Switzerland Tightens Banking Defences as Credit Suisse Crisis Continues to Reshape Financial Regulation

More than three years after the collapse of Credit Suisse forced an emergency takeover by UBS, Switzerland is moving towards a substantially tougher system for supervising its banks. The reforms could change executive accountability, crisis management and the financial safeguards required around the country’s largest institutions.

The Federal Council launched the latest stage of its banking reforms on 12 August 2026, opening consultation on amendments to the Banking Act and Liquidity Ordinance until 19 November. The measures are intended to address weaknesses exposed by the Credit Suisse crisis and reduce the possibility that taxpayers and the wider economy would again have to absorb the consequences of a major bank failure.

Although presented within Switzerland’s “too big to fail” framework, the proposals reach further than UBS and the country’s other systemically important institutions. They would give the Swiss Financial Market Supervisory Authority, FINMA, greater scope to intervene before financial problems become critical and introduce clearer personal responsibility for senior executives at larger and more complex banks.

The changes form part of a broader regulatory overhaul rather than a standalone response. In April, the Federal Council advanced another major component of the programme requiring systemically important banks to fully cover investments in foreign subsidiaries with Common Equity Tier 1 capital. The government argues that the Credit Suisse collapse demonstrated that risks associated with overseas subsidiaries were inadequately reflected in the previous system.

That part of the reform is particularly significant for UBS, which became Switzerland’s only remaining globally significant banking group after absorbing Credit Suisse in 2023. Current estimates suggest the measures could require UBS to carry around USD 20 billion of additional capital, although the eventual regulatory outcome remains subject to the political process.

The August proposals tackle a different problem highlighted by the Credit Suisse experience: whether regulators had sufficient authority to intervene before deterioration became irreversible. Under the proposed framework, FINMA would receive stronger preventative powers rather than having to wait until a bank was approaching insolvency or had already breached regulatory requirements. It could require corrective measures when weaknesses in governance, capital, liquidity or organisation indicated growing financial risk.

This represents an important change in Swiss supervision. Instead of regulation concentrating primarily on whether an institution satisfies prescribed ratios and requirements at a particular point in time, supervisors would have greater ability to intervene when they believe emerging problems could threaten the bank’s financial position or its customers.

Executive responsibility would also become more explicit. Switzerland plans to introduce a senior managers regime for more complex banks, broadly following principles already established in the United Kingdom. Responsibilities would have to be allocated more clearly among senior executives, making it easier to identify who is accountable for particular areas of a bank’s operations.

The proposal would extend beyond systemically important banks. Institutions with at least 250 full-time-equivalent employees could come within the framework where their organisational complexity warrants it, while FINMA could potentially impose similar requirements on smaller institutions where serious governance deficiencies are identified.

Remuneration is another target. Switzerland does not propose a simple ceiling on bankers’ pay. Instead, the intention is to create a stronger connection between compensation, long-term performance and responsibility for risk. For systemically important institutions, parts of variable remuneration for relevant senior employees could be deferred and potentially reduced or recovered when subsequent losses, misconduct or management failures demonstrate that earlier rewards were unjustified.

The government is also addressing one of the central lessons of the Credit Suisse rescue: a bank can satisfy regulatory capital requirements and still encounter an acute liquidity crisis if customers and counterparties lose confidence rapidly.

The Swiss National Bank has consequently placed greater emphasis on ensuring banks have assets prepared in advance that can be pledged to central banks for emergency funding. The objective is to prevent valuable collateral becoming practically unusable during a crisis because the necessary legal, operational or technical preparations were never completed.

This distinction between capital and liquidity became especially important during the Credit Suisse crisis. A bank can possess assets whose value exceeds its liabilities while simultaneously struggling to obtain enough immediately available cash to meet withdrawals. Preparing collateral before a crisis gives the central bank greater capacity to provide liquidity when markets are under stress.

Switzerland’s four systemically important banking groups, UBS, Zürcher Kantonalbank, Raiffeisen and PostFinance, already operate under additional capital, liquidity and recovery requirements because their failure could disrupt functions considered essential to the Swiss economy, including deposits, domestic lending and payment services.

The new framework would strengthen crisis preparation further. Systemically important institutions would face more detailed recovery and resolution requirements designed to demonstrate not simply that a theoretical restructuring could take place, but that the measures could realistically be implemented during a rapidly developing crisis.

The economic debate surrounding the reforms is nevertheless becoming increasingly important. Stronger capital and liquidity requirements make banks more resilient because shareholders and bank resources provide a larger buffer before public intervention becomes necessary. However, additional capital also has an economic cost. If substantially greater amounts of equity have to support banking activities, institutions may respond by accepting lower returns, reducing particular activities or attempting to increase margins.

UBS has argued that excessive requirements could weaken its ability to compete internationally. The Swiss Bankers Association has also questioned the breadth of parts of the government’s proposals and the extent of the additional authority being considered for FINMA.

The government and Swiss National Bank take a different position. The SNB supports the central capital proposal and considers UBS capable of meeting the requirements, pointing to the bank’s existing capital position and earnings capacity.

For Switzerland’s property market, however, it is important to distinguish the political argument over UBS from the likely impact on domestic lending. The Federal Council argues that the additional capital requirement for foreign subsidiaries should not increase the cost of Swiss mortgages or domestic corporate lending because it applies to risks generated by overseas operations rather than the Swiss loan book. Under this reasoning, those additional financing costs should remain attached to the activities creating them rather than being transferred to domestic borrowers.

There is therefore no clear basis at present for concluding that the reform will directly increase Swiss mortgage or commercial real estate lending costs. The indirect consequences of the broader regulatory overhaul are more difficult to determine.

Banks facing tighter governance, liquidity and risk-management requirements could become more selective about complex or highly leveraged transactions. Commercial property development, large acquisition financing and other capital-intensive activities may therefore receive greater scrutiny even if the reforms do not mechanically increase the regulatory cost of every domestic property loan.

Much will depend on how banks adjust their balance sheets once the final rules are known. For institutional real estate investors, the reforms could consequently produce a mixed outcome. A more resilient banking system reduces systemic financial risk and can strengthen confidence in Switzerland as an investment market. At the same time, tighter risk discipline could reinforce the differentiation between conservatively financed assets and transactions requiring greater leverage.

The Credit Suisse experience illustrates why Switzerland considers that trade-off necessary. Before its collapse, Credit Suisse was formally subject to extensive international and Swiss regulation. Yet confidence deteriorated sufficiently rapidly that authorities concluded an emergency takeover by UBS was necessary in March 2023. The subsequent government review identified shortcomings in the existing too-big-to-fail regime that required further reform.

The resulting regulatory project is therefore attempting to address several weaknesses simultaneously: insufficient capital protection around foreign subsidiaries, weaknesses in management accountability, limitations on early supervisory intervention and difficulties mobilising liquidity quickly during a crisis.

Implementation will take years rather than months. The consultation on the latest Banking Act and Liquidity Ordinance changes remains open until 19 November 2026, after which the Federal Council intends to prepare legislation for Parliament. The legislative changes are not expected to enter into force before 2029 at the earliest, while parts of the new liquidity framework could involve considerably longer transition periods.

