Czech Households Continue to Feel Cost Pressure Despite Lower Inflation

Consumer spending in the Czech Republic continues to rise even as inflation has eased compared with previous years, with many households still struggling to absorb higher everyday costs.

Recent survey data published by Home Credit Czech Republic indicates that a majority of households believe their monthly expenses have increased over the past year. Food, utilities, transport and service-related costs remain among the main contributors to tighter household budgets, despite the broader slowdown in inflation growth.

The pressure is particularly visible among lower-income households, which continue to feel the effects of several years of elevated prices more strongly than higher earners. According to analysts, families with smaller financial reserves are more exposed because a larger proportion of their spending is tied to essential items such as groceries, housing and energy.

Economists note that although headline inflation in the Czech Republic has stabilised near the central bank’s target range, consumers are still reacting to the cumulative effect of previous price increases. Many households are therefore continuing to adjust their spending habits even as the pace of inflation moderates.

Travel and leisure are among the first areas where consumers are reducing expenses. Some households are also limiting spending on clothing and changing purchasing behaviour in supermarkets by choosing lower-cost products, promotions or discount retailers. Healthcare spending, however, has remained relatively protected compared with other categories.

The survey also highlights the growing strain on household financial reserves. Many respondents said that several thousand Czech crowns in additional monthly income would significantly improve their financial situation, suggesting that while households are still managing current costs, budget flexibility has become increasingly limited.

Financial analysts say the current environment reflects a broader shift in consumer behaviour across Central Europe, where households remain cautious despite improving macroeconomic indicators. While wage growth and easing inflation are gradually supporting purchasing power, many consumers continue prioritising savings and essential spending over discretionary purchases.

The findings underline the continuing gap between improving economic statistics and how households perceive their own financial stability, particularly after several years of inflation-driven increases in living costs.

Czech Housing Supply Growth Fails to Ease Pressure on Apartment Prices

An increase in residential construction activity across the Czech Republic during the first quarter of 2026 is unlikely to slow the rise in housing prices, particularly in Prague, where demand continues to outpace supply.

Data published by the Czech Statistical Office (ČSÚ) showed that nearly 9,700 homes entered the construction phase during the first three months of the year, representing a year-on-year increase of almost 17 percent. Despite the improvement in activity, analysts and market specialists say the figures remain insufficient to resolve long-term shortages in the country’s largest urban markets.

While construction activity increased nationally, much of the growth was concentrated outside the capital. Regional cities and surrounding areas recorded stronger development momentum, while Prague itself experienced a slowdown in newly launched residential projects compared with the previous year.

Market observers note that this geographical imbalance limits the impact additional construction may have on overall affordability. Demand in Prague remains significantly stronger than in most regional markets, supported by population growth, limited available stock and continued interest from buyers despite elevated financing costs.

Developers and economists say the market is still dealing with the consequences of several years of underbuilding. Although housing completions remain relatively stable, the pace of new supply is not considered sufficient to close the structural gap between demand and available housing.

The situation is particularly visible in the capital’s new-build segment, where asking prices continue to rise. According to market analyses from major residential developers and property platforms, prices for new apartments in Prague development schemes remain above CZK 180,000 per sqm, while older apartments across the Czech Republic also continue to record price growth.

Industry experts also caution that planned regulatory changes aimed at accelerating permitting procedures are unlikely to deliver an immediate reduction in apartment prices. While faster approvals could support higher construction volumes over the longer term, analysts argue that residential values are still primarily driven by the imbalance between supply and demand rather than by construction costs alone.

At the same time, geopolitical tensions and higher energy prices are creating additional uncertainty for the sector. Rising material, labour and financing costs continue to affect developers’ calculations and may place further upward pressure on future housing prices.

Property consultants say that sustained growth in housing supply over several years would be required before meaningful price stabilisation could occur, especially in Prague, where housing availability remains one of the market’s most persistent challenges.

German Transport Sector Faces Rising Insolvencies Amid Fuel Costs and Geopolitical Tensions

Atradius has warned that insolvencies in Germany’s transport and logistics sector are expected to rise significantly in 2026 as the industry comes under increasing pressure from geopolitical tensions, rising fuel prices and weak operating margins.

According to the credit insurer, the escalation of conflict in the Middle East and the disruption of shipping through the Strait of Hormuz have intensified existing challenges facing freight forwarders and logistics operators. Higher diesel costs, labour shortages, increasing personnel expenses and strong competition are contributing to worsening financial conditions across the sector.

