Czech Republic sees sharpest decline in real wages across EU

Real wages in the Czech Republic have dropped by 10% since the end of 2019, marking the steepest decline among all EU countries, according to an analysis presented today by XTB chief economist Pavel Peterka. Despite a 27% nominal wage increase over the same period, high inflation has eroded purchasing power, leaving Czech workers worse off in real terms.

The Czech Republic’s accumulated wage decline outpaces all other EU nations. Italy recorded the second-largest drop, with real wages falling by 5%, while the eurozone average decline stands at just 1%. On the other hand, Bulgaria saw the highest real wage growth, with wages rising 36% since 2019.

The primary driver of this wage erosion is one of the highest inflation rates in the EU. Since 2019, Czech consumer prices have surged by 41%, trailing only Poland (42%) and Hungary (52%). However, both Poland and Hungary experienced faster nominal wage growth, cushioning the impact of inflation more effectively than the Czech Republic.

Peterka identified low labor productivity—especially in construction and agriculture—as a major barrier to wage growth. Additionally, limited workforce mobility and a reluctance among employees to change jobs have further slowed wage increases. “It is empirically proven that changing jobs results in higher wage increases than negotiating with a current employer,” Peterka noted.

The analysis predicts that nominal wages will rise by 6-7% in 2025, translating to a real increase of 3.5-4.5%. However, wages are not expected to return to pre-pandemic levels until 2026. The strongest wage growth is expected in manufacturing, healthcare, and specialized industries, where employers must boost salaries to retain skilled workers.

Despite these positive trends, risks remain. Economic stagnation in Germany, the Czech Republic’s largest trading partner, and the potential for trade wars could dampen wage growth prospects, Peterka warned.

As the Czech economy gradually recovers, rising consumer demand is expected to ease employer caution around wage increases, providing some relief to workers who have faced years of declining real earnings.

Source: CTK

WDP reports record financial results for 2024, reinforces European growth ambitions

WDP has announced its financial results for 2024, marking a historic year with exceptional financial and operational performance. The company reinforced its position as a leading European logistics real estate platform through significant investments and strategic expansions.

Strong Financial Performance

EPRA Revenues: WDP reported €333.7 million in EPRA revenues for 2024, a 15% increase compared to the previous year. This growth was fueled by pre-leasing projects, acquisitions, organic expansion (+2.6%), and an 8% rise in shares following capital consolidation.

Occupancy and Market Dynamics: As of December 31, 2024, WDP maintained a high occupancy rate of 98%. Amid rising market rents, the company successfully renegotiated contracts for 500,000 m² of gross lettable area (GLA), achieving an average rental increase of +12%. The profitability potential of the existing portfolio stands at approximately 11%.

Portfolio Revaluation and Equity Return: WDP recorded a positive portfolio revaluation of +€154.9 million (+2% YTD), including a Q4 2024 gain of +€46 million. This was driven by latent capital gains from recent projects and acquisitions. The company’s return on equity increased by 10%, reaching an EPRA NTA of €21.1 per share.

Financial Strength: With a gearing ratio of 38%, net debt/EBITDA (adjusted) of 7.2x, and €1.7 billion in undrawn credit lines, WDP remains well-positioned to pursue further investment opportunities.

Strategic Expansion and Future Growth

Towards a €10bn+ European Real Estate Platform: WDP’s high-quality and diversified portfolio now stands at €8 billion, serving as critical supply chain infrastructure. The company’s active development pipeline adds another €1.1 billion in assets. Management restructuring, including the appointment of a new Country Manager for France and a new COO, will further support its European expansion.

#BLEND2027 Targets Confirmed: WDP remains on track to achieve its earnings target of €1.70 EPRA per share by 2027, driven by its investment strategy and execution capabilities.

2025 Outlook: WDP projects EPRA earnings per share of €1.53 in 2025, reflecting a +7% increase. A dividend per share of €1.23 is estimated for 2025, payable in 2026.

Key Developments in Romania

Market Leadership in Romania: WDP holds a €1.5 billion portfolio in Romania, comprising 1.95 million m² of leasable space across 79 strategic locations.

