Czech real estate investment surges in Q1 2025, outpacing entire 2023

The Czech commercial real estate market recorded unprecedented investment activity in the first quarter of 2025, with transaction volumes already exceeding the total for all of 2023. According to data released by Colliers, investment reached EUR 1.48 billion in Q1 alone, surpassing last year’s full-year total of EUR 1.15 billion. The growth was driven by several major transactions, each exceeding EUR 100 million.

“Several significant transactions were finalized in the opening months of the year. While some were long-anticipated, others came as a surprise to the market,” said Josef Stanko, Director of Market Research at Colliers. “The total volume reached EUR 1.48 billion, more than what we saw throughout 2023.”

Among the most notable transactions was the acquisition of Contera/TPG’s industrial portfolio in the Czech Republic and Slovakia. Blackstone, one of the largest real estate investors globally, acquired the Czech portion of the portfolio in a deal worth approximately EUR 370 million.

Another landmark transaction involved the acquisition of Hilton Prague—Central and Eastern Europe’s largest hotel with 791 rooms—by Czech investment group PPF. Valued at over EUR 250 million, it represents the most expensive single-hotel acquisition ever recorded in the region.

Redstone Real Estate Group also completed two high-profile acquisitions in Prague worth over EUR 300 million. The group acquired the Myslbek office and retail complex on Na Příkopě Street from AEW, and Atrium Flora—an established shopping centre with adjoining offices in Prague 3—from G City Europe.

“These deals highlight both the strength of Czech capital and the appeal of the Czech Republic to large international investors,” Stanko noted. Domestic investors accounted for 72% of total investment volume, while Prague alone attracted 70% of all capital deployed in the country during Q1.

Yield Stability Supports Market Activity

The investment surge has been supported by a stable yield environment. At the end of Q1 2025, prime office yields stood at 5.50%, industrial yields at 5.25%, and retail yields ranged from 4.50% for premium shopping centres to 6.25% for retail parks. This consistency has helped align price expectations between buyers and sellers, facilitating deal closures.

Looking ahead, Colliers projects that total real estate investment in the Czech Republic could reach or even exceed EUR 2.5 billion in 2025. Industrial real estate is expected to make up a larger portion of the total than in the previous two years.

Wider Growth Across CEE

The strong investment momentum observed in the Czech Republic was also reflected across the broader Central and Eastern Europe (CEE) region. All major sectors—except residential—posted growth in Q1 2025. The industrial and logistics segment led the way with EUR 800 million in investment, tripling its volume year-on-year and reclaiming the top spot in the regional rankings.

Retail investment increased by 38% compared to Q1 2024, though the pace of growth has slowed amid shifting consumer behaviour and persistent high interest rates. Nonetheless, rising consumer spending continues to support the sector.

The office market recorded a strong rebound, with regional investment volumes more than tripling year-on-year. Notably, the Czech Republic and Bulgaria posted the strongest gains, with year-on-year increases of 618% and 806%, respectively. Meanwhile, the hotel sector saw investment volumes rise nearly ninefold—well above the five-year average—driven in part by transactions like the Hilton Prague acquisition.

Colliers expects total annual investment volumes in CEE to once again exceed EUR 10 billion in 2025, reflecting renewed investor interest and increased transactional activity across the region.

Source: Colliers Czech Republic

EU economy maintains moderate growth amid mixed business and environmental signals

The European Union economy continues on a path of moderate and stable growth, with GDP expanding at a steady pace for the sixth consecutive quarter. This sustained economic activity is supported by historically low and stable unemployment rates and a continued decline in inflation, reflecting an overall resilient macroeconomic environment.

Despite these positive trends, some underlying indicators point to softening momentum. While the number of bankruptcy declarations has declined, economic sentiment has weakened further and the rate of new business registrations has slowed, suggesting caution among entrepreneurs and investors.

Sectoral performance has been uneven. Industrial production showed improvement for the third consecutive month, indicating a gradual recovery in manufacturing. Retail trade remained largely stable, whereas the services sector experienced a contraction in output. On the fiscal front, both the government deficit and gross public debt as a share of GDP declined, signalling a strengthening in public finances across the bloc.

Environmental indicators offered a mixed outlook. Although air pollution levels in EU capitals have fallen, greenhouse gas emissions increased during the reporting period. Monthly electricity consumption across the EU also declined, yet the share of electricity generated from renewable sources unexpectedly dropped, raising questions about the consistency of the transition to cleaner energy.

Overall, the EU economy remains on a modest upward trajectory, but shifting business conditions and environmental challenges underscore the need for continued policy attention to ensure long-term stability and sustainability.