The eventual consequences will therefore depend heavily on what survives consultation and parliamentary debate. For Switzerland, the central issue is larger than the regulation of UBS. The country is attempting to preserve the advantages of hosting internationally significant financial institutions while reducing the possibility that the failure of one of them could again require extraordinary government intervention.

For property investors and businesses dependent on bank financing, the immediate implications are less dramatic. There is currently little evidence that the proposals will automatically translate into more expensive Swiss real estate lending. The more important longer-term effect could instead be a banking system placing greater emphasis on liquidity, leverage, governance and the ability of borrowers and assets to withstand periods of financial stress.

In that sense, the legacy of Credit Suisse may ultimately extend well beyond banking regulation. Switzerland is moving towards a financial system in which access to capital is accompanied by closer examination of the risks behind it, a development that could gradually influence how banks evaluate companies, developments and investment assets across the wider economy.

Source: CMS and CIJ.World Research & Analysis Team

Poland Fast-Tracks Baltic Ports, Railways and Nuclear Infrastructure in Strategic Investment Push

Poland is preparing to accelerate a series of major transport, port and energy projects under new legislation intended to shorten the lengthy administrative process surrounding strategically important infrastructure. The programme places the Baltic coast at the centre of Poland’s economic, energy and defence strategy, with investment planned across ports, railways, roads and nuclear infrastructure.

The Council of Ministers approved the proposed legislation on 18 August 2026. The measures are intended to simplify procedures for projects considered particularly important to national security and the economy, addressing a development process in which major infrastructure schemes can currently spend years progressing through approvals and administrative decisions.

Prime Minister Donald Tusk presented the programme as part of a wider effort to strengthen Poland’s position on the Baltic Sea. The government wants improved ports and their surrounding transport networks to support commercial growth while simultaneously increasing the country’s ability to move military equipment and maintain resilient supply routes.

Among the projects identified for faster implementation is the extension of national road No. 7 towards the Port of Gdynia. The government also intends to accelerate the planned external port in Gdynia, expansion of Świnoujście’s external harbour and the development referred to by the government as Cape Pomerania.

The programme extends beyond individual port developments. Railway infrastructure connecting Poland’s industrial and population centres with the Baltic coast is also included, reflecting the importance of inland connections to the competitiveness of maritime terminals.

Routes identified by the government include Szczecin-Świnoujście, Wrocław-Szczecin, Chorzów Batory-Tczew, Warsaw-Gdańsk and Nowa Wieś Wielka-Gdynia. Infrastructure associated with a transhipment facility on Port Island, including new road and railway access across the Dead Vistula, is also among the projects intended to benefit from faster procedures.

This makes the initiative relevant well beyond Poland’s maritime sector. Improved north-south freight corridors could strengthen connections between Baltic terminals and manufacturing, logistics and distribution markets across Poland and Central Europe. Faster and more reliable access to ports can also influence decisions concerning warehouses, intermodal terminals and industrial developments along the principal transport corridors.

Poland’s ports have already expanded significantly as the country’s role in European trade has increased. Gdańsk has emerged as the largest Baltic port by cargo volumes and has been moving higher in the European port rankings. According to figures cited by the government, the port handled a record 7.9 million tonnes of cargo during July.

Further port investment is therefore increasingly concerned with maintaining capacity ahead of future demand rather than simply catching up with Western European infrastructure. Larger terminals, improved rail access and stronger road connections could allow Polish ports to handle a greater proportion of trade serving Central and Eastern Europe.

The geopolitical environment has added another dimension to these investments. Since Russia’s invasion of Ukraine, Baltic transport infrastructure has acquired greater strategic importance for NATO’s eastern members. Ports and railway corridors capable of handling heavy equipment can serve both commercial supply chains and military mobility requirements.

That overlap between civilian and defence infrastructure is becoming increasingly important across Europe. Investment in bridges, railways, roads and ports can generate conventional economic returns while simultaneously increasing the ability of governments and armed forces to move equipment rapidly across national territory.

Poland’s recent naval investment reinforces the maritime element of the strategy. The government’s announcement followed the naming ceremony for Wicher, the first frigate being constructed under the Miecznik programme, as Poland simultaneously invests in naval capabilities and the land-based infrastructure supporting its Baltic coastline.

Energy security forms another part of the programme. Infrastructure connected with Poland’s first nuclear power station in Pomerania is expected to benefit from accelerated procedures, including developments in the Choczewo and Krokowa municipalities and associated maritime infrastructure.

The nuclear project requires considerably more than construction of the generating units themselves. Roads, power connections, marine facilities and supporting infrastructure will be needed to build and subsequently operate a power station of this scale. Accelerating associated infrastructure could therefore become important to maintaining the wider project schedule.

The combination of nuclear energy, ports and transport corridors illustrates the broader direction of Polish infrastructure policy. Rather than treating energy, logistics and defence as separate investment categories, the government is increasingly approaching them as interconnected elements of national resilience.

For the property and investment markets, this could have significant consequences. Major transport investment can alter the attractiveness of industrial land, particularly around Gdańsk, Gdynia, Szczecin and Świnoujście and along the corridors connecting the coast with Warsaw, Silesia and western Poland.

Improved rail capacity could also strengthen Poland’s position as a logistics gateway for neighbouring landlocked markets. Czechia and Slovakia, as well as parts of Germany and other Central European economies, represent potential hinterlands for Polish Baltic ports, making infrastructure capacity an important component of competition between northern European maritime gateways.

However, faster administrative procedures will not by themselves guarantee faster construction. Large infrastructure projects still face potential constraints including financing, procurement, environmental requirements, construction capacity and coordination between national and local authorities. The practical impact of the legislation will therefore depend on how effectively shortened procedures translate into investment decisions and work on the ground.

There is also a balance to be maintained between speed and scrutiny. Strategic projects frequently involve substantial land, environmental and community impacts, particularly major ports, railway corridors and nuclear infrastructure. Accelerating decisions will therefore need to preserve sufficient assessment while eliminating unnecessary duplication and administrative delays.

Tusk has framed the programme in ambitious terms, arguing that completion of the investment package could establish Poland as a leading Baltic power. While that description reflects the government’s political ambition, the underlying economic strategy is more tangible: increase port capacity, strengthen connections to Poland’s interior, secure additional energy infrastructure and improve the country’s ability to respond to security challenges.

The programme also illustrates how geopolitical change is influencing infrastructure investment across Central and Eastern Europe. Projects once assessed principally according to transport demand or commercial returns are increasingly being evaluated according to their contribution to energy independence, supply-chain resilience and defence mobility.

For Poland, the Baltic coast sits at the intersection of all three. If the planned investments progress as intended, the country’s ports could become more important not only as gateways for Polish trade but as strategic infrastructure serving a wider Central European market.

The government’s challenge will now be turning faster legislation into faster delivery. Poland already has an extensive pipeline of infrastructure ambitions. The significance of the new approach will ultimately be measured by whether projects that previously required years of administrative preparation can move more rapidly from government plans into operating ports, railways, roads and energy infrastructure.

