Higher Carbon Prices Could Strengthen Green-Sector Productivity

Higher carbon prices could have economic effects extending beyond reducing emissions, potentially accelerating the development of skills and productivity in climate-friendly industries, according to a model analysis by the German Institute for Economic Research (DIW Berlin).

The research challenges the idea that carbon pricing should be assessed mainly through the immediate costs it imposes on businesses and households. DIW’s analysis suggests that increasing the cost of emissions can gradually redirect employment towards lower-carbon activities, allowing workers and companies to accumulate experience with new technologies and production methods.

As employment shifts, knowledge and expertise develop within these sectors. According to the model, this learning process can improve productivity over time and potentially strengthen the economic foundations of the transition towards lower-carbon production.

“The concern that higher CO2 prices primarily burden the economy falls short,” said Sonja Dobkowitz, researcher in DIW Berlin’s macroeconomics department. She argues that focusing exclusively on immediate costs overlooks the knowledge and experience generated as workers move into emerging industries.

The study is based on a model using US data, although DIW says the underlying economic mechanism can also be applied to economies such as Germany. Germany does not operate solely through a conventional carbon tax, with carbon costs also established through emissions trading. From an economic perspective, the researchers argue that the important factor is that emissions carry a financial cost capable of influencing investment and production decisions.

The findings are particularly relevant as European governments face competing demands on public finances. Decarbonisation requires substantial investment while governments simultaneously need to support economic activity, maintain public services and manage pressure on household incomes.

Carbon pricing provides governments with revenue while also influencing where economic activity takes place. However, it creates a complicated fiscal relationship because successful climate policy progressively reduces the emissions from which that revenue is generated.

Higher carbon costs can also initially move workers from established industries into greener sectors where productivity may be lower during their early development. This can temporarily reduce wages and taxable labour income.

DIW’s modelling nevertheless suggests that these disadvantages can eventually be outweighed by productivity improvements generated through experience. As more employees work with climate-friendly technologies, their knowledge grows and businesses become better at applying those technologies efficiently.

This leads the researchers to a notable conclusion: an economically appropriate carbon price could potentially be higher than a level calculated solely according to the estimated social damage caused by emissions. Carbon pricing would then serve two purposes, discouraging pollution while accelerating the accumulation of skills required by a lower-carbon economy.

The way governments use the resulting revenue becomes important. DIW argues that additional carbon-related income should be used partly to reduce taxes on employment.

Lower income taxation could increase employees’ take-home pay and strengthen incentives to work, helping offset some of the economic burden created by higher carbon costs. The approach would effectively shift part of the tax burden away from employment and towards activities associated with emissions.

Such a strategy could have implications for investment across the economy. Higher carbon costs would strengthen the financial incentive for companies to improve energy efficiency, electrify processes and invest in cleaner technology, while lower taxation of labour could partly reduce the cost pressure associated with employment.

For real estate, the same economic logic could reinforce investment in energy-efficient buildings. As the cost attached to fossil-energy consumption rises, inefficient properties become comparatively more expensive to operate, strengthening the business case for renovation, improved heating systems and lower-energy new construction.

The effect could become increasingly visible in asset valuations and occupier decisions. Buildings requiring substantial energy expenditure may face higher operating costs, while properties capable of functioning with lower emissions could gain an advantage as carbon pricing becomes more influential.

However, the DIW analysis has important limitations. Its model represents an average household and therefore does not measure how higher carbon prices affect different income groups.

This matters because energy and transport expenditure generally consume a larger proportion of lower-income household budgets. DIW consequently acknowledges that stronger carbon pricing would need to be accompanied by targeted measures protecting households disproportionately affected by higher costs.

The model also does not capture every possible response from industry. In particular, it does not incorporate the possibility that energy-intensive manufacturers could move production abroad when faced with significantly higher domestic carbon costs.

That risk is especially relevant for European industries competing with producers operating in countries with less demanding environmental policies. If production simply moves elsewhere, part of the intended environmental benefit can be lost while domestic employment and investment are weakened.

The findings therefore do not imply that increasing carbon prices automatically improves economic performance. The outcome depends partly on how the wider tax system, household support and industrial policy respond.

The broader argument is nevertheless significant for Europe’s transition. Climate policy is frequently discussed as a trade-off in which governments accept near-term economic costs in exchange for lower future emissions. DIW’s research suggests that this interpretation may overlook an additional economic benefit.

If carbon pricing encourages workers, businesses and investment to move towards emerging technologies, the transition itself can create expertise. Over time, that accumulated knowledge can make low-carbon industries more productive and potentially more competitive.

The debate over carbon prices consequently extends beyond determining how expensive emissions should become. It also concerns how governments recycle the revenue and whether economic policy allows the skills generated during the transition to translate into higher productivity.

From this perspective, keeping carbon prices artificially low may reduce immediate pressure on companies and households but could also slow investment and learning in industries expected to become increasingly important to Europe’s economy.

DIW’s analysis therefore presents carbon pricing not simply as an environmental charge, but as a potential mechanism for influencing where future productivity develops. The challenge for policymakers is ensuring that the transition encourages investment and expertise without placing disproportionate costs on vulnerable households or undermining the international competitiveness of European industry.

Europe’s Health Data Overhaul Opens New Frontiers for AI and Life Sciences Investment

Europe is preparing for a major change in how health information can be accessed and reused, creating a regulated cross-border framework that could increase the strategic importance of medical datasets while supporting investment in artificial intelligence, pharmaceuticals, diagnostics and digital healthcare. The European Health Data Space, or EHDS, entered into force on 26 March 2025 and is the EU’s first common data space dedicated to a specific sector. Its objectives extend beyond allowing patients and healthcare professionals to exchange medical information more easily between countries. The system will also establish a framework through which health data can be reused for approved research, innovation, regulatory and public-policy purposes.

The implications could be substantial for Europe’s life sciences industry. Pharmaceutical companies, biotechnology businesses, universities, hospitals and technology companies increasingly depend on large and diverse datasets to develop medicines, diagnostics and digital health products. Artificial intelligence is accelerating that requirement because the performance of many healthcare AI systems depends heavily on the quantity, diversity and quality of the information available for training and testing.