Raising water abstraction charges could ease Spree river shortages, DIW study finds

A recent study by the German Institute for Economic Research (DIW Berlin) and the Technical University of Berlin (TU) suggests that harmonising and raising water abstraction charges in Berlin, Brandenburg, and Saxony could significantly reduce water demand along the Spree River. The researchers estimate that aligning water charges with Berlin’s current groundwater rates could lower demand by up to 16 percent, offering a potential solution to the region’s growing water shortages.

The Spree has long been supported by groundwater pumped from opencast lignite mines in Lusatia. However, with the planned phase-out of lignite-fired power generation by the 2030s, these artificial inflows will cease. The result is a looming water deficit that may intensify competition between agriculture, industry, tourism, municipal services, and environmental needs.

The study examined various pricing scenarios and found that energy producers, industry, and commerce would achieve the largest reductions in water use. According to Claudia Kemfert, head of the Energy, Transport and Environment Department at DIW Berlin, the findings demonstrate that better pricing mechanisms can act as a viable alternative to controversial infrastructure proposals, such as diverting water from the Elbe to the Spree.

Kemfert argues that transferring water from the Elbe would merely shift water scarcity from one region to another, affecting areas such as Hamburg. Instead, she advocates for a shift in political strategy toward sustainable water management through a combination of economic instruments and ecological restoration.

In addition to pricing reforms, the study highlights measures to increase water availability. One recommendation is the renaturation of river floodplains, which could contribute as much as 0.66 cubic metres of water per second to the Spree. This approach is seen as a more environmentally sustainable means of boosting supply without disrupting hydrological balances elsewhere.

Christian von Hirschhausen, another co-author of the study, emphasises the potential benefits of bringing forward the lignite phase-out. Contrary to concerns that an early exit from coal might worsen the water situation, the study suggests it would ease pressure on groundwater systems and support a more sustainable transition. He also notes that water management in Lusatia should be decoupled from the timeline of coal phase-out planning. Continued pumping from former mines, on a transitional basis, could help mitigate the supply gap.

The researchers further suggest that reducing the planned surface area of future opencast mining lakes could conserve water. They warn that as water levels drop, unresolved tensions between competing users will intensify unless addressed proactively. Identifying these distribution conflicts early on will be key to avoiding disputes and ensuring equitable access.

Ultimately, the study positions coordinated demand and supply-side reforms as more effective and sustainable than large-scale water transfers. Policymakers are urged to revise incentive structures, strengthen environmental regulation, and invest in nature-based solutions to manage future water needs in the Spree region.

Roztyly Plaza named Best Office Development in Central and Eastern Europe at HOF Awards 2025

The office building Roztyly Plaza, developed by Passerinvest Group in Prague’s Roztyly district, has been awarded the title of Best of the Best Office Development of the Year 2025 at the prestigious HOF Awards. The recognition marks a significant achievement for the project, which was selected from among the top national winners of last year’s CIJ Awards across Central, Eastern, and Southeastern Europe.

Now in its tenth edition, the HOF (Hall of Fame) Awards celebrate the most outstanding real estate developments, companies, and industry professionals in the region. Each year, national winners from the CIJ Awards advance to compete at the international level, where the very best projects are selected based on their quality, impact, and innovation. Roztyly Plaza stood out for its architectural quality, technological sophistication, and contribution to the transformation of Prague’s Roztyly area.

The voting process at the HOF Awards combines evaluations from a 37-member professional jury with input from CIJ’s regional readership, creating a transparent and comprehensive system that reflects both expert opinions and market perception. The award serves as a testament to Roztyly Plaza’s strong reception within both the professional community and the broader real estate industry.

Roztyly Plaza was completed in spring 2024 and has quickly become a landmark in one of Prague’s most dynamically evolving urban zones. Strategically located at a key transport junction with excellent metro and highway access, the building offers over 21,700 sqm of leasable space that meets the highest standards of environmental sustainability and tenant comfort.

The project incorporates modern architecture and advanced technologies aimed at improving operational efficiency and user well-being. It is certified to high environmental standards, including LEED and WELL, which reflect its low energy consumption and focus on healthy interior environments. In addition to flexible office layouts, the development includes a range of amenities designed to enhance tenant satisfaction, including a green inner courtyard, accessible terraces, retail and dining services, and generous natural lighting throughout.

Passerinvest Group, the developer behind Roztyly Plaza, has played a long-term role in shaping the Roztyly district. The company’s vision for the area involves a mixed-use urban concept that integrates offices, public spaces, residential development, and improved mobility infrastructure. Roztyly Plaza is a cornerstone of this strategy and exemplifies the group’s approach to sustainable and human-centered urban development.