Poland’s Defence Expansion Moves Beyond the Barracks Into Industry and Infrastructure

Poland’s Armed Forces Day has evolved into a public demonstration of a much broader transformation taking place across the country. The military equipment displayed in Warsaw each August represents only the most visible part of an investment programme that is reshaping defence capabilities while directing increasing amounts of capital towards industry, transport infrastructure, logistics and domestic manufacturing.

The change is taking place against a markedly different European security environment following Russia’s invasion of Ukraine. Poland’s position on NATO’s eastern flank, alongside its borders with Belarus, Russia’s Kaliningrad region and Ukraine, has pushed defence much higher up the country’s political and economic agenda. This is reflected in planned defence expenditure of around PLN 200.1 billion in 2026, equivalent to approximately 4.8% of GDP.

Such spending creates a challenge beyond acquiring weapons. The government must demonstrate to citizens what this unprecedented allocation of public resources is producing, and Armed Forces Day provides one of the clearest opportunities to do so. Rather than defence programmes remaining represented mainly by contracts, budgets and procurement announcements, the parade allows people to see equipment already entering service. Tanks, artillery, air-defence systems, helicopters and combat aircraft turn large government expenditure figures into something tangible.

The event consequently has several audiences. For Polish citizens, it demonstrates the development of the armed forces and provides direct contact with military personnel. For NATO partners, it underlines Poland’s growing role in the alliance’s eastern security architecture. For potential adversaries, the display forms part of a wider deterrence message intended to demonstrate that investment is being converted into military capability.

The importance of the domestic audience is increasing as the financial commitment grows. Poland’s defence programme competes for resources with healthcare, education, housing and other public priorities, making continued public understanding important. Military celebrations can help explain that expenditure by connecting taxpayers directly with the people, equipment and infrastructure being financed.

At the same time, Poland’s defence strategy increasingly extends beyond the armed forces themselves. Modern military capability depends upon transport networks, logistics facilities, energy systems, communications infrastructure, manufacturing capacity and secure supply chains. Heavy military equipment requires roads and bridges capable of carrying it, railways that can move it efficiently across the country, and storage, maintenance and fuel facilities positioned to support operations. This is creating a growing connection between defence policy and infrastructure investment.

Poland is expected to receive more than €43 billion through the European Union’s SAFE financing mechanism. The programme is intended to support military capabilities including air and missile defence, artillery and counter-drone systems, but Poland also plans to use funding for infrastructure that can strengthen military mobility and national resilience.

A further PLN 22.5 billion Security and Defence Fund is supporting investment involving local authorities and businesses. Part of this capital is intended for dual-use infrastructure, including roads, bridges, tunnels and rail connections capable of serving civilian communities while also allowing military equipment and personnel to move more efficiently.

This creates an increasingly important crossover with construction and real estate. Defence expenditure is generating requirements for factories, specialist industrial facilities, warehouses, maintenance centres, research facilities and secure logistics infrastructure. Some assets will remain entirely within the military estate, but others will form part of Poland’s wider industrial economy.

The expansion also has the potential to influence the geography of investment. For many years, Poland’s principal logistics and industrial markets have been concentrated around Warsaw, Upper Silesia, Poznań, Wrocław, Central Poland and the country’s western transport corridors. Increased security investment along the eastern frontier could gradually strengthen infrastructure in regions that have historically attracted less institutional property development.

The Eastern Shield programme is an example of this changing investment pattern. Poland is developing defensive infrastructure along its borders with Belarus and Russia while simultaneously creating supporting transport, storage and engineering capacity. Some of these investments can have civilian applications, particularly where upgraded infrastructure improves regional connectivity or provides resources that can also be deployed during natural disasters and other emergencies.

The larger economic opportunity may emerge from Poland’s attempt to keep a greater proportion of defence expenditure within the domestic economy. Rather than relying predominantly on imported military systems, the government is seeking to increase Polish participation in manufacturing, maintenance and defence supply chains. Its plans for EU-backed defence financing envisage a substantial proportion of spending flowing through Polish companies.

This could have consequences considerably beyond the country’s established defence manufacturers. Military production depends upon extensive supplier networks covering electronics, communications technology, software, precision engineering, metals, advanced materials, vehicle components and specialist services. Expansion of these industries requires production capacity, laboratories, offices, warehouses and logistics infrastructure. Defence policy could therefore become another source of industrial real estate demand.

The trend fits into a wider European shift in which security expenditure is increasingly being connected with industrial policy. Governments are seeking not only greater military capability but also domestic production capacity and supply chains that are less dependent on suppliers outside Europe.

For Poland, the potential economic effects are particularly significant because of the scale of its military expansion. The country is simultaneously purchasing advanced international weapons systems, developing domestic production and investing in infrastructure capable of supporting Polish and allied forces.

Facilities at locations such as Powidz illustrate the physical consequences. Investment there is increasing Poland’s ability to store equipment and support the rapid deployment of allied forces. Such projects demonstrate that military readiness depends as much on logistics and infrastructure as it does on the equipment eventually seen during public parades.

There is also a workforce dimension. Expanding armed forces and defence industries require soldiers, engineers, technicians, construction specialists, cybersecurity experts and manufacturing employees. Competition for skilled labour could therefore become another consequence of the defence investment cycle, particularly in locations where large military and industrial projects are concentrated.

The social purpose of Armed Forces Day should also be viewed against this background. Allowing people to encounter soldiers and equipment directly helps reduce the distance between the military and civilian population. It can support recruitment and public understanding while reinforcing the idea that national security extends beyond professional armed forces.

Poland’s emerging security model increasingly includes civilian resilience, energy security, cybersecurity, transport capacity and protection against disinformation alongside conventional defence. The distinction between military preparedness and the resilience of the wider economy is consequently becoming less clear.

This also has implications for investors. Security has traditionally been treated as an external condition affecting property investment rather than as a source of investment itself. Poland’s current defence programme is beginning to change that relationship. Transport upgrades, industrial expansion, logistics requirements and domestic defence manufacturing are generating capital expenditure that intersects directly with commercial property and infrastructure markets.

Not every military investment will create an opportunity for private capital, and defence expenditure should not automatically be interpreted as commercial real estate growth. However, the secondary effects of sustained spending approaching 5% of GDP could become increasingly visible through manufacturing investment, infrastructure upgrades and supporting supply chains.

There is a wider economic argument behind the strategy. Businesses invest and property markets develop partly because companies expect infrastructure to function and the political and security environment to remain stable. Defence spending is therefore increasingly connected with maintaining the conditions required for longer-term economic activity.

This makes Poland an important example of a broader transformation underway across Europe. As governments increase defence budgets, the effects are likely to spread beyond military procurement into construction, manufacturing, logistics, technology and infrastructure.

The equipment appearing on Warsaw’s streets during Armed Forces Day provides the public face of that transformation. Behind it sits a considerably larger programme involving factories, transport corridors, military facilities, logistics networks and industrial supply chains. Poland’s military expansion is therefore becoming more than a defence story. It is developing into an industrial and infrastructure story as well, one whose impact on investment, regional development and the built environment could continue long after the parade has left the streets.