Europe already possesses enormous quantities of health information, but much of it sits within separate national healthcare systems, hospitals, laboratories, research institutions and incompatible digital platforms. The commercial and scientific challenge has therefore been less about whether the data exists and more about whether sufficiently large and useful datasets can legally and technically be accessed. The EHDS is intended to reduce some of that fragmentation. Researchers will eventually have a clearer system for identifying available datasets and applying to use them across Europe, potentially making it easier to undertake research involving populations and medical information from multiple countries rather than negotiating access separately with individual institutions.

However, the new framework should not be interpreted as opening European patient information freely to commercial organisations. Access for secondary purposes will be controlled by designated health data access bodies, with applicants required to demonstrate an authorised purpose and obtain permission. Processing will take place within secure environments, and personal information cannot simply be downloaded and transferred into corporate databases.

Where anonymised information is sufficient, applicants will receive anonymised data. Access to pseudonymised information will be possible where anonymisation would prevent the legitimate purpose from being achieved, but attempts to identify the individuals behind that information will be prohibited. People will also generally have the ability to opt out of secondary use, subject to limited public-interest exceptions and safeguards.

There are also clear restrictions on how information obtained through the system can be used. The framework prohibits applications including advertising and marketing and using health information to make decisions detrimental to particular individuals. This distinction is important because the economic potential of the EHDS depends partly on maintaining public confidence that greater availability for medical research does not become unrestricted commercial exploitation of patient information.

Implementation will consequently be gradual rather than immediate. The European Commission is expected to adopt important implementing measures by March 2027. The main secondary-use provisions covering most categories, including information from electronic health records, are scheduled to apply from March 2029. Remaining categories, including genomic data, follow from March 2031. Third countries and international organisations will be able to seek participation in the HealthData@EU infrastructure from 2035.

The lengthy implementation period provides businesses and research institutions with time to reconsider an increasingly important question: who controls the economic value created from health data? Historically, collaboration agreements between pharmaceutical companies, universities, hospitals and research organisations have concentrated heavily on conventional intellectual property. Negotiations typically addressed ownership of inventions, patents, licensing arrangements and the distribution of revenue from successful products.

Artificial intelligence is beginning to alter that balance. A dataset generated during one research programme may subsequently have value far beyond the original project. It could potentially contribute to another drug-development programme, assist in identifying biomarkers, support diagnostic research or be used to train and validate an algorithm. The value may therefore lie not only in the intellectual property produced during the original collaboration but also in the continuing ability to access and use the underlying information.

This creates potentially complicated commercial questions. A hospital might provide patient information, a university could contribute medical research, and a technology company could provide computing infrastructure and AI expertise. The resulting model, algorithm or dataset may then become commercially valuable in ways that were difficult to anticipate when the original collaboration was established.

Agreements drafted before AI became a major component of medical research may not clearly determine who can use information for model training, whether derived datasets can be commercialised, who controls trained models or how value created through subsequent applications should be distributed. This does not mean existing agreements automatically need to be renegotiated because of the EHDS. It does mean that data access, permitted uses, governance, derived information and AI outputs are likely to become considerably more important during future negotiations.

The changes are occurring alongside a broader attempt to improve Europe’s position in data-driven healthcare. Regulators are considering not only privacy but also whether Europe’s legal environment allows technologies including AI, genomics, biotechnology, synthetic data and advanced digital healthcare applications to develop effectively. The challenge is to create sufficient access to information for innovation without weakening protections surrounding highly sensitive medical data.

There could eventually be implications for physical investment as well. The EHDS itself does not automatically create demand for laboratories, hospitals or data centres. However, making health information more usable for research could strengthen the wider ecosystem supporting pharmaceutical R&D, biotechnology, medical technology and healthcare AI.

Processing sensitive medical information at scale requires computing capacity as well as sophisticated cybersecurity, storage and data-management systems. As AI becomes more deeply integrated into life sciences, the relationship between physical research infrastructure and digital infrastructure is therefore likely to become increasingly important. Laboratories generate biological and clinical information, hospitals generate medical records and imaging data, and computing infrastructure processes that information into research results, predictive models and potential treatments.

For property and infrastructure investors, this does not yet translate into a measurable EHDS-driven real estate market. It does, however, reinforce the longer-term convergence between life sciences real estate, healthcare infrastructure and high-security computing capacity. Research clusters containing universities, hospitals, laboratories, pharmaceutical businesses and technology companies could be particularly well positioned. Their competitive advantage increasingly depends not simply on providing laboratory space but on connecting researchers with computing resources, clinical expertise, data infrastructure and specialist talent.

The more fundamental change may be how health information itself is valued. For decades, pharmaceutical and biotechnology investment has largely been organised around intellectual property created through scientific research. AI is adding another layer in which access to sufficiently large, reliable and legally usable datasets can itself become a competitive advantage.

Europe’s challenge is to unlock some of that value without weakening the privacy protections surrounding highly sensitive medical information. The EHDS attempts to resolve that tension through controlled access rather than unrestricted data circulation. If implementation works as intended, researchers and companies should eventually be able to identify and use European health datasets more efficiently while patients retain stronger rights over their information. If the system becomes excessively complicated, costly or fragmented between national authorities, some of the intended innovation benefits could prove harder to realise.

The next several years will therefore be crucial. Member states must establish the necessary governance and technical infrastructure, organisations holding health information will have to prepare for new responsibilities, and businesses will need to reconsider how data rights are treated within research and commercial partnerships.

For Europe’s life sciences sector, the significance extends beyond regulatory compliance. As medical innovation becomes increasingly dependent on the combination of biological science, artificial intelligence and large-scale computing, access to high-quality data is becoming part of the infrastructure required to compete.

The EHDS is an attempt to build that infrastructure at European scale. Its success will ultimately be measured not simply by how much information becomes technically accessible, but by whether Europe can convert its vast health-data resources into better research, stronger life sciences innovation and new investment while retaining the trust of the people whose medical information makes that progress possible.

Source: CMS and CIJ.World Research & Analysis Team

Scarcity of Large Rental Portfolios Pushes Czech Residential Property Further Into the Investment Mainstream

Institutional rental housing is taking a more prominent position in the Czech investment market as investors compete for a limited pool of large residential portfolios and increasingly look to new development as an alternative way of building exposure to the sector. The shift was particularly visible during the first half of 2026. Savills recorded almost €1.14 billion of Czech commercial property transactions during the period, with residential emerging as the country’s second-largest investment segment. The consultancy’s total differs from estimates produced by some other major property advisers because of differences in transaction coverage and methodology, but market reports broadly point to residential property playing an unusually important role in this year’s investment activity.