Frank Liebold, Country Director Germany at Atradius, said the German transport and logistics industry has for years ranked among the sectors with the highest insolvency rates in the country and warned that the situation is likely to deteriorate further during 2026.

Atradius estimates that one in four small and medium-sized transport companies is currently at acute risk. The company noted that many freight forwarders are required to pay diesel costs immediately while customer payments are often only received after 60 days, placing significant pressure on liquidity. With profit margins below three percent in many cases, the financing burden has become increasingly difficult for smaller operators.

The insurer said non-payment notifications during the first four months of 2026 have already exceeded levels recorded in previous years. In 2025, 469 logistics companies in Germany filed for insolvency, including 19 businesses with annual revenues above €10 million. The insolvency rate increased by 5.6 percent compared with 2024.

The sector is also facing mounting costs linked to digitalisation and the continuing shortage of drivers, while competition from lower-cost Eastern European transport operators continues to pressure margins.

Atradius cited forecasts from Oxford Economics showing global transport and logistics growth of 2.4 percent in 2025, down by one percentage point from projections made before the escalation of the US-Israel-Iran conflict. In a scenario where disruption in the Strait of Hormuz continues for another six months, Atradius said growth in the sector could fall to zero. For Germany specifically, the insurer expects the transport and logistics sector to contract by 2.1 percent.

The company also warned that higher transport costs are likely to feed directly into consumer prices, particularly food inflation. According to Atradius, food prices could rise by up to 10 percent in the short to medium term as energy and transport costs increase across the supply chain, from agricultural production to distribution.

Atradius said current measures introduced by the German government may not be sufficient to offset the impact on smaller freight operators. The insurer noted that several European countries have already reduced mineral oil taxes or released emergency reserves, while Germany has yet to introduce a broader commercial diesel support mechanism.

At the same time, the company suggested that the current fuel price shock could accelerate investment in alternative transport technologies such as electric and hydrogen-powered trucks. However, Atradius cautioned that many operators currently lack the capital required to finance the transition without additional government support.

Catella Reports Improved Underlying Earnings as European Real Estate Markets Stabilise

Catella reported improved underlying earnings in the first quarter of 2026 despite continued macroeconomic and geopolitical uncertainty affecting European real estate markets.

The company said escalating tensions in the Middle East, ongoing energy market volatility and cautious investor sentiment continued to slow decision-making and delay transactions across the property sector. While market conditions remain uncertain, Catella noted that the repricing phase in European real estate appears to be largely complete, with signs of stabilisation emerging through modest value recovery, improving financing conditions and gradually rising transaction activity.

Catella reported an operating loss of SEK 45 million in the first quarter, compared with a loss of SEK 43 million a year earlier. Total income declined to SEK 303 million from SEK 341 million in the same period of 2025. Recurring revenues accounted for 67 percent of total income.

The company stated that, after adjusting for non-recurring items in the prior-year period, including rental income from Kaktus Towers which was divested in May 2025, adjusted operating profit improved by SEK 26 million year-on-year.

Assets under management increased from SEK 155 billion at the end of 2025 to SEK 160 billion as of 31 March 2026. The increase was partly linked to a reporting change that now includes assets under development within AUM calculations. Excluding this adjustment, AUM declined by SEK 3 billion during the quarter due to softer valuations, mandate terminations in Finland and redemptions.

The company said it continues to see opportunities in residential and operational living sectors, particularly affordable rental housing, student accommodation, senior housing, co-living and serviced apartments in urban markets across the Nordics, Spain and Germany. According to Catella, these sectors continue to benefit from structural housing shortages, low vacancy levels and population growth in major cities.

During the quarter, Catella implemented a new organisational structure focused on two business areas: Investment Management and Corporate Finance. The company said the changes are intended to improve transparency, accountability and operational efficiency across its pan-European operations.

As part of its investment strategy, Catella also completed a joint venture with Pictet Alternative Advisors to develop 205 apartments in Greater Copenhagen. The company described the structure as a capital-efficient co-investment model designed to generate long-term fee income while limiting equity exposure.

In early April, Catella repurchased SEK 140 million of its own bonds to reduce debt and interest costs. Subject to shareholder approval at the annual general meeting on 12 May 2026, the board also plans to launch a share buyback programme of up to SEK 100 million in Class B shares.

Within Corporate Finance, first-quarter income remained stable at SEK 73 million, while the operating loss improved to SEK 29 million from SEK 33 million in the corresponding period last year.

