue to sustain consumer spending, preventing a significant slowdown in demand that could otherwise ease inflationary pressures.

Commodity markets have experienced heightened volatility in recent months. While the International Monetary Fund’s commodity price index in May remained slightly below its March 2026 peak, prices of energy commodities continue to fluctuate in response to developments in the conflict in the Middle East and disruptions to shipping routes through the Strait of Hormuz. These factors have also contributed to higher prices for a range of industrial commodities, particularly rare metals used in artificial intelligence-related industries. Food commodity prices have increased at a more moderate pace of around 5% year-on-year.

Another significant contributor to the increase in the WPI was the rise in market yields on 10-year Polish government bonds. The higher borrowing costs reflect growing global risk aversion, concerns about more persistent inflation, and uncertainty regarding the future direction of monetary policy by the National Bank of Poland. The pace of public debt accumulation in Poland has also influenced government bond yields.

Inflation expectations among both consumers and manufacturing companies eased slightly compared with the peak recorded in April. The government’s intervention in fuel pricing appears to have helped moderate concerns. Nevertheless, inflation expectations remain elevated relative to levels seen before the outbreak of the Middle East conflict.

Among manufacturers, the strongest intentions to raise prices were reported by companies operating in the petroleum, chemical, plastics and metal-processing industries.

Consumer sentiment has also stabilised after a sharp deterioration in April. The proportion of respondents expecting a rapid acceleration in inflation fell from 18% in March to around 9% in May. At the same time, nearly half of surveyed consumers expect prices to continue rising at roughly their current pace over the coming months.

The latest WPI data suggest that while inflation expectations have become less pessimistic, underlying price pressures remain strong, supported by resilient consumer demand, rising commodity costs and continued uncertainty in global markets.

Source: BIEC

Panattoni Secures €31 Million Financing for Poznań Logistics Development

Panattoni has secured €31 million in financing from Bank Millennium for the development of Panattoni Park Poznań West Gate I, a logistics complex located in Tarnowo Podgórne in western Poland.

According to Panattoni, the financing supports a project situated within one of Poland’s most active warehouse and industrial markets. The Wielkopolska region continues to attract logistics and manufacturing occupiers due to its developed transport infrastructure and strong connections to both domestic and Western European markets.

“Panattoni Park Poznań West Gate I is situated in one of the most developed and dynamic warehouse markets in Poland. Wielkopolska remains a key region for logistics and manufacturing, offering access to a well-developed road infrastructure and convenient connections to Western European markets,” said Emilia Taczewska-Trojańska. She added that the financing agreement reflects the attractiveness of the development and the continued strength of demand for modern logistics assets.

The scheme comprises two warehouse buildings with a combined area of nearly 61,000 sqm. Located in Tarnowo Podgórne, the complex benefits from direct access to national road No. 92 and proximity to the Poznań Tarnowo Podgórne interchange. It is also located approximately 6 km from the S11 expressway and around 20 km from the A2 motorway, providing connections to major markets including Berlin, Warsaw and Łódź.

Designed to accommodate logistics, distribution and light industrial activities, the facility will offer a clear height of 12 metres, 126 loading docks and almost 220 parking spaces, including 80 designated for heavy goods vehicles.

The development has achieved a BREEAM Excellent certification and incorporates a range of sustainability measures. These include energy-efficient technologies, water-saving solutions, infrastructure supporting sustainable transport and an on-site photovoltaic installation.

Panattoni has delivered close to 2 million sqm of industrial space across the Wielkopolska region, making it one of the most active logistics developers in the area. The latest financing further strengthens the company’s presence in one of Poland’s key industrial and distribution hubs.

Skyliner II Reaches Full Height as Construction Enters Final Phase

The second tower of the Skyliner complex in Warsaw has reached its target height of 130 metres, marking a major milestone in the development of the project by Karimpol Polska. A traditional topping-out ceremony was held at the construction site near Rondo Daszyńskiego to celebrate the completion of the building’s structural framework.

Once completed, Skyliner II will provide approximately 24,000 square metres of leasable space, including around 23,000 square metres of office accommodation and nearly 1,000 square metres of retail and service space. Construction is scheduled to finish in the fourth quarter of 2026, with the first tenants expected to move into the building during the first quarter of 2027.

According to Karimpol Polska, Skyliner II represents a continuation of the success of the neighbouring Skyliner I tower and forms part of the largest investment undertaken by the Karimpol Group to date. The development has already become a prominent addition to Warsaw’s rapidly expanding business district.

The tower’s construction has progressed at a notable pace. Since work began, approximately 26,000 cubic metres of concrete and 3,100 tonnes of steel have been used. The main contractor, WARBUD SA, completed 20 repetitive office floors in less than 22 weeks, averaging one floor every five working days.

With the structural works now complete, attention has shifted to façade installation, building services and interior finishing. The glass façade has already been installed up to the 22nd floor, while work continues on the upper levels. Construction is also progressing on the building’s distinctive architectural features, including elevated green terraces and the lantern-like structure that will crown the tower.