The transaction that changed the balance was Wood & Company’s acquisition of a portfolio of 760 rental apartments in Prague’s Písnice district. The properties are spread across 16 residential buildings and were acquired through the investment firm’s real estate fund. According to Savills, the Písnice acquisition was also the largest Czech real estate investment transaction across all property sectors in the first half of the year and helped residential record its strongest quarterly investment result since 2020.

The significance of the deal extends beyond its size. It illustrates one of the structural characteristics of the Czech residential investment market: genuinely large portfolios of existing rental apartments rarely become available. Unlike offices, shopping centres or logistics parks, where institutional assets are regularly brought to market, much of the Czech housing stock remains fragmented between individual owners. Large blocks of professionally managed apartments suitable for institutional acquisition therefore represent a comparatively scarce product.

Part of the existing institutional stock has unusual historical origins. Large residential portfolios were originally accumulated by state-owned industrial enterprises that provided accommodation for their employees. Following economic restructuring and privatisation, some of these housing portfolios eventually moved into private ownership. Among the most prominent examples was the approximately 42,500-unit former OKD housing portfolio in northern Moravia. Other portfolios originated with major industrial businesses including ČEZ, Třinecké železárny and Chemopetrol. Savills argues that the relatively small number of such large portfolios remaining in the market contributes to their attractiveness when they become available.

The shortage is gradually changing how institutional capital enters Czech housing. Rather than waiting for existing portfolios to be offered for sale, funds and other long-term investors are increasingly acquiring newly developed residential projects, including transactions agreed while schemes are still under construction. Once completed, the apartments can be operated directly by the investor or through specialist residential management companies.

This approach is contributing to the expansion of professionally managed rental housing, particularly in Prague. Projects involving institutional owners now include developments backed by REICO, Mint Living, Heimstaden, Invesco and insurance and banking-related investment vehicles, alongside rental platforms such as AFI Home and XPlace. Savills also identifies Fragment and Lihovar Smíchov among projects contributing to the expanding institutional market.

The development pipeline suggests that this segment will become considerably more visible. Savills has estimated that more than 1,100 institutional rental apartments could be completed in Prague during 2026, with approximately 1,900 units under construction and a further 3,400 expected to enter construction. This pipeline is gradually creating the scale required for residential property to become a more established component of institutional investment portfolios.

Underlying housing-market conditions help explain investor interest. Prague combines relatively limited residential construction with persistent demand generated by employment, education, household formation and migration. At the same time, high purchase prices and financing costs mean that part of the population is remaining in rented accommodation for longer, supporting demand for professionally managed rental housing.

This creates a different investment profile from some conventional commercial assets. Demand for individual offices or retail units can change substantially with the business cycle, while residential demand is supported by the continuing requirement for housing. That does not eliminate investment risk. Rental affordability, financing costs, regulation, operating expenses and development pricing remain important considerations, but residential portfolios can provide relatively diversified income across hundreds of individual tenants.

Earlier market analysis illustrates how residential’s position has already been changing. Rental housing accounted for only a small proportion of Czech commercial real estate investment during much of the period between 2017 and 2022, apart from the exceptional 2020 sale of the former OKD portfolio. By 2023, however, residential investment had reached approximately €167 million and represented around 13% of total property investment.

The Písnice transaction demonstrates how quickly those figures can move when a genuinely large portfolio becomes available. It also highlights a potential constraint on future investment volumes. Investor appetite alone cannot produce transactions if suitable portfolios are unavailable. The relatively limited stock of large stabilised rental assets means growth increasingly depends upon new projects being developed specifically for long-term rental ownership or developers selling multiple apartments and entire schemes to institutional buyers.

That could gradually change the relationship between residential developers and investment funds. Instead of relying exclusively on individual apartment sales, developers can potentially secure institutional buyers for complete projects or substantial phases, providing an alternative exit route and reducing sales exposure during construction.

For investors, scale brings another advantage. Hundreds of apartments concentrated within one development can be operated more efficiently than geographically dispersed individual units, allowing leasing, maintenance, tenant services and property management to be organised through a single platform. This operational efficiency is one of the factors supporting the institutionalisation of rental housing across Prague and, increasingly, other Czech cities.

The attraction nevertheless depends on pricing. Residential assets must compete for capital with offices, logistics, retail and hotels, while investors also have access to bonds and other financial instruments. Institutional rental housing therefore needs to provide an acceptable combination of income stability, rental growth and long-term capital appreciation rather than relying simply on the assumption that housing demand will remain strong.

Czech investment conditions remain broadly supportive. Although 2026 transaction volumes are below the exceptional levels recorded during 2025, market advisers continue to report healthy investor appetite. Domestic capital remains particularly important and its ability to undertake larger transactions reduces dependence on international investment cycles, giving residential sellers a wider potential buyer pool when sizeable assets become available.

For institutional rental housing, however, the principal challenge may increasingly be finding enough product. The Czech market has moved beyond the stage where professionally managed rental housing is an experimental property category. Established investment funds, insurers and specialist residential platforms are already participating, while the development pipeline is creating a larger stock of purpose-built rental accommodation.

The next stage is therefore likely to be determined less by whether investors want Czech rental housing and more by whether developers and existing owners can produce portfolios of sufficient scale and quality for them to buy. The 760 apartments in Písnice provide an unusually clear example. One transaction was large enough to materially change the sector composition of Czech property investment during the first half of 2026. In a market where portfolios of that size remain scarce, future opportunities are likely to attract similarly strong attention from institutional capital.

Source: Savills

Generation Z Pushes for Higher Pay as Time and Flexibility Reshape Job Choices in Poland

Poland’s youngest employees are approaching the labour market with a combination of caution and ambition, with almost seven in ten planning some form of action to increase their income over the coming year, according to the latest Polish Labour Market Barometer from Personnel Service.

The findings suggest that Generation Z is not necessarily expecting economic conditions to improve on their own. Instead, younger workers appear increasingly prepared to negotiate higher salaries, move to better-paid positions or supplement their income with additional work.

Among respondents aged 18 to 24, 35% described their current professional situation as good and another 9% as very good. A further 41% regarded their position as neither particularly positive nor negative. Despite this relatively stable assessment of current conditions, expectations for the coming year are considerably more restrained.