Stake Acquisition in WDP Romania: After 15 years of successful growth, WDP acquired its Romanian partner’s 15% stake in WDP Romania. The partner remains Country Manager and will continue supporting the company’s expansion.

EIB Financing Package: WDP secured a €250 million financing package from the European Investment Bank (EIB) to fund renewable energy projects, including solar panels, batteries, and EV charging infrastructure. These investments will be implemented across Western Europe and Romania through 2027.

IFC Financing for Romania: In Q1 2024, WDP finalized a €300 million green sustainability-linked loan with IFC, a member of the World Bank Group. The loan, with a maturity of up to eight years, will finance new logistics developments in Romania, aligning with WDP’s sustainability strategy and expanding its solar power capacity.

With strong financial performance, strategic acquisitions, and sustainability-driven investments, WDP is well-positioned for continued growth and leadership in the European logistics real estate sector.

Photo: WDP Bucharest

Luxury real estate in Europe gains prominence

Premium real estate continues to serve as a robust vehicle for capital protection and high returns. Europe is increasingly becoming a prime destination for affluent buyers, surpassing traditionally popular global locations.

Market analyses reveal that luxury homes and apartments in Poland and across Europe are appreciating at a significantly faster rate than standard housing. Despite fluctuating market conditions, high-end properties in Poland experience an annual value increase of at least 10%. Luxury housing prices start at PLN 40,000 per square meter, while in the most prestigious locations, rates can exceed PLN 100,000 per square meter.

Steady Growth and Profits

Premium real estate not only retains its value but also consistently appreciates. The pool of buyers comprises seasoned investors who recognize the resilience of luxury properties against economic fluctuations and market downturns. The demand for high-end real estate in Poland continues to rise, while the supply remains limited, pushing prices upward. Investors frequently achieve gains of several dozen percent, with rental yields reaching 9-10% annually.

“There is no more profitable option than the premium real estate market,” says Katarzyna Goryszewska, Head of Walter Herz’s Luxury Residential Agency.

Compared to Western Europe, Poland’s luxury real estate prices are relatively moderate. The UK leads the European market with some of the highest property rates. In London, luxury real estate averages around €30,000 per square meter, similar to Monaco, New York, and Hong Kong. Amsterdam’s market is about half as expensive. High prices in London contribute to fewer transactions compared to more affordable cities like Paris and Madrid, where premium properties average €23,000 per square meter—comparable to Sydney.

Europe is increasingly attracting global investors at the expense of other premium real estate markets. In recent years, the continent has witnessed an influx of investors from North America and an increasing number of wealthy Asian buyers favoring European locations such as Spain, Portugal, and Italy.

Warsaw: The Hub of Poland’s Luxury Market

Poland’s premium real estate sector continues to expand, albeit at a moderated pace aligned with global trends. The luxury market, though relatively young, is valued at approximately PLN 3.5 billion. Warsaw alone accounts for 30% of Poland’s luxury real estate, with premium properties concentrated in major cities such as Gdańsk, Wrocław, Kraków, and Gdynia. Exclusive properties are also available in select resort towns.

Among Warsaw’s prominent developments is the Flare by Archicom, a 15-story luxury apartment building on Grzybowska Street, offering 76 apartments, including penthouses. Additionally, the company is constructing a high-end building at 7 Miedziana Street, featuring a cinema, fitness and SPA facilities, a club room, and a bar—part of the mixed-use Towarowa 22 complex.

Other notable projects include Serenus, a company affiliated with BBI Development, which is developing land near Ogrod Krasińskich garden and Plac Bankowy square. The exclusive Villa Bogoria, featuring 35 premium apartments, is also under construction on Długa Street, adjacent to the Royal Arsenal.

In Gdańsk, Euro Styl is launching a premium investment near Nowa Motława, with the Esencja apartment building in Dolne Miasto distinguished by its ornate facade.