Source: WEI and CIJ EUROPE Analysis Team

Climate disruption is emerging as a new financial risk for European business

Extreme weather is increasingly affecting European companies beyond the immediate cost of damaged infrastructure or interrupted transport. Disruptions to supply chains, commodity markets and industrial production are beginning to feed through into corporate liquidity, working-capital requirements and payment behaviour, adding another layer of risk for businesses already operating in an uncertain economic environment.

The strengthening El Niño weather pattern is adding to those concerns. International climate forecasts indicate that the event is likely to intensify during the second half of 2026, with NOAA estimating a greater than 90% probability that it will become very strong during the Northern Hemisphere autumn and winter of 2026–27. Current projections suggest its influence could continue into spring 2027.

For European companies, the significance lies less in the climate phenomenon itself than in its potential economic consequences. Changes in rainfall and temperatures across major agricultural regions can affect harvests and the availability of commodities such as coffee, cocoa, soy, sugar, rice and palm oil. The effects vary substantially between crops and producing countries, but greater uncertainty over output can translate into volatile prices and more complicated procurement decisions.

Germany is particularly exposed to this type of disruption because of the importance of international trade to its economy and its dependence on imported raw materials. Manufacturers can face higher purchasing and transportation costs at the same time as customers in affected export markets experience their own financial pressures.

Frank Liebold, Country Director Germany at Atradius, said increasingly severe weather events are becoming a multi-dimensional economic issue, affecting growth, international trade and ultimately the way companies manage payments and financial risk.

The present situation on the Rhine demonstrates how quickly environmental conditions can become an industrial and financial problem.

Low water levels during the summer have restricted freight movements along one of Europe’s most important transport corridors. Reduced vessel capacity has increased transportation costs and forced some companies to move freight onto rail and road networks. Chemical producers, steelmakers, energy companies and other industrial users dependent on the river have been among the businesses facing disruption.

These conditions should not be attributed directly to El Niño. The Rhine’s low water levels reflect European heat and rainfall patterns influenced by several climatic factors. Nevertheless, the situation provides a clear example of how physical disruption can eventually affect corporate finances.

When normal transport capacity becomes unavailable, companies may have to pay more for alternative logistics, maintain larger inventories or wait longer for essential materials. Deliveries can be delayed while capital remains tied up in goods that have not yet reached customers. Businesses may therefore experience higher costs at precisely the same time that revenues are being postponed.

For companies with limited financial headroom, prolonged disruption can put pressure on working capital. Suppliers may be asked for longer payment periods, companies may require additional short-term financing and payments to creditors can begin to slow.

This is where climate-related disruption becomes relevant to credit risk.

The timing is significant because German companies are already operating in an environment of elevated insolvency and payment concerns. Atradius research for 2026 points to continued caution among businesses when extending trade credit, while companies remain concerned about the financial condition of customers and the possibility of further corporate failures.

Weather-related disruption should not therefore be regarded as an independent explanation for rising insolvencies. Instead, it represents an additional pressure capable of aggravating existing problems caused by weak economic growth, financing costs, geopolitical uncertainty, energy prices and international trade disruption.

The interaction between these risks is becoming increasingly important. Geopolitical instability affecting shipping routes and energy markets can raise transportation and production costs, while weather events can simultaneously disrupt agricultural production and inland logistics. Companies can consequently face several different supply-side pressures at the same time.

For the commercial property sector, the implications extend beyond the physical resilience of individual buildings.

Industrial and logistics occupiers depend on transport networks, energy infrastructure, suppliers and international distribution systems. A warehouse or production facility may suffer no physical damage from an extreme weather event while the company operating inside it experiences substantial financial disruption because materials cannot arrive or finished products cannot reach customers.

This changes the way climate exposure needs to be considered by property owners, investors and lenders. Assessing whether a building can withstand heat, flooding or other extreme conditions remains important, but the resilience of the occupier’s wider business model is becoming increasingly relevant as well.

Logistics operators may need alternative transportation routes, while manufacturers could maintain larger inventories of strategically important materials. Companies dependent on rivers, ports or individual overseas suppliers may increasingly have to diversify their supply networks. These changes can affect demand for warehouse space, inventory strategies and the location of future industrial investment.

Buildings themselves are also becoming more expensive to operate in some circumstances. Higher cooling requirements during prolonged heat, greater investment in resilience, rising insurance costs and the need to protect water and energy supplies can all add to occupiers’ expenditure.

The financial consequences can therefore extend throughout the property relationship. Higher operating costs affect tenants, weaker occupier finances increase risk for landlords, and changes in tenant credit quality can ultimately influence lenders and investors.

Climate resilience is consequently developing from a predominantly environmental and technical consideration into a broader financial issue.

The same shift is becoming visible elsewhere in the real estate industry, where insurers, banks and investors are paying greater attention to the potential effect of physical climate exposure on operating costs, financing conditions, asset liquidity and future property values.

For companies, the lesson from the current period is not that every drought, heatwave or El Niño cycle will lead to financial distress. The greater concern is the cumulative effect of repeated disruptions occurring alongside other economic pressures.

A delayed shipment may initially be a logistics problem. If the disruption persists, it can become an inventory and cost problem. If revenues are delayed while expenses continue rising, it becomes a liquidity issue. When that pressure begins affecting the ability of companies to pay suppliers and creditors, the consequences move into the financial system.

For investors, developers, landlords and lenders, understanding climate risk therefore increasingly means looking beyond the physical condition and location of a property. The ability of the businesses occupying those buildings to maintain production, secure supplies, move goods and meet their financial obligations during periods of disruption is becoming another component of real estate risk.

Flora Development completes 213-apartment Esy Floresy project in Warsaw’s Służewiec

Flora Development has received an occupancy permit for its Esy Floresy residential development in Warsaw’s Mokotów district, completing the project as the Służewiec area continues its gradual transition from a predominantly office location towards a more mixed-use urban district.

Located at 7 Cybernetyki Street, the development consists of two residential buildings containing a combined 213 apartments. Handovers to buyers began in August 2026.

The Esy building contains 95 apartments and Floresy provides another 118 units. Apartments range from 27 sqm to 141 sqm, with layouts from one to five rooms. Unibep Group served as general contractor.

The completion comes as Służewiec undergoes a broader change in its urban function. The district developed for many years primarily as one of Warsaw’s largest office concentrations, but residential construction and supporting amenities are increasingly adding other uses to the area. Flora Development positioned Esy Floresy within this changing environment, with residential space, communal facilities and greenery forming part of the project.

“Esy Floresy is an important project for us not only because of its scale, but above all because of its location. This part of Mokotów is undergoing significant change, and we wanted to create a development that responds well to this transformation,” said Dominik Różański, CEO of Flora Development.

The scheme has undergone a BREEAM pre-assessment and incorporates photovoltaic systems, rainwater retention, electric vehicle charging infrastructure, LED lighting and smart-building solutions. Residents also have access to a communal club and a rooftop viewing terrace.