Only 15% expect their professional situation to improve over the next 12 months, compared with 17% anticipating deterioration. Almost half, at 48%, expect little significant change. The figures indicate a generation entering the labour market without particularly strong expectations that improving economic conditions will automatically translate into better career prospects.

Instead, younger workers are looking for ways to improve their position themselves. Some 28% intend to ask their existing employer for a pay rise, while 26% plan to search for a better-paid job and 15% expect to take additional employment. Taken together, the survey indicates that close to seven in ten are considering at least one route towards increasing their earnings.

Salary dissatisfaction provides part of the explanation. Around 39% believe their current remuneration does not properly reflect their responsibilities, although 56% consider their pay broadly or fully appropriate for the work they perform.

The findings also challenge the idea that younger employees make employment decisions predominantly around salary. Higher remuneration remains the strongest incentive to change employer, cited by 52% of respondents, but commuting has emerged as an important consideration.

A shorter journey to work was identified by 43% as something that could encourage them to change employer, making it the second most frequently cited factor. Better overall working conditions followed at 39%.

The significance attached to commuting indicates that younger employees increasingly calculate the cost of employment in terms of time as well as money. A position offering a slightly higher salary may become less attractive if it requires substantially longer daily travel, while an employer closer to home can effectively return several hours of personal time each week.

This has implications for companies deciding where to locate offices and other workplaces. Accessibility by public transport, proximity to residential districts and the availability of services around a workplace can become part of an employer’s recruitment proposition, particularly when companies are competing for younger employees.

“For years, Generation Z has been discussed mainly in terms of work-life balance, but behind this is an increasingly practical calculation,” said Krzysztof Inglot, labour market expert and founder of Personnel Service. He argues that younger employees increasingly assess employment according to the combination of earnings, commuting time and its effect on everyday life.

Flexibility is another important part of that calculation, although the survey indicates that Generation Z does not equate flexibility exclusively with working from home. Flexible working hours were preferred by 52% of younger respondents, while 33% identified additional days off and the same proportion favoured a shorter working week. Remote working on selected days was preferred by 26%.

The results suggest that employers seeking younger workers may need to think beyond the traditional competition between office-based and remote employment. Control over when work is performed can be as important as control over where it takes place.

Generation Z also appears willing to invest in improving its position. According to Personnel Service, 67% of young respondents intend to acquire new skills during the coming year. This is particularly significant at a time when technological change, including the increasing adoption of artificial intelligence and automation, is altering the skills required across many occupations.

The combination of skills development and willingness to change employers could increase competition for younger workers with sought-after qualifications. Companies unable to provide salary progression, development opportunities or flexible working conditions may find retention increasingly difficult even if employment conditions remain generally stable.

The findings also carry implications for commercial real estate. If commuting time becomes a more important consideration in employment decisions, workplace accessibility could have a greater influence on occupier strategies. Offices located close to public transport, residential areas and everyday amenities may provide employers with an additional recruitment advantage.

At the same time, demand for flexibility could continue to influence workplace design. Rather than eliminating the office, younger employees’ preferences could strengthen demand for workplaces that are easier to reach and provide greater flexibility around when employees use them.

Personnel Service’s findings are based on a survey conducted through the Ariadna nationwide research panel between 29 January and 3 February 2026. The employee sample comprised 1,089 people working under different forms of employment or operating their own businesses.

The results present a more nuanced picture of Generation Z than the frequently repeated assumption that younger people are less committed to work. They indicate instead that younger employees are actively evaluating the economic and personal return they receive from employment.

For employers, salary remains fundamental, but it is increasingly only one component of the employment proposition. Commuting time, flexibility, working conditions and opportunities to acquire new skills are becoming part of the same calculation. In a labour market where younger workers are prepared to negotiate or move rather than simply wait for conditions to improve, employers may increasingly have to compete not only for employees’ skills, but also for their time.

Booking Design Is Becoming a Legal Risk as EU Travel Rules Catch Up With Digital Platforms

fletcher@cijeurope.com
19 August 2026
CIJ - Spotlight, Hospitality, Transportation

The way Europeans book holidays has changed faster than the legal categories traditionally used by the travel industry. Flights, accommodation, transfers and activities can now be combined within a single online journey, even when several different businesses ultimately provide the services. EU lawmakers are responding by making the structure of the customer journey increasingly important in determining who carries responsibility when something goes wrong.

The revised Package Travel Directive was formally adopted in 2026 and updates rules originally designed for a market dominated by conventional tour operators and high-street travel agents. Member states must transpose the new requirements by September 2028, with national rules applying from March 2029.

For travel businesses, the significance extends well beyond their legal departments. Under the new framework, the description a company gives itself does not necessarily determine its obligations. Calling a platform an intermediary or presenting individual elements of a trip as separate contracts will not by itself prevent the overall transaction from being treated as a package where the legal conditions are met.

That places increasing importance on what the customer actually sees and is encouraged to do. A traveller may begin by booking a flight and then be offered a hotel, transfer or excursion within the same interface. From the customer’s perspective, the services can appear to form part of one connected journey even though different providers sit behind them.

Where a business encourages the customer to buy another category of travel service for the same trip, bookings made within 24 hours at the same point of sale can fall within the package regime in certain circumstances. If the combination does not otherwise qualify as a package, the trader must clearly tell the customer that the services are being purchased separately and that package-travel protection will not apply. Failure to provide that information can affect the legal classification of the transaction.

This means decisions traditionally treated as marketing or product-development choices can carry regulatory consequences. Product teams determine where accommodation offers appear during the booking process, marketing departments decide whether to cross-sell airport transfers or activities, and designers determine whether additional services look like part of one transaction or entirely separate purchases. Those decisions can influence whether a platform is eventually regarded as the organiser of a package.

For online travel agencies and other booking platforms, this creates a different compliance challenge from simply reviewing contracts. Legal exposure can begin while the customer journey is still being designed.

The same issue is increasingly relevant to hotel operators. Hotels are trying to sell more directly to guests rather than relying entirely on third-party booking platforms. Their websites may combine accommodation with airport transfers, spa treatments, excursions, car hire, event tickets or other services. The more integrated these products become, the more carefully operators need to consider whether they are simply selling accommodation or creating a regulated travel package.