Among the mandates completed during the quarter was the refinancing of a residential development project in Herlev, where Catella Corporate Finance Denmark acted as adviser to DWS on a DKK 1 billion refinancing transaction.

Looking ahead, Catella said it expects European real estate markets to continue recovering gradually, although volatility and uncertainty are likely to persist. The company identified affordable housing, selected retail assets and logistics investments as areas where investment opportunities are improving, while noting that demand for high-quality office assets remains driven by location and sustainability considerations.

Skanska Secures SEK 990M Contract for New Sports Facility in Malmö

Skanska has signed an agreement with the City of Malmö to begin the second phase of a new football and athletics facility in Malmö. The contract is valued at approximately SEK 990 million and will be included in the company’s order bookings for Sweden in the second quarter of 2026.

The company has already spent around a year working on the project’s initial phase, which included development planning and the demolition of the existing stadium. Construction of the new facility is expected to begin shortly.

The venue is being designed to meet international standards for both athletics competitions and football matches and will have capacity for up to 8,000 spectators. The scheme will include running tracks, jumping facilities and a javelin throw track.

In addition to the sports infrastructure, the development will provide changing rooms and related facilities, media areas, storage space and catering facilities.

The project is scheduled for completion around the turn of 2028 and 2029.

German Tax Forecast Points to Growing Pressure on Federal Budget Planning

Germany’s latest tax revenue forecast indicates that public finances will come under increasing pressure over the coming years, with lower-than-expected revenues likely to complicate the federal government’s fiscal planning through to 2030.

According to the updated estimates presented this week, overall tax revenues for the period between 2026 and 2030 are expected to fall significantly below the projections published last autumn. The weaker outlook reflects slower economic growth, subdued corporate profitability and lower investment activity, alongside the fiscal impact of recently introduced tax relief measures.

Commenting on the forecast, Teresa Schildmann, researcher in the Macroeconomics Department at DIW Berlin and member of Germany’s Working Group on Tax Revenue Forecasting, said the latest figures should be viewed as a warning signal for fiscal policy.

“The federal government’s financial room for manoeuvre is shrinking again,” Schildmann said, adding that weaker economic momentum and additional tax relief measures are likely to make budget preparation more difficult in the coming years.

She noted that while higher energy prices may temporarily support some revenues, particularly through value-added tax receipts, the broader economic impact remains negative. According to Schildmann, elevated uncertainty continues to weigh on consumption and investment, resulting in weaker growth and lower revenues from profit-related taxes.

The forecast also reflects the fiscal effects of several policy measures introduced in recent years, including the permanent reduction of VAT for the restaurant sector and lower electricity taxes for parts of German industry.

The updated outlook comes at a time when Germany is facing growing pressure to balance support for households and businesses with the need to stabilise public finances. Additional revenues from excise taxes are unlikely to offset the broader deterioration in fiscal conditions.

Schildmann argued that policymakers may increasingly need to focus on expenditure reforms, including a review of subsidies, improvements in administrative efficiency and longer-term adjustments to social security systems.

“The crucial factor will be to sustainably stabilise public finances without placing additional pressure on the economic recovery,” she said.

Recent estimates reported by international media indicate that expected German tax revenues for the 2026–2030 period have been revised down substantially compared with forecasts published in October, adding further pressure to the country’s medium-term budget framework.

Middle East Conflict Drives Global Natural Gas Market Disruption

Global natural gas markets faced significant disruption in the first quarter of 2026 as the conflict in the Middle East and the closure of the Strait of Hormuz triggered supply shortages, higher LNG prices and growing concerns over long-term energy security, according to a new report by Kamco Invest.

The report noted that European natural gas prices rose sharply in March 2026, with average monthly prices increasing by 35.3 percent year-on-year to USD 17.91/MMBtu, the highest level since January 2023. LNG prices in Japan and South Korea also climbed, rising 18.4 percent year-on-year to USD 14.85/MMBtu.

According to the report, the market volatility was largely linked to disruptions caused by the closure of the Strait of Hormuz, which affected around 20 percent of global LNG supplies, particularly exports from Qatar’s Ras Laffan facility. Damage to parts of the facility and force majeure declarations on several LNG delivery contracts have added further uncertainty to the market.

The International Energy Agency estimates that the conflict could result in the loss of around 120 bcm of cumulative LNG supply between 2026 and 2030, equivalent to roughly 15 percent of expected global LNG supply growth over that period.

Global LNG production declined by 8 percent year-on-year in March 2026, mainly due to lower exports from Qatar and the UAE. However, the decline was partly offset by rising LNG production from North America and Africa, including new projects in the United States.