Poland’s most prestigious real estate includes Warsaw’s Złota 44, Cosmopolitan towers, and Foksal Residence. Notable luxury properties in Kraków include Angel Wawel and Browar Lubicz, while Wrocław boasts the Ovo complex and Sky Tower. Sea Towers in Gdynia and Apartamenty przy Warzelni in Poznań also rank among Poland’s high-end residential developments.

A Diverse Investor Base

Premium real estate buyers in Poland include affluent individuals with Polish roots living abroad, business executives expanding into the country, and tourists who have developed a strong connection to Poland. Additionally, wealthy investors from Ukraine, Belarus, and Turkey are increasingly active in the market. Luxury rentals attract corporate managers, foreign investors, Polish entrepreneurs, and students from affluent backgrounds.

The premium market witnesses transactions involving substantial sums. Recently, a two-story, 400-square-meter apartment on Spichrzów Island in Gdańsk sold for PLN 24.8 million. Two years ago, a 700-square-meter apartment in Kraków’s Angel Wawel building sold for PLN 15 million. The Warsaw market also sees high-value deals, such as the sale of a 480-square-meter apartment on the 50th floor of Złota 44 for PLN 22.9 million, which was later resold at a profit. Another unit in the same tower was transacted for over PLN 20 million.

In Warsaw’s Żoliborz district, a luxurious residence recently sold for PLN 50 million, while a 340-square-meter apartment on Szara Street fetched PLN 20.4 million. Additionally, a high-end apartment on 18 Topiel Street was acquired for PLN 10.2 million.

With rising investor interest and a limited supply of luxury properties, Poland’s premium real estate market is poised for sustained growth.

Polish banks expect increased loan demand in Q1 2025, except for housing loans

Polish banks anticipate rising demand for all types of loans in the first quarter of 2025, except for housing loans, which are expected to see a decline, according to a survey conducted by the National Bank of Poland (NBP).

The fourth quarter of 2024 saw banks relax lending criteria for consumer loans and the SME sector, mainly due to growing competitive pressure. However, lending conditions remained largely unchanged for housing loans and large enterprises. This period was marked by a notable increase in demand for credit from both households and businesses, according to the NBP report, “The Situation on the Credit Market – Q1 2025 Survey of Credit Committee Chairs.”

For the first quarter of 2025, banks plan to further ease lending conditions for consumer loans and short-term loans for SMEs, while tightening conditions for short-term loans to large enterprises.

Banks expect an increase in demand for corporate, SME, and consumer loans, with large enterprises driving credit growth for working capital, mergers and acquisitions, and investments. The highest demand growth is anticipated among SMEs, reflecting business expansion and investment plans.

However, housing loan demand is expected to decline. While forecasts for the housing market remain positive, weaker household economic conditions and shifts in consumer spending patterns are weighing on mortgage demand.

In Q4 2024, banks reported no major changes in lending criteria for large enterprises, while SMEs saw relaxed conditions due to competitive market pressure. Despite this, some banks cited economic uncertainty and industry-specific risks as reasons for widening credit margins.

For consumer loans, banks eased credit conditions further in Q4 2024, including lowering credit margins, primarily in response to competition. This stimulated loan demand, a trend expected to continue in early 2025.

Looking ahead, the NBP survey indicates that Polish banks will maintain stable lending policies for most loan types, with the exception of tightened criteria for large enterprises and continued easing for SMEs and consumer loans. However, housing loan demand is forecasted to decline, reflecting weaker household confidence and economic headwinds.

Source: ISBnews

7R raises over PLN 150 million through green bond issuance

7R, a commercial real estate developer in Poland and the Czech Republic, has successfully raised over PLN 150 million through the issuance of green bonds, surpassing its initial target of PLN 100 million. The bond issue is part of the company’s €100 million bond program, with strong demand from institutional and selected private investors driving the increase in funding.

The funds will be allocated to the construction of more than 350,000 square meters of new facilities in 2025. All projects will adhere to stringent environmental standards, aiming for at least a BREEAM Excellent certification and exceeding local Nearly Zero Energy Building (NZEB) standards by at least 10%.