The international success of Roztyly Plaza at the HOF Awards confirms not only the quality of the building itself but also Prague’s growing importance as a hub for high-standard commercial real estate in Central Europe. As the demand for sustainable, well-located office space continues to grow, developments like Roztyly Plaza set a benchmark for future urban regeneration projects across the region.

CTP converts former warehouse at CTPark Bor into modern logistics facility for DB Schenker

CTP has completed the conversion of a former tire warehouse at CTPark Bor into a logistics facility now operated by DB Schenker. The refurbished space spans 17,500 sqm and has been fully modernized, including new administrative areas. This project forms part of CTP’s ongoing development of CTPark Bor, which will eventually offer up to 116,000 sqm of logistics space built to high industrial and sustainability standards.

The redevelopment allowed DB Schenker to consolidate and expand its operations in the Czech Republic. The company, which currently manages close to 32,000 sqm of space across multiple CTPark sites in the country—including Nový Jičín, Humpolec, Blučina, and Bor—has now relocated its warehousing activities into the updated facility. The upgrade included comprehensive interior cleaning and renovation to meet DB Schenker’s operational needs. Key works involved removing residual rubber vapor, cleaning and degreasing metal and concrete surfaces, and resurfacing the entire floor. A new two-level office mezzanine and expanded parking areas were also added.

According to DB Schenker, the move was completed without disruption to ongoing operations. The company highlighted the tailored nature of the renovation, which has improved both logistical efficiency and working conditions. The new facility is designed to support enhanced regional service capabilities, with attention also paid to environmental performance.

Sustainability played a central role in the project. The renovated building received BREEAM Very Good certification, indicating strong energy efficiency and environmentally responsible construction practices. CTPark Bor is equipped with rooftop solar installations capable of covering the park’s total energy demand. Additional green features include electric vehicle charging stations and access to public transport links.

CTP noted that the transformation of the former warehouse demonstrates its collaborative approach with clients. The company emphasized that the updated facility reflects ongoing efforts to adapt existing structures to modern logistics requirements. CTPark Bor remains a strategic site due to its location in western Bohemia, approximately 50 km from Plzeň and 15 km from the German border, making it well-suited for distribution to markets across Central and Western Europe.

In addition to its logistics capabilities, CTPark Bor includes the Clubhaus community centre, which provides shared amenities for tenants, their staff, and local residents. The facility offers space for meetings, leisure, and informal interaction, contributing to a more connected and supportive business environment within the park.

Polish government adopts third deregulation package to ease tax and investment rules

On 20 May 2025, the Council of Ministers approved a third set of legislative proposals under its ongoing deregulation initiative, aimed at reducing administrative burdens and improving legal clarity for investors, entrepreneurs, and financial institutions. The new package, prepared in cooperation with the Ministry of Finance, introduces amendments to several laws covering taxation, inheritance, restructuring, and investment funds.

One of the key proposals focuses on updating the rules for tax refunds in the event of revocation of permits or decisions supporting investments in the Polish Investment Zone (PSI) or Special Economic Zones (SEZ). Under the current system, entrepreneurs are required to return the entire amount of public aid, even if only part of it was used. The new legislation will allow businesses to repay only the tax exemptions linked specifically to the income from activities associated with the revoked decision or permit. This change is expected to make the tax exemption system more attractive and fair, especially for companies planning to expand or invest further in Poland.

The amendments also aim to ease the functioning of general partnerships and tax capital groups. General partnerships will no longer be required to submit annual information about their shareholders if there has been no change in their composition. For tax capital groups, the revised law removes the automatic loss of corporate income taxpayer status if a transaction with an external related party is found to be non-market based, regardless of the scale or intent. This will enhance legal certainty and operational stability for businesses operating within such structures.

Significant changes are also proposed for the Act on Inheritance and Donation Tax. The updated rules simplify tax settlements for recurring benefits such as pensions and bring back the previously used method of reporting only summary information to tax authorities. The changes respond to complications introduced by a recent Supreme Administrative Court ruling and are expected to streamline tax administration for both citizens and authorities. Additionally, individuals will no longer be required to obtain tax office certificates confirming payment or exemption when acquiring property through a notarial deed or from close family members, further reducing bureaucratic requirements.