For Flora Development, the project also forms part of its strategy of investing in Warsaw locations undergoing changes in use. Służewiec’s evolution is particularly relevant in this respect, as residential projects increasingly sit alongside the substantial office stock developed in the district during previous investment cycles.

With Esy Floresy now moving into the handover stage, Flora Development is preparing another residential development for launch. The company is also continuing to look for additional sites as it expands its Warsaw pipeline.

Poland’s regional office market shifts towards quality as new leasing rises despite lower overall activity

Poland’s regional office markets recorded weaker overall leasing volumes in the first half of 2026, but the composition of demand points to continued occupier activity and a growing preference for newer, better-located buildings.

Around 310,000 sqm of office space was leased across the country’s regional markets during H1 2026, a decline of 21% compared with the same period last year. Activity accelerated significantly during the second quarter, when the volume of agreements was approximately 50% higher than in Q1, although this was not enough to compensate for the relatively slow opening months of the year.

The decline in headline leasing figures masks a change in the structure of demand. New leases and expansions played a greater role, pushing net take-up 13% above the previous year. These transactions represented 59% of total leasing activity, while renewals accounted for the remaining 41%.

Among the largest transactions completed during the period were Brown Brothers Harriman’s 13,700 sqm new lease at WITA C in Kraków, Enea Group’s 11,500 sqm renewal and expansion at Business Garden Poznań and Adtran’s 6,800 sqm renewal at Tensor Y in Gdynia. IT, manufacturing and business services generated the largest volumes of leasing activity by sector.

The figures indicate that regional markets are increasingly being shaped by occupiers consolidating or expanding within properties capable of meeting current workplace requirements rather than by broad-based demand across the entire stock.

Modern office inventory outside Warsaw reached approximately 6.76 million sqm at the end of June, with Kraków, Wrocław and the Tri-City remaining the largest and most established regional markets. At the same time, the development cycle has slowed considerably following several years of relatively strong construction activity.

More than 70,000 sqm was completed during the first six months of 2026, while projects under development amounted to just under 180,000 sqm, 22% below the level recorded a year earlier. Poznań currently has the highest level of development activity among the regional cities.

The slowdown in construction is being accompanied by another change in the structure of supply. Older offices that have become less competitive are increasingly being removed from the leasing market, with some properties or sites being considered for residential, hotel or educational uses.

Vacancy nevertheless remains relatively high. The average rate across Poland’s regional markets stood at 17.3% at the end of H1, although this represented a slight improvement both quarter-on-quarter and year-on-year. Katowice recorded the highest vacancy at 22.2%, followed by Wrocław at 21.8%, while Szczecin had the lowest rate at 8.4%.

These headline figures increasingly conceal substantial differences between individual buildings. Modern properties in established locations continue to attract occupiers, while older or technically less efficient offices face greater difficulty securing tenants.

This divergence is also becoming visible in rental levels. Asking rents across the regional markets ranged from approximately €8 to €19 per sqm per month at the end of June, while rents in some of the strongest-performing buildings reached around €20 per sqm. Older properties carrying higher vacancy are generally competing at substantially lower levels.

The combination of selective occupier demand and reduced development therefore appears likely to deepen the separation between competitive and ageing office stock. For landlords, location alone is becoming less sufficient: technical standards, operating efficiency and the overall quality of the workplace are increasingly influencing a building’s ability to retain tenants and defend rental levels.

Supply constraints could gradually alter the vacancy picture as well. AXI IMMO estimates that approximately 120,000 sqm of new offices will be completed across the regional markets during 2026, around one-third of the volumes recorded during the stronger development period up to 2024.

With fewer projects entering construction and some obsolete buildings leaving the office inventory altogether, the amount of competitive space could tighten even while the headline vacancy rate remains elevated. AXI IMMO expects this combination eventually to contribute to declining vacancy and support rental growth in the strongest regional properties.

The first-half figures consequently point to a regional office market that is becoming more selective rather than simply weaker. Total leasing has fallen, but new leases and expansions have increased, while constrained development is limiting the arrival of competing stock. For occupiers, the choice of suitable modern space could therefore become narrower; for owners, the widening difference between buildings capable of meeting current tenant expectations and those requiring significant investment is likely to become one of the defining features of Poland’s regional office market over the coming years.

ČMN reaches CZK 18.7 billion portfolio as it targets larger Czech real estate acquisitions

Czech investment group Českomoravská Nemovitostní (ČMN) has reached CZK 18.7 billion in assets under management ten years after its establishment, following a decade of acquisitions that has taken the company from a small Brno-based real estate business to one of the Czech Republic’s largest owners of premium office space.

Founded in 2016, ČMN currently manages 14 office buildings with approximately 177,000 sqm and four retail properties providing a further 49,700 sqm. The combined commercial portfolio therefore covers around 226,700 sqm, compared with approximately 50,000 sqm of lettable space managed by the group during its earlier development.

The company says more than 20,000 investors have invested through its structures, while almost 190 companies occupy properties within its portfolio. Its tenant base includes companies such as Deloitte, Google, Vodafone, Siemens, Nestlé and Pfizer. More than 16,000 investors participate through the NEMO real estate fund.

ČMN’s expansion has largely been built around acquisitions in established Prague office districts. Its properties are located across areas including the city centre, Vinohrady, Karlín, Smíchov and Dejvice, reflecting a strategy focused primarily on existing commercial assets in established locations rather than development-led expansion.

The group began making acquisitions in 2018, purchasing properties including Mezi Vodami, Václavské náměstí 62 and Aragonit. A year later it acquired the Blox and Crystal office buildings, taking the value of its portfolio above CZK 4.9 billion and establishing the NEMO real estate fund.

Expansion accelerated in 2020 with investments in Churchill I & II and City West C1 & C2, pushing the managed portfolio above CZK 11 billion. ČMN subsequently expanded into Karlín through the acquisition of Apeiron, Corso Karlín and Zirkon in 2021, when the portfolio reached CZK 13.5 billion.

The group continued increasing its exposure to Churchill I & II, raising its interest to 75% in 2023 before becoming the sole owner in 2024. The same year, ČMN and the NEMO fund completed what the company describes as the largest acquisition in its history, involving five office buildings and 11 retail parks.

By 2025, ČMN says it had passed the threshold of 20,000 investors and become the third-largest landlord of office space in the Czech Republic. Its current portfolio consists of 14 office properties and four retail parks with a total reported value of CZK 18.7 billion.

The scale of the company’s ambitions is also becoming more apparent in the size of transactions it is prepared to pursue. ČMN chairman Radek Stacha said the group recently competed for the Riverside office complex in Prague’s Karlín district in a transaction valued at approximately €300 million.

According to Stacha, ČMN’s offer was around €2 million short of the successful bid. While the company did not secure the property, participation at this level indicates that it is positioning itself to compete for substantially larger institutional assets than during its earlier years.