“7R has a proven track record in delivering sustainable commercial real estate, as demonstrated by our 7R Green Saver projects. The latest bond issuance will help us expand our portfolio while reinforcing our commitment to environmentally responsible development,” the company stated.

The bonds were issued under the 7R Green Finance Framework, ensuring compliance with ICMA Green Bond Principles and LMA Green Loan Principles. This guarantees full transparency and financial accountability in line with international sustainability standards.

The sole organizer of the issuance was Michael / Ström Dom Maklerski, and the bonds are set to be listed on the Catalyst market, reinforcing 7R’s commitment to sustainable financing and responsible investment practices.

7R specializes in flexible warehouse spaces across Poland and the Czech Republic, providing modern, energy-efficient logistics solutions for commercial clients. With this successful bond issuance, the company continues to expand its eco-friendly development portfolio, positioning itself as a key player in sustainable real estate in Central and Eastern Europe.

Source: ISBnews

Poland’s GDP to grow by 3.4% in 2025, slowing to 3% in 2026

Poland’s gross domestic product (GDP) is projected to grow by 3.4% in 2025, before slowing to 3% in 2026, according to the latest forecast from the Organisation for Economic Cooperation and Development (OECD). The report also predicts that consumer inflation (CPI) will reach 5% in 2025 before easing to 3.9% in 2026. Meanwhile, core inflation, which excludes food and energy prices, is expected to decline from 4.3% in 2025 to 3.5% in 2026.

The OECD’s latest projections reaffirm its December 2024 forecast, which estimated Poland’s GDP growth at 2.8% for 2024, followed by 3.4% in 2025 and 3% in 2026.

According to the OECD, Poland’s economic growth in 2025 will be driven by investment fueled by EU funds, but will slow in 2026 due to fiscal consolidation measures. At the same time, the withdrawal of government energy subsidies will slow down inflation’s return to the central bank’s target.

The report also warns of potential risks to economic stability, including rising wage growth, which could boost consumption but also increase inflationary pressures. On the geopolitical front, the ongoing war in Ukraine and any further escalation could negatively impact Poland’s economic outlook, leading to higher inflation and slower GDP growth.

“The faster-than-expected absorption of EU funds could further stimulate investment in 2025, but tight implementation deadlines and labor shortages may pose challenges,” the OECD report stated.

The OECD also predicts a decline in the household savings rate, which is expected to fall to 3.2% in 2025, down from 3.9% in 2024, and further decrease to 2.6% in 2026. This trend suggests that Polish households may increase spending amid high wage growth, but also face greater financial vulnerability if economic conditions deteriorate.

Despite solid growth projections, external factors such as inflation risks and geopolitical tensions remain key concerns for Poland’s economic stability in the coming years.

Source: OECD and ISBnews

Poland: Only 15% of companies prioritize sustainability in cost reduction strategies

Despite increasing environmental awareness, only 15% of companies prioritize sustainability as a key factor in their cost reduction strategies, according to a survey by consulting and technology firm Future Mind. The findings suggest that while businesses acknowledge the importance of ecological initiatives, they often remain secondary to financial objectives.

The survey revealed that half of companies (50%) review and adjust their cost-cutting strategies quarterly, while 21% do so only when necessary, and 12% conduct evaluations every six months. Environmental factors are considered by 26% of companies in a moderate way, meaning that while sustainability is on their agenda, financial impact remains the main driver in decision-making. Meanwhile, another 26% of firms only occasionally factor in sustainability, and 12% admit they do not consider it at all when implementing austerity measures.

One of the most significant sustainability trends identified in 2024 was investment in energy efficiency, which 26% of companies implemented last year. However, for 2025, this figure is expected to drop to 15%, signaling a decline in the emphasis on eco-friendly cost reduction initiatives. Companies that do continue to invest in this area are focusing on smart lighting systems, efficient air conditioning and ventilation, the use of renewable energy sources, and upgrading to energy-efficient equipment.

Additionally, 12% of businesses see opportunities in growing consumer demand for sustainability, while 50% are turning to data analytics to predict retail industry trends. The report indicates that cost reduction and sustainability efforts are increasingly being viewed as interlinked priorities that require simultaneous improvement.