The third deregulation package also includes amendments to banking and restructuring laws. Currently, bankruptcy and restructuring proceedings are hampered by limited access to financial data due to banking secrecy regulations. The new provisions will authorize banks and cooperative credit unions to share protected financial information with court-appointed administrators, receivers, and supervisors involved in insolvency procedures, ensuring smoother proceedings and better protection of creditors’ interests.

Changes are also being made to facilitate mergers of non-public closed-end investment funds managed by the same fund management company. Presently, these mergers require a supermajority vote from fund participants, which often proves difficult to obtain. The new regulations will lower the threshold for consent from two-thirds to a simple majority. If the required participation is not met at the first meeting, a second assembly may be convened, and approval can be granted with the majority of those present or represented. This modification is intended to make fund consolidations more practical and responsive to market needs.

The proposed amendments to personal income tax, corporate income tax, inheritance and donation tax, the Banking Law, and the Act on Investment Funds and Management of Alternative Investment Funds are expected to take effect in stages. Most of the measures will come into force either on 1 January 2026 or within 14 days following their publication in the Journal of Laws.

This latest package continues the government’s effort to streamline regulatory frameworks and encourage investment by reducing legal and procedural complexity in key areas of economic activity.

Polish Ministry of Finance warns public about ongoing email fraud attempt

The Ministry of Finance and the National Revenue Administration (KAS) have issued an urgent warning about a wave of fraudulent emails currently circulating, in which scammers impersonate official government institutions. These deceptive messages are designed to mislead recipients into revealing sensitive personal and financial information.

According to authorities, the fraudulent emails often reference tax refunds or the need to confirm personal identification data under the pretext of processing payments. In doing so, the perpetrators attempt to gain access to private details such as bank account numbers, login credentials, and other confidential data.

The emails may include links or attachments that, once clicked, redirect users to counterfeit websites that closely resemble official government portals. These websites may prompt victims to enter their personal data, which is then used for identity theft or financial fraud. The Ministry stresses that these emails are not issued by any legitimate state body and that users should not respond to them or click on any links.

Citizens are urged to exercise caution and verify the source of any email purporting to be from the Ministry of Finance or KAS. If there is any doubt about the authenticity of a message, individuals are encouraged to contact the KAS hotline at 22 330 03 30 to report the incident or seek guidance.

The Ministry continues to monitor the situation and is cooperating with relevant authorities to identify and take action against those responsible. In the meantime, the public is reminded to remain vigilant and to protect their personal data by avoiding suspicious emails and regularly updating their security practices.

Skanska begins construction of large-scale residential district in Prague’s Malešice

Skanska Residential has launched construction of a major new housing development in the Malešice district of Prague. The project, named Habitat, will deliver approximately 1,000 new apartments over the next decade on a 70,000 sqm brownfield site in Prague 10, along Černokostelecká Street. The total investment is expected to reach into the higher billions of Czech crowns, with the first phase valued at CZK 851 million and scheduled for completion in 2027.

The development is being designed by international architectural firm Chapman Taylor, which previously worked on the W Hotel and Flow Building on Wenceslas Square and Scott.Weber offices in Holešovice. The firm’s architect, Filip Pokorný, described Habitat as a contemporary residential neighborhood that will reflect current trends in urban housing and sustainability.

The first construction phase will include 125 apartments and six non-residential units. A variety of layouts will be available, including mostly 2+kk and 3+kk units, with some smaller 1+kk and larger 4+kk apartments on upper floors. Each unit will feature a private balcony, terrace, or loggia. The development will also offer underground storage spaces, a stroller and bicycle room, and 135 garage parking spaces.

Designed with environmental considerations, the buildings will incorporate photovoltaic panels expected to generate up to 31 MWh of electricity annually. Other sustainable features include greywater recycling systems and technology to reduce potable water consumption. Outdoor spaces will include green areas, a bike path, playgrounds, a community garden, and gazebos to promote leisure and social interaction.

Habitat is one of several residential projects Skanska is currently developing in Prague. These include ongoing or planned phases at Modřanský cukrovar, Albatros Kbely, and Emil Kolben in Vysočany, as well as new buildings on the site of the Michelin Bakery and a timber structure in Radlice. Since entering the Czech market in 1997, Skanska Residential has built more than 9,000 apartments in the capital.

According to a joint market analysis by Skanska Residential, Trigema, and Central Group, apartment sales in Prague reached 2,550 units in the first quarter of 2025, marking a 60% year-on-year increase and the highest Q1 result in 15 years. Average listed prices rose to CZK 167,947 per sqm, up 10% year-on-year. Skanska reports that 60% of the units in the first phase of Habitat have already been sold ahead of completion.