Interior fit-out works are well advanced. Partition walls, flooring and building services have been completed across much of the office space, while tiling, ceiling installation, bathroom fit-outs and lobby finishes are ongoing. Eight of the building’s ten lifts have already been installed, with three currently serving construction operations.

Leasing activity has also continued alongside construction. Tenants secured to date include Mindspace, Squarepoint Capital and Volkswagen Financial Services. Following the latest leasing agreement, the building has reached 50 percent occupancy.

Skyliner II is being developed to high sustainability standards and has achieved a BREEAM New Construction Outstanding certification. The building will be powered entirely by renewable energy and will feature four levels of landscaped terraces designed by RS Landscape Architecture. Occupiers will also have access to a five-level underground car park providing 217 parking spaces and 100 bicycle spaces.

The project was designed by APA Wojciechowski Architekci. Project management is being provided by Hill International, while leasing activities are overseen by CBRE.

Construction begins at Panattoni Business Park Prague I following brownfield redevelopment

Panattoni and investor Accolade have completed demolition works at the former Kovošrot metal recycling site in Prague’s Dolní Měcholupy district and have started construction of the first phase of Panattoni Business Park Prague I.

The development will transform a long-neglected industrial brownfield into a modern logistics and industrial park. Construction officially entered a new stage in early June with the installation of the first structural column of the project’s initial building.

The first phase will comprise three industrial buildings with a combined floor area of approximately 44,800 sqm within a development site covering nearly 140,000 sqm. The project is designed to deliver modern industrial space with a strong emphasis on sustainability, energy efficiency and low-carbon operation.

Planned environmental features include heat pumps, rooftop photovoltaic installations and electric vehicle charging stations. The first building is targeting BREEAM New Construction Outstanding certification, the highest level under the sustainability assessment scheme.

The development follows extensive site preparation works at a location that had been used for decades for the collection, sorting and recycling of metal waste. Existing structures have been demolished, while environmentally safe demolition materials are being recycled and reused on-site in line with circular economy principles.

“In Dolní Měcholupy, this is not just about constructing a new industrial building, but about the complete transformation of an area that has long been burdened by its industrial past,” said Jan Andrejco, Regional Development Director at Panattoni. “The completion of demolition works represents a significant milestone in every brownfield redevelopment project.”

Green infrastructure will play a major role in the development, with approximately one-quarter of the site dedicated to landscaped areas. The project also includes plans for improved accessibility, including a new cycle path running through the park.

As part of the wider infrastructure improvements linked to the project, upgrades have already been completed at the signal-controlled intersection of Černokostelecká and Průmyslová streets. The works, valued at nearly CZK 15 million, included additional turning lanes, relocation of public lighting and utility infrastructure, and new traffic signage.

According to Accolade, the redevelopment represents one of the largest industrial brownfield regeneration opportunities within Prague.

“We acquired the site in 2019 and from the beginning it was clear that a complete transformation would be required,” said Jiří Stránský, Chief Land Development Officer at Accolade. “There are very few brownfield sites in Prague suitable for industrial use that can match the former Kovošrot site in terms of size and accessibility.”

Completion of the first building is scheduled for February 2027, while the second phase of the development is expected to be delivered in 2029.

CASPYAN real estate fund surpasses CZK 100 million from investors after first full year

Czech real estate investment fund CASPYAN FUND SICAV has reported a successful first full year of operations, surpassing CZK 100 million in capital raised from qualified investors and growing net asset value to more than CZK 463 million.

The fund said 2025 marked an important transition from founder financing to an open-market investment model. New capital from external investors was used to accelerate project preparation and development activity across its Prague-focused portfolio.

CASPYAN’s RE/MIX sub-fund combines investments in residential development projects with income-generating properties. According to the fund, this strategy enabled it to exceed its targeted annual return of 10% during 2025.

“Launching and successfully establishing a new real estate fund in the highly competitive Czech market required significant effort, careful project preparation and, above all, the trust of our co-investors,” said Kamil Jankovský, Member of the Supervisory Board of CASPYAN. “The fact that new partners have joined us confirms that our focus on transparency and premium Prague locations has been the right strategy.”

The fund’s flagship project is Konstanta Karlín, a mixed-use development in Prague’s Karlín district. The scheme will comprise premium residential units and commercial space distributed across two interconnected buildings linked by a pedestrian passage connecting Kollárova Street with an inner courtyard garden.

CASPYAN’s portfolio in Karlín also includes the completed Fabrička office building, created through the redevelopment of a former steam power plant associated with Czech electrical engineering pioneer František Křižík, as well as a residential property on Kollárova Street that remains fully leased.

The fund’s largest investment exposure is linked to the ongoing redevelopment of the Dvory Vysočany brownfield site in Prague 9. The mixed-use project, which includes residential, office and retail components, entered its first development phase at the end of 2025.

Once completed, Dvory Vysočany is expected to deliver up to 600 residential units, making it one of the most significant projects within the fund’s portfolio.

CASPYAN said continued inflows of investor capital will support further acquisitions in the coming months as it seeks to expand its portfolio and maintain long-term growth.

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