Serviced-apartment operators, resorts and hospitality groups developing their own digital booking ecosystems face similar questions. This does not mean every combination of accommodation and another service automatically becomes a package, as classification depends on how the transaction is structured and presented. It does mean, however, that booking architecture increasingly needs to form part of compliance analysis rather than being treated purely as a commercial tool.

The reform also simplifies an area that had become difficult for companies and consumers. The separate concept of linked travel arrangements is being removed after EU lawmakers concluded that it had added complexity while providing limited additional protection. Instead, the revised rules place greater emphasis on clearer distinctions between packages and stand-alone bookings and on informing travellers when package protection does not apply.

The changes were shaped heavily by the experience of the pandemic. COVID-19 exposed weaknesses in refund systems when millions of journeys were cancelled simultaneously and travel companies themselves experienced severe liquidity pressure. The failure of major operators had already highlighted vulnerabilities around insolvency protection, making financial protection another important part of the regulatory review.

The revised framework therefore strengthens several areas alongside the definition of a package. Refunds following qualifying cancellations generally remain subject to a 14-day deadline. Vouchers can be offered as an alternative, but customers must be able to reject them and receive money instead. The framework also introduces clearer requirements covering voucher validity, transferability, consumer information and insolvency protection.

Complaint handling is becoming more structured as well. Organisers will be required to acknowledge complaints within seven days and provide a reasoned response within 60 days. For consumers, the broader objective is to make it easier to understand who is responsible for a journey and what protections apply when several travel services are purchased together.

For companies, however, the implications are more complicated. A platform designed to make booking effortless can unintentionally make separate products appear to the customer as a single travel product. The commercial objective of reducing friction in the purchasing process can therefore increase regulatory exposure.

This creates a growing tension within digital travel. Businesses want seamless booking journeys because customers are more likely to purchase additional services when the process is simple. But the more seamless that journey becomes, the more difficult it can become to argue that every component was entirely separate from the customer’s perspective.

Package-travel compliance is consequently becoming less of a final legal review and more of a product-governance issue. Companies may need legal and compliance teams involved earlier when new booking functions are developed, particularly where customer data are transferred between providers, users are prompted to add services or several travel products are presented within one transaction flow.

Marketing can also influence the outcome. A platform describing an experience as a complete holiday or presenting several components as one combined offer may create a different regulatory position from a business that clearly separates each booking and explains the protections applying to each service.

The implications extend into the hospitality industry as operators invest more heavily in direct digital relationships with customers. Hotels have spent years attempting to reduce their dependence on large online travel agencies by improving direct-booking platforms, loyalty programmes and ancillary-service sales. Those strategies can generate higher margins and provide better access to customer data, but they can also bring additional responsibilities when the hotel begins to provide something broader than accommodation.

This does not undermine the commercial logic of direct selling. Instead, it changes the regulatory considerations surrounding it. Hotel groups, resorts and serviced-apartment operators may increasingly need to examine their digital distribution strategies not only from the perspective of conversion rates and revenue but also according to how customers perceive the overall product they are purchasing.

The wider lesson extends beyond travel. European regulation is increasingly examining how digital business models function in practice rather than relying exclusively on contractual descriptions of individual participants. User-interface design, data flows, commercial relationships and customer perception can all contribute to determining where responsibility sits.

Travel provides a particularly clear example because the industry has moved rapidly from conventional packaged holidays towards digital ecosystems combining services supplied by multiple businesses. The technology has made those boundaries increasingly invisible to consumers, while regulation is attempting to make responsibility clearer.

For online travel platforms and hospitality operators, the regulatory question is therefore changing. It is no longer enough to determine what a company calls itself in a contract. Businesses increasingly need to consider what customers reasonably understand themselves to be purchasing as they move through the booking process.

That makes the revised EU package-travel framework not simply a change in travel law, but an increasingly important issue for technology, product development, digital distribution and the wider European hospitality industry.

Source: CMS

Polish Mortgage Demand Rises 22% as Average Loan Request Reaches Record PLN 538,500

Demand for housing finance in Poland remained substantially above last year’s level in July 2026, with the value of mortgage enquiries submitted to banks and credit unions increasing by 22% year on year, according to the latest BIK Housing Loan Demand Index.

The increase was supported by both a larger number of prospective borrowers and higher amounts being requested. The number of people applying for housing loans was 11.6% higher than in July 2025, although activity eased slightly compared with June, with the number of applicants falling by 2.1% month on month.

At the same time, borrowers continued to seek larger loans. The average amount requested reached PLN 538,500 in July, setting another record. This was 9.3% higher than a year earlier and 2% above the June level.

The combination of more applicants and larger financing requirements explains much of the annual increase in BIK’s demand indicator. It also suggests that Poland’s mortgage market continues to recover from the weaker financing environment experienced when high borrowing costs significantly reduced household purchasing capacity.

The figures need to be interpreted carefully, however. The BIK index measures enquiries made by banks and SKOK credit unions in connection with individual mortgage applications. It does not represent the value of loans subsequently approved or property transactions completed.

There is also an additional factor influencing applicant numbers. BIK chief analyst Waldemar Rogowski noted that not every mortgage application relates directly to the purchase of a property on the primary or secondary market. Some applications concern borrowers who already have housing finance, meaning mortgage-market activity cannot be translated directly into residential sales volumes.

Annual growth in applicant numbers is also likely to moderate as comparisons become more demanding. Mortgage demand was already strengthening during the second half of 2025, meaning forthcoming 2026 figures will increasingly be measured against months in which borrower activity had begun recovering.

Nevertheless, the July figures provide another positive signal for Poland’s residential market. An 11.6% increase in applicants indicates that more households are exploring mortgage financing than a year earlier, while the record average requested amount points to the growing financial scale of residential purchases.

The increase in average borrowing is particularly relevant for developers. At PLN 538,500, the typical requested mortgage was almost 10% larger than a year earlier. This may reflect a combination of property prices, buyers seeking larger or higher-quality homes and greater borrowing capacity, although the BIK data alone does not establish how much each factor contributed.

For the primary residential market, improving access to mortgage finance is important because owner-occupiers have become a central source of demand. Stronger credit availability can broaden the pool of potential buyers beyond cash purchasers and investors, particularly for two- and three-bedroom apartments aimed at households buying their first home or improving their existing living conditions.