“Over ten years, we have more than quadrupled the lettable area under management, from approximately 50,000 sqm to today’s 226,700 sqm, and our portfolio is valued at CZK 18.7 billion,” Stacha said. He added that the company intends to continue looking for major acquisition opportunities as it enters its second decade.

Alongside its investment strategy, ČMN is introducing a revised corporate identity to coincide with its tenth anniversary. The company describes the change as an evolution rather than a complete redesign, intended to reflect the increased scale and maturity of the business while retaining continuity with its existing brand.

The development of ČMN over the past decade also reflects the increasing role of domestic capital in the Czech commercial property investment market. From relatively small transactions in its early years, the group has assembled a sizeable Prague-focused office portfolio while adding retail exposure and broadening its investor base.

With CZK 18.7 billion of assets now under management and the company prepared to compete for transactions approaching €300 million, its next phase is likely to depend less on increasing the number of properties and more on the scale and quality of future acquisitions. The Riverside bidding process provides an indication that ČMN is now looking at opportunities considerably larger than those that shaped its first decade.

Poland’s Hotel Sector Enters a New Phase as Investment Shifts to Quality and Repositioning

Poland’s hotel market is moving into a more mature stage of development as improving operating performance, international brand expansion and investment in existing properties reshape the sector. Rather than growth being measured primarily by the number of new hotels, developers and investors are increasingly concentrating on larger projects, higher standards and properties capable of attracting guests throughout the year.

More than 2,600 hotels operate across Poland, while accommodation capacity has continued to expand. The number of available hotel beds reached around 334,700 in 2025, up from approximately 321,000 a year earlier. Over the past decade, the market has recorded substantial growth in accommodation capacity, accompanied by a gradual shift towards larger and more professionally operated properties.

International hotel groups are playing an increasingly important role in this transformation. Although internationally branded hotels still account for a relatively small proportion of the country’s total number of properties, their share of rooms is considerably higher. New development is also increasingly concentrated around established operators and brands, particularly in the upper-midscale, upscale and premium segments.

Katarzyna Tencza, Transaction Director at Walter Herz, says the Polish hotel sector has moved beyond the post-pandemic recovery period and is entering a stage in which the standard and positioning of individual properties are becoming increasingly important to their competitiveness.

One of the clearest changes is the increasing size of new developments. Investors are bringing forward properties containing several hundred rooms together with larger leisure, conference, food and beverage and wellness components. The most prominent example is Hotel Gołębiewski in Pobierowo. The development is designed to ultimately provide around 1,200 rooms, making it one of the largest hotel projects in the country.

Similar changes can be seen in urban markets, where older properties are increasingly being redeveloped and repositioned rather than simply replaced by conventional new-build hotels. In Warsaw, the former Gromada airport hotel has been transformed into a dual-branded Campanile PRIME and Première Classe complex with more than 390 rooms. The project illustrates the potential of existing hotel sites where location and established infrastructure can support investment in a substantially upgraded product.

Warsaw continues to lead the country’s urban hotel sector, with more than 19,000 rooms available by mid-2026. Hotel room supply expanded by around 5.5% during 2025, placing the Polish capital among the faster-growing major hotel markets in Central and Eastern Europe. Recent additions have included PURO Warsaw Old Town and Moxy Warsaw City, while the development pipeline contains further internationally branded projects.

Canopy by Hilton and AC by Marriott are among the schemes being developed, alongside additional accommodation concepts planned for the capital. Another important part of the pipeline involves the transformation of existing hotels. The Regent Warsaw is expected to be repositioned under the JW Marriott brand, demonstrating how established properties in strong locations can be moved into a higher market segment without adding an entirely new building to the city’s stock.

Warsaw’s ability to absorb additional capacity has so far been supported by recovering international tourism, corporate travel and events. However, future projects will increasingly have to compete on product quality as the market becomes more sophisticated.

Kraków followed a different development cycle. A significant volume of accommodation entered the market between 2021 and 2024, but the pace of additions has subsequently slowed. Occupancy recovered strongly during 2025 despite the earlier expansion of room supply, indicating that visitor demand has been able to absorb much of the additional capacity. The more restricted pipeline may provide further support to hotel performance if tourism continues to grow.

At the same time, Kraków is attracting investment towards the upper end of the market. Projects associated with JW Marriott, Nobu, The Hoxton and Le Méridien demonstrate growing interest in positioning the city for higher-spending leisure and business travellers. This development reflects Kraków’s changing role from predominantly a high-volume tourism destination towards a more diversified hotel market capable of supporting a wider range of international concepts.

Conditions elsewhere in Poland vary considerably. The Tricity market benefited from strong room rates and relatively limited additions to supply during 2025. A larger development pipeline is nevertheless emerging, with more than 1,000 rooms potentially being introduced through projects associated with brands including Renaissance, Golden Tulip, Radisson Blu, Swissôtel and Q Hotel Plus.

Wrocław has experienced a considerably faster expansion. More than 1,300 rooms were added over an 18-month period, increasing competition between operators. The rapid growth of supply contributed to weaker hotel performance during 2025, illustrating the risk of adding substantial capacity faster than demand can absorb it.

Poznań has developed more cautiously. After several years of relatively limited hotel investment, projects including Four Points by Sheraton, Hotel de Rome and Y3 Signature could gradually expand the city’s accommodation offer. The contrast between these markets underlines the increasingly local nature of hotel investment decisions. National tourism growth alone is no longer sufficient to determine the prospects of individual projects; investors must consider the balance between demand and supply within each city.

Some of the strongest development activity is taking place outside Poland’s major cities. The Baltic coast has experienced substantial growth in accommodation over the past decade, supported by increasingly large resort developments. Several new properties opened during 2025, while the Pobierowo Gołębiewski project represented a major addition in 2026. Further developments are planned or under construction in Międzyzdroje, Dziwnów, Ustronie Morskie and Krynica Morska.

Poland’s mountain destinations are following a similar direction. New properties increasingly combine hotel accommodation with swimming pools, wellness facilities, restaurants, entertainment and other services intended to broaden their appeal beyond traditional winter or summer holiday periods. The strategy reflects an important challenge facing resort operators: extending occupancy beyond peak seasons. Larger wellness and leisure components can help generate demand during autumn, winter and spring, but they also increase development costs and make professional hotel management increasingly important.

New construction is only one part of the sector’s development. Refurbishment, conversion and rebranding are becoming increasingly significant sources of investment. Owners are looking more closely at older properties occupying established locations where renovation can create a hotel capable of competing with newly developed accommodation.

“One of the most visible trends in the sector is the growing number of refurbishments, redevelopments and rebranding projects. Investors are increasingly using well-located existing assets and adapting them to today’s market rather than relying exclusively on new development,” Tencza says.

The strategy can provide an alternative in markets where development land is scarce or construction costs make ground-up projects difficult to justify. The former Hotel Tychy & Tychy Prime, now operating as B&B Hotel Tychy, is one example. Higher-end repositioning is also becoming more common, including the planned transformation of Warsaw’s Regent and the redevelopment of Kraków’s former Royal Hotel as Le Méridien.