“The data from our Retail Barometer suggests that Polish retail companies still place limited emphasis on ecological initiatives. However, businesses that monitor consumer trends and integrate sustainability with operational efficiency will gain a competitive advantage,” said Waszkowski, Head of Strategy at Future Mind. “Aligning responsible environmental practices with financial strategies can deliver long-term benefits, including cost savings and a stronger brand image.”

The Retail Barometer survey, conducted using the CAWI method, gathered insights from 34 industry experts and retail decision-makers. The study was carried out in collaboration with Wiadomości Handlowe, providing key predictions about the future direction of the retail sector in Poland.

While sustainability remains a growing concern, the survey highlights the challenges companies face in balancing ecological goals with financial constraints. As consumer expectations shift, businesses that proactively integrate green solutions into their operations may find themselves better positioned for long-term success in the evolving retail landscape.

Source: Future Mind and ISBnews

GTC sells Warsaw plot for EUR 55M and Zagreb office building for EUR 27M

GTC has finalized the sale of a prime development plot in Warsaw’s Wilanów district for €55 million and the Matrix C office building in Zagreb for €27 million, the company announced. The transactions align with GTC’s strategy to optimize its portfolio and enhance financial liquidity.

The Warsaw plot was acquired by one of Poland’s leading residential developers, with the sale price reflecting a 20% premium over its last book value. Meanwhile, the Matrix C building, part of the Matrix Office Park in Zagreb, was sold at its accounting value, generating €13 million in free cash for GTC.

“These strategic asset sales are part of our broader plan to consolidate cash reserves and increase financial flexibility,” said Gyula Nagy, President of GTC. “Our strong financial performance in the first three quarters of 2024 has provided a solid foundation, and these transactions further strengthen our market position by ensuring greater capital efficiency.”

GTC Group is a real estate investor and developer specializing in Central and Eastern Europe, with a strong presence in Poland and key capital cities across the region. The company has been listed on the Warsaw Stock Exchange (WSE) since 2004 and continues to streamline its asset portfolio, focusing on high-value investments and strategic liquidity management.

Source: GTC and ISBnews

Getinge joins Enterprise Park tenants in Kraków with new shared services center

Getinge, a provider of medical solutions for operating theatres, intensive care units, and sterilization departments, has signed a lease agreement for 1,900 square meters of office space in Enterprise Park, a modern office complex in Kraków’s Podgórze district. The shared services center, Getinge Shared Services, will operate from Building D, 3rd floor, starting March 2025.

The new Getinge Shared Services hub in Kraków will provide finance, accounting, customer service, controlling, procurement, and training coordination services for the company’s operations in Europe, the Middle East, Turkey, North America, and Australia. Additionally, it will house strategic global functions for the Getinge Group.

The decision to relocate to Enterprise Park was influenced by several key factors, including transport accessibility, high-quality office space, advanced technological solutions, and on-site amenities.

“The choice of Enterprise Park was determined by its convenient location, modern infrastructure, and additional services tailored to employees. Our company’s success is driven by the exceptional Getinge team, and we wanted to provide them with the best working conditions possible,” said Agnieszka Obuchowska, Managing Director of Getinge Shared Services.

“We are delighted to welcome another global brand to Enterprise Park. The trust of internationally recognized companies underscores the quality of our office complex. We continuously expand our facilities to meet tenant expectations, ensuring a top-tier working environment,” stated Andrzej Borówka, Head of Property Management at Avestus Real Estate in Poland.

“Enterprise Park has been home to demanding tenants for years, and Getinge’s choice reaffirms the location’s appeal. Key factors included proximity to the city center, strong transport links, available amenities, and the landlord’s flexibility,” added Maciej Dubiel, Associate Director at CBRE, which advised Getinge in the lease negotiations.

Enterprise Park is a modern Class A office complex consisting of six three-story buildings, offering over 61,878 square meters of space surrounded by green landscapes. Located in Kraków’s Podgórze district, it provides quick access to the city center, the airport, and nearby residential areas.