The month-on-month decline in applicant numbers nevertheless indicates that the recovery is unlikely to progress in a straight line. July produced fewer prospective borrowers than June even as the amount of financing requested increased.

This creates a more nuanced picture of the market. Mortgage demand remains considerably stronger than a year ago, but the pace of annual growth should gradually become less pronounced as the comparison base strengthens.

For developers and residential investors, the more important question will therefore be whether stronger mortgage interest continues to convert into completed transactions during the second half of 2026. If borrowing conditions remain supportive, the combination of higher household credit capacity and sustained owner-occupier demand could provide further support for new-home sales.

The July BIK figures show that Poland’s housing finance market entered the summer with considerably stronger demand than a year earlier. However, with the average requested mortgage reaching a record PLN 538,500, the recovery is increasingly being driven not only by the number of people seeking finance, but also by the growing amount each borrower needs.

Villa Bogoria moves towards completion as façade works finish in central Warsaw

Construction of Villa Bogoria in central Warsaw has reached another stage, with the building’s external façade now completed and interior works progressing ahead of planned delivery in the second half of 2026.

The residential development is being built close to Krasiński Garden, at the junction of Długa and Stare Nalewki streets. Its location places the project near several historic Warsaw landmarks, including the Royal Arsenal, Krasiński Palace and the Old Town.

The newly completed elevations have been finished in Piedra Paloma limestone sourced from Spain. The light-coloured stone has been used across the façades facing Długa and Stare Nalewki and combined with large-format windows and recessed architectural detailing. According to the project architect, Juvenes-Projekt, the selection of the façade material followed a two-year evaluation process.

Work has meanwhile moved further into the building. Contractors are installing ventilation systems with heat recovery and individual air-conditioning, which will be integrated with the apartments’ building management technology. Residents will be able to control temperature, humidity and indoor air conditions as well as lighting, windows and blinds.

The project’s wellness facilities are also approaching completion. The planned amenities include a 20-metre swimming pool, jacuzzi, Finnish sauna, steam room, cold-water pool and fitness area designed to accommodate conventional training as well as yoga and reformer Pilates.

The common areas have been designed by architect and artist Jacek Synkiewicz. The interior concept draws on geometric forms, proportions and materials associated with the architecture and design of the 1920s and 1930s, interpreted in a contemporary rather than historically reconstructed form.

Villa Bogoria forms part of the continuing development of Warsaw’s higher-end residential market, where projects in central locations increasingly combine residential space with private leisure and wellness facilities. In this case, the development also sits within a sensitive historic urban setting, making the treatment of the building’s external architecture an important element of the project.

Construction is scheduled for completion during the second half of 2026, with the investor expecting the first residents to occupy their apartments before the end of the year. STRABAG is the project’s general contractor, while MJL is responsible for investor supervision.

Panama City Retail Enters a New Phase as Consumer Spending Shifts Across the Capital

Panama City’s retail property market is entering a more mature phase in 2026, supported by economic growth, increasing tourism and expanding residential districts, while competition between shopping destinations is placing greater emphasis on location, customer traffic and the quality of the retail offer. The capital already has an extensive network of shopping centres, retail plazas and mixed-use developments. With monitored stock reaching approximately 2.02 million square metres at the end of 2025, the market is increasingly being shaped by how effectively existing properties capture consumer spending rather than by the construction of large amounts of additional space.

Despite a modest increase in inventory during 2025, overall occupancy improved. The combination suggests that the market was able to accommodate additional space without creating a corresponding rise in empty units. However, performance varies considerably between locations and property categories. Higher-quality centres generally entered 2026 in a stronger position, with vacancy among Class A properties at approximately 8% at the end of last year, compared with around 14% across Class B+ and B properties. Class A+ properties recorded vacancy of approximately 11%, illustrating that classification alone does not determine performance and that individual location and tenant composition remain critical.

Differences between parts of the metropolitan area are even more pronounced. Class A properties within the Canal Area recorded vacancy of less than 1% at the end of 2025, while availability in the eastern and northern parts of the market remained below 8%. By contrast, vacancy across Class A properties in the southwest approached 27%. Such variations make a single citywide vacancy figure increasingly less useful when assessing Panama City retail. A shopping centre serving a growing residential population can operate under very different conditions from a larger destination mall, while an older property competing against newer centres may struggle even when the wider retail market is improving.

This divergence is also visible in rents. Premium retail space can command considerably higher asking levels than secondary properties, with some top-end locations marketed at around USD 50 per square metre per month at the end of 2025. Elsewhere, rents vary significantly according to location, customer traffic, accessibility and property quality. Advertised rents do not necessarily represent the final economic terms agreed between landlords and retailers, as incentives, contributions towards store fit-outs and individually negotiated lease structures can materially change the effective occupancy cost.

The wider picture nevertheless suggests that Panama City is not experiencing widespread rental acceleration. Asking levels have remained comparatively stable in much of the market, giving retailers alternatives even as occupancy improves. This balance is placing greater pressure on landlords to demonstrate that their properties can generate sales rather than simply provide space. Retailers increasingly assess potential locations according to the number and profile of consumers they can reach, the strength of neighbouring tenants, ease of access, parking, public transport and the frequency with which customers return. A cheaper unit is not necessarily more attractive if the surrounding property cannot generate sufficient sales.

That shift is helping reshape the role of shopping centres. Large malls increasingly combine traditional retail with restaurants, entertainment, health, beauty, leisure and other services. These uses can increase the length and frequency of visits while providing consumers with experiences that cannot easily be transferred online. Supermarkets, pharmacies and everyday services have a different but equally important role, with their ability to generate frequent visits making them important components of neighbourhood and convenience-led retail, particularly in expanding residential areas.

Panama City’s continuing outward growth is strengthening this part of the market. Residential expansion towards the eastern, northern and western parts of the metropolitan area is creating additional demand for shopping and services closer to where people live. Traffic congestion reinforces the trend, as consumers who can reach a supermarket, pharmacy, restaurant or service provider close to home have less reason to travel across the city for routine purchases. This creates opportunities for smaller retail centres without requiring them to compete directly with Panama City’s major regional malls.

Destination shopping remains important. Established centres such as Albrook Mall and Multiplaza operate on a different scale, drawing consumers from across the metropolitan area as well as visitors from elsewhere in Panama and overseas. Their size, tenant mix and combination of shopping, restaurants and entertainment allow them to function as destinations rather than simply collections of stores.