Improving hotel performance is also attracting greater investor attention, although transaction volumes remain relatively modest compared with Poland’s larger commercial property sectors. Around 12 hotel properties changed ownership during 2025, generating approximately €135 million of investment volume. Transactions included Four Points by Sheraton Warsaw Mokotów, hospitality properties within the Noli Studios portfolio, B&B Hotels assets and Hampton by Hilton Kalisz.

The limited number of transactions does not necessarily indicate weak demand for hotel investment. Market advisers point to the restricted availability of institutional-quality assets offered for sale as one factor limiting deal flow. This creates a different investment environment from offices or logistics, where significantly larger portfolios and individual properties are regularly marketed.

The composition of Poland’s hotel stock is changing alongside its expansion. Three-star properties continue to represent the largest part of the market, but investment is increasingly moving towards four- and five-star accommodation and hotels offering a wider range of services. Conference facilities, restaurants, wellness areas and leisure components are becoming more important as operators seek to diversify their customer base and increase year-round utilisation.

Business and leisure travel are also becoming less clearly separated. Travellers increasingly combine professional trips with additional leisure stays, while changing climate preferences could support demand for northern European destinations during periods when southern markets experience extreme summer temperatures. For investors, however, demographic changes and competition for international visitors will remain longer-term considerations.

Poland’s hotel market is therefore entering a phase in which adding accommodation alone will not guarantee success. The strongest projects are increasingly likely to be those that combine established locations with professional management, recognised brands and facilities capable of generating demand beyond traditional peak periods.

The next investment cycle is consequently likely to be shaped as much by the transformation of existing hotels as by construction of new ones. As the sector becomes more competitive, capital is moving towards properties where refurbishment, branding and improved operations can create additional value, marking a gradual transition from expansion by volume towards competition based on the quality and performance of individual assets.

CEE property investment rises above €5.5 billion as Poland drives first-half recovery

Commercial real estate investment across Central and Eastern Europe continued to recover during the first half of 2026, with transaction volumes across the five main regional markets exceeding €5.5 billion. Activity increased by 6% compared with the same period of 2025, although the improvement was unevenly distributed, with Poland accounting for more than half of the capital deployed.

According to Knight Frank’s CEE Investment Market H1 2026 report, Poland generated 55% of investment across the five markets covered, followed by the Czech Republic with 26%. Hungary represented 11%, while Romania and Slovakia each accounted for 4%.

Poland recorded the strongest increase, with investment volume rising 77% year-on-year during the first six months of 2026. Hungary also moved higher, recording a 24% increase as transaction activity strengthened following a weaker period.

The Czech Republic moved in the opposite direction, with first-half investment falling 33% compared with a particularly strong 2025. Despite the decline, approximately €1.5 billion of property changed hands during the period, leaving the country firmly established as the region’s second-largest investment market. Slovakia and Romania recorded declines of approximately 48% and 45%, respectively, as fewer major transactions reached completion.

The composition of investment is also changing. Offices were the largest asset category during the first half, attracting approximately €1.5 billion and representing 27% of the regional market. Office transactions were particularly important in Hungary, Romania and Slovakia, while significant deals were also completed in Poland and the Czech Republic.

Retail followed closely with €1.4 billion, equivalent to 25% of investment. The figure is already equal to around 73% of the retail volume recorded during the whole of 2025. Poland was responsible for €1.03 billion of this activity, reflecting the return of larger shopping-centre and portfolio transactions to the market. Elsewhere in the region, retail investment remained more concentrated on smaller retail parks and convenience-oriented properties.

Industrial and logistics property accounted for 19% of regional investment, with transactions totalling approximately €1.04 billion. Poland represented around three quarters of that amount. Buyers have remained selective, with demand concentrated on properties supported by longer leases and established occupiers, including sale-and-leaseback transactions and build-to-suit facilities. US investors accounted for the majority of industrial investment in Poland during the period, according to Knight Frank.

One of the more significant developments has been the growing institutional role of rental housing. Living assets represented 21% of CEE investment during the first half following several large transactions in Poland and the Czech Republic. These included the Resi4Rent and Vantage transaction in Poland, several forward-purchase agreements in Prague and Wood & Company’s acquisition of a 760-apartment rental portfolio in southern Prague.

Hotels represented 4% of investment, with the Czech Republic accounting for 62% of hotel transactions across the five markets. A further 4% of regional investment was allocated to mixed-use properties.

A notable feature of the current recovery is the importance of capital originating within CEE itself. Czech investors deployed approximately €2 billion across the region during the first half of the year, equivalent to 36% of total commercial property investment. Domestic buyers accounted for 75% of investment in the Czech Republic, compared with 30% in Romania, 15% in Slovakia and 11% in Poland.

At the same time, the investor base is gradually becoming more international. Knight Frank reports renewed participation from US, Asian and South African capital alongside increasing Western European interest, including French SCPI funds.

The economic background could provide additional support during the remainder of the year. Poland’s GDP is forecast to grow by 3.7% in 2026, while Czech economic growth is projected at 2.2%. Knight Frank expects the major CEE economies covered by the report to be growing faster than both the EU and eurozone averages by 2027, although inflationary conditions continue to vary considerably between countries.

For the second half of 2026, Poland is expected to remain the principal source of regional transaction growth. Knight Frank forecasts approximately €6 billion of Polish commercial property investment for the full year, which would represent the country’s highest annual volume since the pandemic. Offices and retail are expected to contribute to the increase, while industrial property is forecast to maintain a significant share of activity.

The Czech market is expected to finish the year at close to €3 billion. Although below its exceptional 2025 result, this would remain above its longer-term average. Prague offices are expected to contribute more strongly during the second half, while industrial property and build-to-rent remain active investment segments.

Hungarian investment could exceed €1 billion for the year, supported particularly by office and retail transactions. Slovakia is expected to see some improvement following a relatively subdued first half, with industrial assets likely to contribute to activity. In Romania, the outlook has already been strengthened by AFI’s acquisition in July of six open-air shopping centres from MAS for almost €200 million, leading Knight Frank to expect 2026 investment to exceed last year’s level.

Pricing remains markedly different across the region. The report’s H1 prime yield comparison puts Czech industrial and office property at 5.00%, compared with 6.25% and 6.00% respectively in Poland. Hungary stood at 6.75% for industrial and 6.50% for offices, Slovakia at 6.00% for both categories, and Romania at 7.50% for industrial and 7.25% for offices. Prime shopping-centre yields ranged from 5.75% in the Czech Republic to 7.25% in Romania.

Knight Frank expects yields to remain broadly stable across most CEE markets and sectors while international investors gradually increase their presence. Regional capital, and Czech investors in particular, is nevertheless expected to remain an important source of liquidity. With investment already above €5.5 billion at the halfway point, the second half of 2026 will test whether the recovery can broaden beyond Poland and translate improving investor sentiment into higher transaction volumes across the rest of the region.

Panama Logistics Property Market Expands as Trade Supports New Supply

Panama’s warehouse and logistics property market has entered 2026 with expanding inventory, positive absorption and availability remaining close to 8%, as trade and distribution activity continue to support demand for modern industrial space. The market is benefiting from Panama’s position between major international shipping routes and from a logistics network connecting the Panama Canal, ports on both coasts, Tocumen International Airport, the Colón Free Zone, Panama Pacífico and the country’s principal road corridors.