The complex houses several multinational tenants, including Aptiv, Aon, Cisco, Alight Solutions, and Estrata Poland, alongside local businesses such as a bilingual kindergarten (KIDS&Co.), the Krakpress convenience store, Piekarnia Gorąco Polecam bakery, and the Olimp canteen.

Enterprise Park also stands out for its strong environmental credentials, meeting BREEAM sustainability standards. It offers 1,224 parking spaces, 600 bicycle racks, and changing facilities, along with a dedicated bicycle rental system for tenants.

The architectural design of Enterprise Park was created by Baumschlager Eberle Architekci Kraków (formerly DDJM Biuro Architektoniczne), while Eiffage Polska Budownictwo served as the general contractor. Since May 2015, Enterprise Park has been owned and managed by Tristan Capital Partners and Avestus Real Estate under a joint venture agreement.

With Getinge’s arrival, Enterprise Park further strengthens its position as one of Kraków’s most sought-after business hubs, offering state-of-the-art office space, sustainability, and top-tier amenities for international companies.

Czech PM Fiala: Strengthening EU defense investments will benefit the Czech Republic

Increasing European Union (EU) investment in the defense industry will provide economic advantages for the Czech Republic, Prime Minister Petr Fiala (ODS) stated before departing for an informal summit of EU leaders in Brussels. The discussions at the summit are focused on improving access to funding for the defense sector and strengthening Europe’s security capabilities.

Fiala emphasized the importance of coordinated defense acquisitions within the EU, highlighting the recent call from 18 European leaders urging the European Investment Bank (EIB) to open up financing opportunities for private-sector defense companies. He stressed that Europe must take greater responsibility for its security, invest more in defense, and improve access to financial resources for its defense industry. He also reiterated that increasing NATO members’ defense spending beyond 2% of GDP is now “almost a necessity.” In addition, he called for simplifying joint defense procurement and enhancing EU-wide cooperation on military acquisitions, ensuring that these efforts remain fully compatible with NATO.

Fiala also outlined plans for increasing the Czech Republic’s defense budget, stating that if his current coalition remains in government, defense spending could rise from the current 2% of GDP to 3% in the next parliamentary term. Speaking on Czech Television’s “Questions of Václav Moravec”, he confirmed that in the 2025 budget, the government aims to increase defense spending to 2.1% or 2.2% of GDP, ensuring a buffer to confidently meet NATO’s minimum spending requirement.

Defense Minister Jana Černochová backed the Prime Minister’s proposal, emphasizing the need for a financial reserve to guarantee that the Czech Republic meets its defense commitments. She explained that since the Ministry of Defense cannot influence GDP growth, securing extra funding is crucial. She also noted that Fiala’s public commitment would strengthen her position in negotiations with the Ministry of Finance to secure the necessary funding.

The Brussels summit, convened by European Council President António Costa, marks a significant moment for European security policy. It is the first major EU defense meeting attended by NATO Secretary-General Mark Rutte and UK Prime Minister Keir Starmer, as well as the first summit following the election of U.S. President Donald Trump, who has previously called for NATO allies to increase defense spending to 5% of GDP. Last week, Costa hinted that NATO might adjust its defense spending targets above the current 2% level at this year’s NATO summit in The Hague.

Within Fiala’s Together coalition, key political figures have expressed support for increased defense spending. KDU-ČSL chairman Marek Výborný stated that higher defense investments should be accompanied by efforts to improve tax efficiency and introduce more progressive taxation. TOP 09 chairwoman Markéta Pekarová Adamová emphasized the importance of balancing military investments with the preservation of public services. Meanwhile, STAN leader Vít Rakušan also voiced support for the proposed defense spending increase.

In early January 2024, the Czech Ministry of Defense confirmed that the country met its NATO commitment of 2% of GDP in defense spending for 2023. However, NATO is expected to finalize its assessment of Czech defense spending utilization in the second quarter of 2024. With increasing global security concerns, the Czech Republic is aligning itself with broader European defense efforts, ensuring stronger security cooperation within the EU and NATO while reinforcing its military capabilities.