Tourism is providing an additional source of spending in 2026. Panama welcomed approximately 1.76 million international visitors during the first six months of the year, around 17.4% more than during the same period of 2025. This followed a strong 2025, when international arrivals exceeded three million. Visitor expenditure is also increasing, with tourism income reaching approximately USD 3.23 billion during the first five months of 2026, around 15.3% above the corresponding period last year.

The increase has implications for Panama City because the capital serves as the principal entry point and commercial centre for many international visitors. Hotels, restaurants, entertainment venues and shopping destinations can benefit when visitors remain in the city rather than simply passing through the country. Tocumen International Airport handled approximately 11.5 million passenger movements during the first half of 2026, although much of this traffic consists of international connections and should not be treated as direct consumer demand for Panama City.

More significant for the local economy is the increasing number of connecting travellers choosing to spend time in Panama. More than 132,000 visitors used the Panama Stopover programme during the first half of 2026, an increase of around 38% year-on-year. Converting a greater proportion of connecting passengers into overnight or short-stay visitors creates additional opportunities for hotels, restaurants, entertainment and retail.

Domestic economic conditions are also providing support. Panama’s economy expanded by 4.8% year-on-year during the first quarter of 2026, with wholesale and retail trade among the activities contributing positively to growth. Hotels and restaurants, transportation, construction and property-related activities also recorded expansion. For the full year, the IMF expects economic growth of approximately 3.8%. Continued expansion combined with relatively moderate inflation provides a supportive environment for consumer spending, although household income, employment and affordability continue to influence purchasing decisions.

Panama City’s retail market therefore benefits from several different sources of demand. Domestic consumers provide the foundation, residential expansion is creating new neighbourhood catchments, and increasing international tourism provides additional spending concentrated particularly around major destinations and central locations. These factors, however, do not translate automatically into stronger performance for every property.

Older centres without a clear customer proposition face growing competition from both established destination malls and newer convenience-oriented developments. The ability to attract recognised brands, restaurants, services and leisure concepts is becoming increasingly important to maintaining customer traffic. Physical stores are also changing as retailers integrate their digital and traditional sales channels, increasingly functioning not only as places where transactions occur but also as locations where customers experience brands, collect products, return online purchases and interact with services.

The change does not eliminate the importance of physical retail. Instead, it raises the standard that successful retail property needs to meet. For landlords, active management is becoming increasingly important. Maintaining common areas, adjusting the tenant mix, introducing new concepts and responding to changing consumer behaviour can directly influence the competitiveness of a centre.

For developers, the existing scale of Panama City’s retail market argues against indiscriminate expansion. Only around 6,100 square metres was under construction within the Class A segment covered by the market survey at the end of 2025, while little significant development was recorded across most other categories. The limited pipeline suggests that new development is being approached more selectively than during previous expansion cycles.

Future projects are therefore more likely to emerge as components of mixed-use developments, neighbourhood centres serving growing residential areas or schemes addressing specific gaps in local provision rather than as another widespread generation of large shopping malls.

For investors, the same selectivity applies to acquisitions. Vacancy and asking rents provide useful indicators, but they cannot fully explain the strength of a retail property. Customer numbers, retailer sales, tenant retention, lease structures, surrounding demographics and the amount of investment required to maintain competitiveness can have a greater influence on long-term value. Properties with strong catchments, established tenants and clear reasons for consumers to visit should remain better positioned, while secondary assets facing stronger nearby competition may require investment or repositioning even if the wider market continues to improve.

The outlook for the remainder of 2026 is therefore one of gradual improvement rather than rapid expansion. Existing inventory is being absorbed, consumer activity is supported by economic growth and international visitor numbers are rising, while relatively limited new construction reduces the immediate risk of another large increase in supply. The more significant transformation is occurring within the existing retail stock.

Panama City is moving towards a market where successful properties are increasingly defined by their relationship with consumers rather than simply their size. Large destination malls, neighbourhood centres and mixed-use retail can all perform well, but each needs a clear role within the metropolitan economy. As Panama City continues to grow and consumer behaviour evolves, the next stage of its retail market is unlikely to be measured primarily by how many additional square metres are constructed, but by which properties can convert economic growth, tourism and changing residential patterns into sustainable customer traffic and retailer sales.

Czech Rental Market Cools Across Regional Cities Despite Rise in National Average

The Czech rental housing market showed signs of stabilisation in the second quarter of 2026, with rents declining across most major regional cities even as the national average edged higher. The contrasting movement suggests that rental growth is becoming increasingly dependent on individual locations rather than following a uniform national trend.

Average asking rents across the Czech Republic increased by 1.2% compared with the first quarter, reaching CZK 343 per sqm, according to Deloitte’s latest Rent Index. However, meaningful quarterly increases were concentrated in only a small number of regional markets, while rents declined in most of the country’s largest cities.

Pardubice recorded the strongest increase among regional cities, with rents rising 3.3% quarter on quarter to CZK 314 per sqm. Ostrava followed with growth of 2% to CZK 254 per sqm, while Olomouc increased by 1.4% to CZK 296 per sqm. In the Central Bohemian Region, rents moved only marginally higher, increasing 0.6% to CZK 328 per sqm.

Elsewhere, the direction was predominantly downward. Jihlava recorded the largest quarterly decline, with rents falling 3% to CZK 257 per sqm. Ústí nad Labem and Hradec Králové both registered decreases of 2.2%, bringing average rents to CZK 221 and CZK 318 per sqm respectively. Brno, the country’s second-largest city and one of its strongest residential markets, also experienced a correction, with average rents decreasing by 1.5% to CZK 390 per sqm.

Prague remained considerably more expensive than every other market, although the capital also recorded a modest decline following several quarters of increases. Average rents slipped by less than 1% to CZK 462 per sqm. The movement within Prague was far from uniform, however, demonstrating how rental trends can differ considerably even within a single city.

Prague 7 remained the capital’s most expensive district in the Deloitte data, with rents increasing 0.6% to CZK 493 per sqm. Prague 1 followed at CZK 490 per sqm after recording a 3% quarterly decline. Prague 9 moved in the opposite direction, recording one of the capital’s strongest increases, with average rents rising 3.8% to CZK 468 per sqm. Other parts of the city experienced corrections of around 2% or more.