The report highlighted that global LNG imports fell by 1.7 percent year-on-year in March 2026, marking the first annual decline since January 2025. Asian markets were particularly affected, with LNG imports in the region falling to their lowest March level in seven years as buyers prepared for tighter supplies. More than 80 percent of LNG passing through the Strait of Hormuz had previously been destined for Asian markets.

Several Asian countries have reportedly started implementing fuel-switching measures to reduce reliance on natural gas, including increased use of coal for power generation.

Despite the supply shock, the report said US natural gas prices moved in the opposite direction, declining by 26.2 percent year-on-year in March 2026 due to rising inventories and milder weather conditions. US gas production also continued to increase, supported by strong LNG export demand and new export infrastructure.

Global natural gas consumption increased modestly during the first months of 2026, with demand growth recorded in Europe, the Middle East and Asia, while North America saw a decline. EU gas consumption rose by 1 percent year-on-year in the first quarter, supported by colder weather in January, while US consumption fell by 1.6 percent over the same period.

The report also warned that the disruption extends beyond immediate supply shortages. Damage to infrastructure at Qatar’s Ras Laffan complex, including LNG trains and gas-to-liquid facilities, could take between three and five years to repair. Kamco Invest cited estimates suggesting cumulative LNG supply losses from the site could reach between 50 bcm and 90 bcm between 2026 and 2030.

According to the report, around 110 bcm of LNG, representing nearly 20 percent of global LNG trade, passed through the Strait of Hormuz in 2025, underlining the strategic importance of the route for international energy markets.

Panattoni to Develop 20,000 sqm BTS Logistics Centre for Toyota in Warsaw

Panattoni has started the development of a new logistics centre in Warsaw for Toyota Logistics Services Poland. The project, which will be delivered in a build-to-suit (BTS) format within the City Logistics Warsaw Airport IV complex, will provide nearly 20,000 sqm of warehouse, logistics, office and social space.

Construction is scheduled to begin in May 2026, while operations at the new facility are expected to commence in June 2027.

Toyota Logistics Services Poland will relocate from its current premises to the new site while maintaining operational continuity and retaining its existing workforce. The facility will mainly support the Polish market and is intended to strengthen the company’s logistics capabilities and supply chain operations.

“Delivering a logistics centre for Toyota Logistics Services Poland is another example of the growing importance of BTS projects in a mature industrial real estate market. Well-established companies are increasingly opting for tailor-made solutions that allow facilities to be precisely aligned with operational processes, secure long-term business needs and improve the efficiency of the entire supply chain. Our cooperation with Toyota, a global automotive leader and one of the world’s most recognisable brands, is a strong sign of trust. We are pleased to support our partner in the further development of its operations in Poland,” said Michał Samborski.

The facility has been designed to meet the tenant’s operational requirements, including a warehouse layout that will allow for the construction of a mezzanine of around 4,000 sqm. The project will also include dedicated storage space for products requiring special handling, such as oils and airbags.

In addition, the building will incorporate energy-efficiency measures including air-to-air heat pumps and a mechanical ventilation system with heat recovery.

According to Panattoni, the Warsaw warehouse market remained the largest in Poland in 2025, recording more than 1.4 million sqm of gross take-up, representing around 21 percent of total national demand. The developer noted that build-to-suit developments and pre-let agreements are becoming increasingly important as companies seek facilities tailored to specific operational and technical needs.

The City Logistics Warsaw Airport IV location was selected due to its proximity to Toyota Logistics Services Poland’s current headquarters and access to transport infrastructure, including major road connections and the airport.

JLL advised Toyota Logistics Services Poland during the site selection and lease negotiations process.

“The key to this project’s success was understanding that Toyota needed more than just additional space – it required the right location and a facility precisely tailored to the specifics of automotive operations. To achieve this, the advisory process involved a detailed analysis of the Warsaw market in terms of availability and location parameters. Building on these findings, the team then conducted in-depth work on the technical requirements. Ultimately, the build-to-suit formula made it possible to combine a strategic location with infrastructure designed exactly around the client’s operational processes,” said Karol Gajewski.

The Warsaw project follows Panattoni’s previous BTS developments for Toyota-branded operations in the CEE region, including a nearly 14,000 sqm facility for Toyota Material Handling at Panattoni Business Park Zdice in the Czech Republic.