EBRD Invests €76 million in VGP green bond to support sustainable logistics development in CEE

The European Bank for Reconstruction and Development (EBRD) has invested €76 million in a tap issuance of VGP’s green bond programme, increasing the total volume of the March 2025-issued €500 million senior unsecured green bonds to €576 million. Maturing in January 2031, the proceeds will support VGP’s efforts to expand its sustainable industrial and logistics real estate portfolio in Croatia, Czechia, Hungary, Romania, Serbia and the Slovak Republic.

The investment aligns with the EBRD’s strategic goals to promote green economic development and support sustainable infrastructure across its regions of operation. The allocated proceeds from the EBRD’s participation are earmarked for projects that meet EU taxonomy standards. These include assets that exceed energy performance requirements, renewable energy developments, and the acquisition of buildings that rank among the most energy-efficient in their respective markets, such as those holding an EPC A rating or falling within the top 15 per cent of national building stock.

With demand for high-quality logistics infrastructure rising in Central and South-Eastern Europe, the investment aims to address the undersupply of A-class, environmentally compliant warehouse and industrial spaces in the region.

Vlaho Kojakovic, Head of Real Estate at the EBRD, highlighted the broader significance of the investment: “VGP’s green bond programme facilitates the expansion of sustainable logistics assets in markets that require modern, energy-efficient facilities. Our support reflects the EBRD’s commitment to accelerating the decarbonisation of the real estate sector and aligns with our Real Estate Strategy 2025–29 and Green Economy Transition agenda.”

Jan Van Geet, CEO of VGP, welcomed the EBRD’s continued partnership: “This investment enables us to meet the growing demand for sustainable and efficient logistics infrastructure across key Central and Eastern European markets. We are focused on delivering buildings that meet high environmental standards and contribute to the sector’s green transition.”

VGP is a pan-European provider of logistics and semi-industrial properties focused on sustainability and high-quality real estate solutions. The EBRD, a longstanding investor in the region, has invested a total of €35.2 billion across Croatia, Czechia, Hungary, Romania, Serbia and the Slovak Republic to date.

Photo: VGP Usti nad Labem City

European Commission forecasts Poland to lead EU growth in 2025 and 2026

On 19 May 2025, the European Commission released its Spring Economic Forecasts, projecting that Poland will experience real GDP growth of 3.3% in 2025 and 3.0% in 2026, following a 2.9% increase in 2024. These figures position Poland as the fastest-growing large economy in the European Union. The Commission attributes the projected growth to a continued expansion in private consumption and a strong rebound in investment activity, though the contribution of net exports is expected to remain negative.

The updated forecasts represent a downward revision from the Commission’s November 2024 outlook, lowering the GDP growth forecast by 0.3 percentage points for 2025 and 0.1 points for 2026. The European Commission’s projections are also slightly more conservative than those issued by Poland’s Ministry of Finance, which forecast growth of 3.7% in 2025 and 3.5% in 2026. One contributing factor to this adjustment is the anticipated impact of U.S. trade policy on global demand.

Private consumption is projected to rise by 3.4% in 2025 and 2.8% in 2026, supported by continued real wage increases and easing inflation. Investment is forecast to grow strongly, up by 6.9% in 2025 and 5.3% in 2026, following a decline in 2024. The increase is expected to be supported by EU funding. Net exports, however, are projected to subtract 0.6 percentage points from growth in 2025 and 0.2 points in 2026, as improved domestic demand drives higher imports while exports remain subdued due to sluggish external markets.

Inflation in Poland, measured by the Harmonised Index of Consumer Prices (HICP), is expected to average 3.6% in 2025 and decline to 2.8% in 2026. Core inflation is projected at 3.2% in 2025 and 2.9% the following year. In the labour market, unemployment is forecast to remain low at 2.8% through 2025 and 2026—well below the EU average. Employment is expected to rise modestly, with labour costs increasing at a slower pace than in 2024.

The Commission highlights several risks to the forecast, including trade tensions, possible delays in public investment implementation, and stronger-than-anticipated private consumption.

On fiscal matters, the European Commission estimates Poland’s general government deficit will reach 6.4% of GDP in 2025 and 6.1% in 2026. High defence spending continues to weigh heavily on public finances. The slight reduction in the deficit in 2026 is attributed to consolidation measures outlined in Poland’s Medium-Term Budget and Construction Plan for 2025–2028. Additional fiscal consolidation measures are expected to be addressed in the 2026 Budget Act.

Public debt is projected to rise from 55.3% of GDP in 2024 to 58.0% in 2025 and 65.3% in 2026, driven primarily by continued defence expenditures.

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