Deloitte does not interpret the capital’s quarterly decline as evidence of a fundamental change in direction. Petr Hána, director of the company’s real estate and construction department, described the movement as a correction following a period of stronger rental growth rather than the beginning of a sustained downward trend.

The latest figures are particularly significant when viewed against the longer-term development of Czech housing costs. Since 2014, rents across the country have more than doubled, according to Deloitte. A single quarter of moderate declines in several cities therefore represents only a limited adjustment following years of substantial increases.

Differences are also emerging between property types. Apartments in prefabricated residential buildings recorded the strongest quarterly rental increase, rising 3.5%. These properties represented almost one quarter of the rental listings covered by the index. Brick-built apartments, which account for almost two-thirds of available rental properties, recorded a much smaller 0.6% increase. New apartments in development projects experienced stronger growth, with rents increasing by 2.2% quarter on quarter.

The figures suggest that affordability may increasingly be influencing tenant behaviour. After years of rising housing costs, households have become more sensitive to monthly expenditure, particularly in markets where rents have already reached high levels. At the same time, the different performance of individual cities indicates that local supply and demand conditions are becoming more important.

For residential investors, the second-quarter results illustrate the importance of looking beyond national averages. A 1.2% increase across the Czech Republic conceals significantly different conditions between individual cities, Prague districts and building categories.

Prague continues to command a substantial rental premium. At CZK 462 per sqm, its average rent is approximately 18% above Brno’s CZK 390 and more than twice the CZK 221 recorded in Ústí nad Labem. Such differences reflect variations in employment, household incomes, housing supply, population movements and local demand.

The cooling recorded across several cities does not necessarily indicate weakening underlying demand. Instead, it may represent a period in which rental prices are consolidating following substantial increases, particularly as tenants encounter limits on how much of their disposable income can be allocated to housing.

For developers and institutional rental investors, the divergence also strengthens the case for increasingly localised investment strategies. Rental growth cannot automatically be assumed even in larger cities, while markets such as Pardubice, Ostrava and Olomouc demonstrated that stronger increases can occur outside Prague and Brno.

The second quarter therefore presents a more balanced Czech rental market than the national headline initially suggests. Average rents remain historically high and increased slightly across the country, but most regional cities experienced some degree of correction. After more than a decade in which Czech rents have more than doubled, location, apartment quality and local affordability are becoming increasingly important determinants of rental performance.

Source: CTK

Pension Capital Backs Urban Partners’ Expansion into European Property Lending

Urban Partners has secured €200 million at the first closing of a new real estate credit fund, adding fresh institutional capital to Europe’s growing non-bank property financing market.

The initial fundraising has been supported by commitments from two Danish institutional pension funds. The backing provides Urban Partners with a substantial pool of capital at the beginning of the strategy and demonstrates continued institutional interest in gaining exposure to real estate through lending rather than exclusively through direct property ownership.

The timing is significant for Europe’s property market. Financing conditions have changed considerably from the period of exceptionally cheap debt, while large numbers of properties acquired or refinanced during the low-interest-rate cycle are approaching loan maturities. Banks remain important lenders, but many have become more selective about leverage, property type, development exposure and the characteristics of individual borrowers.

This has created additional room for institutional and private lenders. Real estate credit funds can provide financing for acquisitions, refinancing, development and the repositioning of existing properties, particularly where transactions require structures that do not fit traditional bank lending criteria.

For pension funds, the attraction is different from purchasing buildings directly. Property lending can provide contractual income while placing the investor higher in the capital structure than the equity owner. The investment still carries property and borrower risk, but returns are primarily generated through the financing rather than depending directly on rental growth and future asset values.

The €200 million commitment also illustrates how institutional investors are adjusting their approach to European property following the repricing of the sector. Some capital that previously might have competed for direct acquisitions can now participate as a lender, taking advantage of financing requirements created by the changed interest-rate environment.

This shift is contributing to a broader transformation of Europe’s property debt market. Banks historically dominated commercial real estate lending across much of the region, but debt funds, insurance companies and other institutional investors have progressively increased their involvement.

The refinancing cycle could accelerate that development. Properties financed several years ago may now be worth less than when their original loans were arranged, while replacement debt can be considerably more expensive. In some cases, banks may also be unwilling to refinance at the same leverage level.

That creates a financing gap which can potentially be filled by new equity, asset sales or alternative lenders. Credit funds with available capital are consequently well positioned to consider transactions involving otherwise viable properties where owners need a different financing structure.

The opportunity extends beyond refinancing. Europe’s existing building stock requires substantial investment as landlords respond to tighter environmental standards, changing occupier requirements and competition from newly developed properties. Offices in particular may require significant expenditure on energy performance, building systems and amenities to remain competitive.

Financing these programmes represents another potential source of demand for real estate credit. Investors acquiring buildings for refurbishment may require loans capable of accommodating capital expenditure and leasing risk before properties reach stabilised occupancy.

Development financing can create similar opportunities. Banks have become particularly cautious towards speculative projects in some sectors, while shortages of modern housing, logistics facilities and prime office accommodation remain visible in several European cities. Alternative lenders can potentially support projects where the underlying demand is strong but conventional financing is constrained.

Private property debt is not automatically a substitute for bank lending. Alternative financing can carry higher pricing, and lenders still need to assess property values, borrower strength, leasing assumptions and exit strategies carefully. Greater flexibility does not remove the underlying risks associated with real estate.

However, the increasing amount of institutional capital entering the sector could create greater competition between financing providers. For high-quality borrowers and assets, that may eventually narrow lending margins and provide a broader range of financing options.

The involvement of pension funds is particularly notable because of the long-term nature of their investment requirements. Property-backed lending can potentially provide predictable income that complements allocations to bonds, infrastructure, direct real estate and other private-market investments.

Urban Partners’ first close therefore represents more than another European property fundraising. It forms part of a structural change in how real estate is financed, with institutional capital increasingly operating on both sides of property transactions.

As European investment volumes recover and the refinancing requirements accumulated during the previous cycle continue to emerge, access to debt could become as important as the availability of equity in determining which transactions proceed.

The €200 million secured by Urban Partners adds another source of capital to that market. For property owners and developers, the growing presence of institutional lenders means financing options are becoming more diverse. For investors, it provides another way to participate in Europe’s property recovery without necessarily owning the buildings themselves.

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