Mindspace Expands ESG-Focused Workplace Strategy Across Global Portfolio

The office sector’s growing focus on ESG commitments continues to reshape workplace strategies, with flexible office operator Mindspace outlining a broader sustainability framework across its international portfolio.

The company, which operates more than 50 locations globally, said it has been implementing environmental and social initiatives through its “Mindspace Impact” programme, covering operational efficiency, workplace design, employee development and community engagement.

“At Mindspace, we believe that sustainability is essential to our long-term success, which is why we operate in a way that benefits the environment, our employees and our community,” said Michał Kwinta.

According to the company, ESG initiatives are integrated across all locations and include efforts to reduce energy and resource consumption through operational systems such as automated air-conditioning controls, motion-sensor lighting and water-saving technologies. Mindspace said measures introduced across its portfolio contributed to an average reduction in carbon emissions of 21 percent, based on an internal report prepared in cooperation with KVS Consulting.

The operator has also incorporated sustainability measures into new office fit-outs, including the use of repurposed furniture and second-life materials sourced locally to reduce transport-related emissions. Furniture removed during refurbishment projects is either reused or sold, with proceeds directed to charitable causes, the company said.

Beyond environmental measures, Mindspace said its ESG framework also focuses on employee development and social impact initiatives. Teams across different markets participate in volunteer projects supporting local communities, while the company continues to invest in internal training programmes and leadership development.

The company stated that diversity and multiculturalism remain part of its organisational strategy, citing internal survey data indicating that 75 percent of employees rate workplace diversity as “very good” or “excellent”.

Flexible office operators have increasingly positioned workspace efficiency and hybrid working models as part of broader sustainability strategies. According to Mindspace, shared and scalable office infrastructure can help companies optimise space utilisation and reduce excess resource consumption compared with traditional office models.

The company also stated that hybrid workplace solutions may contribute to reducing commuting-related environmental impacts, based on its internal analyses.

As occupiers across Europe continue to review workplace footprints and ESG obligations, operators in the flexible office sector are placing greater emphasis on efficiency, adaptability and operational sustainability as part of their long-term growth strategies.

Open House Brno Expands 2026 Programme with New Locations and Cultural Events

The organisers of the 2026 edition of the Open House Brno festival have released the full programme for this year’s event, which will include access to 132 locations across the city, accompanied by concerts, guided walks, workshops and family activities.

Running from 15 to 17 May, the festival will open 28 new sites to the public for the first time as part of its ninth edition. Organisers said that although many guided tours requiring reservations were booked shortly after registration opened, visitors still have opportunities to secure places as tickets continue to be returned or exchanged until 14 May.

Lucie Pešl Šilerová, the festival’s creative director, said visitors could also choose from more than 80 locations that do not require reservations. She added that this year’s accompanying programme has been expanded to include guided walks, workshops, concerts, exhibitions and the “Visual Stories” competition for adults and children. A new addition for 2026 is the Open House Cinema project, organised in cooperation with the festival’s main media partner, Czech Television.

Participating venues accessible without reservations include Industra, Kino Lucerna and Orlovna Královo Pole. The accompanying гастро programme, Open Gastro Brno, will again involve cafés and bars across the city, with participating businesses offering festival visitors discounts ranging from 10% to 20%.

An information point will operate at Zámečnická 2 in central Brno from 13 May until the end of the festival, providing maps, brochures and visitor assistance. Festival organisers have also published an online timetable and digital map to help attendees plan visits between locations.

This year’s festival theme, “Through the Stream of Change”, focuses on the city’s architectural development and transformation. Festival curator Šárka Bahounková said the programme includes a series of curated walks exploring Brno’s urban development, industrial history and architecture connected to the city’s trade fair grounds.

Among the locations opening for the first time are the AZ Tower apartment on the 28th floor, the Great Synagogue, the Supreme Court, the Supreme Administrative Court and several university and industrial buildings.

The festival will also host three music events combining architecture and live performance. Concerts are scheduled at the Chapel of Christ on the Mount of Olives, the uncovered remains of the Great Synagogue and the Funeral Hall in Židenice, where organisers will commemorate the centenary of architect Ivan Ruller’s birth.

In addition to the Brno programme, organisers confirmed that the Open House concept will expand to Boskovice on 30 May, where 17 locations are expected to open to the public. The organisers are continuing to recruit volunteers for the Boskovice event, which they say plays a key role in keeping the festival free to attend.

Open House Worldwide, the international network to which Open House Brno belongs, includes more than 50 cities worldwide and attracts over two million visitors annually. Brno has been part of the network since 2018.

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