The first-quarter figures indicate that additional warehouse development is being absorbed without producing a corresponding increase in available space. Newmark recorded approximately 1.87 million square metres of industrial and logistics inventory in the Panama City market at the end of the first quarter of 2026, up from around 1.76 million square metres a year earlier. Despite this expansion, availability declined from 8.79% to 8.30%.

Net absorption provides further evidence of underlying demand. Approximately 57,400 square metres was absorbed during the opening quarter of 2026, compared with around 31,800 square metres during the corresponding period of 2025. Average advertised rents increased moderately from USD 7.22 to USD 7.34 per square metre per month.

The combination of increasing inventory, higher absorption and slightly lower availability is significant. Rather than growth being driven primarily by a shortage of warehouses, new logistics space is entering the market while occupier demand remains sufficient to absorb much of the additional capacity.

A separate assessment of Class A industrial properties recorded occupancy of approximately 92.5% at the end of 2025, with around 87,660 square metres under construction and average rents close to USD 7.90 per square metre per month. Differences in geographical coverage and property classifications mean the datasets are not directly comparable, but both point towards relatively high occupancy alongside continued development.

Panama’s geography and transport infrastructure remain fundamental to this demand. The country combines the Canal with major container ports on the Pacific and Atlantic coasts, an international air cargo hub at Tocumen, the Colón Free Zone, Panama Pacífico and a network of logistics parks connected over comparatively short distances.

This allows the industrial property market to serve functions extending considerably beyond domestic consumption. Warehouses support regional distribution, re-export operations, inventory consolidation, third-party logistics, light industrial activity and the transfer of goods between maritime, road and air transport.

Activity through the Panama Canal provides an important indication of the wider trade environment supporting the sector. During the first nine months of the Canal’s 2026 fiscal year, covering October 2025 through June 2026, 10,726 vessels passed through the waterway compared with 10,191 during the corresponding period a year earlier, an increase of 5.2%.

By the end of June, the Canal was averaging approximately 35 transits per day. The figures confirm higher traffic compared with the corresponding period of the previous fiscal year following the water-related restrictions that had previously constrained capacity.

Activity at the Colón Free Zone provides another measure of the volume moving through Panama’s logistics economy. The zone handled approximately 841,700 tonnes of physical cargo during the first four months of 2026, an increase of 14.1% compared with the same period of 2025. Commercial activity increased by 7.2%, supported particularly by re-export operations.

The increase accelerated during April, when physical cargo volumes reached approximately 220,100 tonnes, more than 30% above the level recorded a year earlier.

These volumes have direct implications for the wider logistics network. Operations within the Colón Free Zone create requirements for storage, consolidation, transportation, distribution and supporting services across the Atlantic side of Panama and along the corridor connecting Colón with the capital.

The zone remains one of the region’s principal concentrations of international trading activity and forms an important part of Panama’s role as a redistribution platform serving Latin America and the Caribbean.

Further investment is also entering Panama’s free-zone economy. During March 2026, the National Free Zone Commission approved eight new operating licences and advanced plans for another free zone in Colón province. The associated projects represented more than B/.24.8 million in proposed investment and included activities connected with logistics, assembly and expanded business operations.

The expansion of companies operating within free zones can support additional requirements for warehousing, production and distribution property, depending on the nature and scale of their activities. It also reinforces the relationship between Panama’s investment framework and demand for specialised industrial real estate.

Location remains critical to the performance of individual properties. A substantial proportion of Panama’s warehouse stock is concentrated around the eastern and western approaches to Panama City, providing connections to the metropolitan consumer market, highways, airports and port infrastructure.

The eastern corridor represents one of the country’s established concentrations of industrial property, supported by access to Tocumen International Airport and the principal routes connecting Panama City with other parts of the country. The area is particularly relevant to distributors and logistics operators requiring access to both the metropolitan market and international air transport.

Panama Oeste has developed into another important logistics cluster, supported by road connections and access towards Pacific port infrastructure. The availability of larger development sites outside the central city also creates opportunities for modern logistics parks requiring substantial land for warehouses, loading areas and vehicle circulation.

Panama Pacífico occupies a distinct position within the market. The former military base has developed into a mixed business, industrial and residential district operating under a special economic regime and accommodating multinational companies, logistics operations, light industry and regional service activities.

The Colón corridor serves a different demand base, centred around Atlantic ports, the Free Zone and Canal-related activity. Together, these areas demonstrate why Panama’s logistics sector functions as a series of specialised clusters connected to different parts of the country’s transport infrastructure rather than as a single warehouse market.

The type of space demanded by occupiers is also evolving. International logistics companies, large distributors and regional supply-chain operators increasingly require buildings with greater clear heights, stronger floor loading, sufficient loading docks, large manoeuvring areas, reliable power, security and efficient highway access.

Automation and more sophisticated inventory systems are reinforcing these requirements. Warehouses designed primarily for basic storage can be less suitable for companies operating high-volume regional distribution networks, creating a growing distinction between modern logistics facilities and older industrial buildings.

This difference is likely to become increasingly important to both rents and occupancy. Newer logistics parks capable of meeting international operating standards are better positioned to capture sophisticated distribution requirements, while older properties may compete primarily through location and lower occupancy costs.

Rental movements remain relatively restrained. Newmark’s average advertised industrial rent of approximately USD 7.34 per square metre per month in the first quarter of 2026 compared with USD 7.22 a year earlier. This relative stability in asking rents suggests that the market is expanding without the severe shortage of space that would normally produce rapid rental increases.

For occupiers, availability around 8% represents a relatively balanced environment. Choice is more restricted than in Panama City’s office market, but the industrial sector is not experiencing an acute shortage of warehouse capacity.

For developers, the figures indicate that new projects need to compete on specification, location and connectivity rather than relying solely on limited existing supply. More than 100,000 square metres was added to Newmark’s monitored inventory between the first quarter of 2025 and the first quarter of 2026, yet availability remained below 9%.

The ability to expand inventory while maintaining relatively stable availability provides stronger evidence of occupier demand than falling availability alone.

Panama’s wider economy also remains supportive. The IMF expects real GDP growth of approximately 3.8% in 2026, while trade, transportation, logistics and financial services continue to play important roles in economic activity. Industrial property consequently benefits from both domestic consumption and Panama’s much larger role within international commerce.

With a relatively small domestic population, however, the long-term growth of the logistics property sector cannot depend solely on local retail and consumer demand. Its larger opportunity lies in Panama capturing a greater share of regional distribution, re-exporting, value-added logistics and multinational supply-chain activity.

That international exposure also introduces risks. Changes in global trade flows, shipping patterns and geopolitical conditions can affect cargo volumes and investment decisions, while the efficiency and reliability of Panama’s transport infrastructure remain essential to the competitiveness of logistics property.

Developments surrounding the concessions for the ports of Balboa and Cristóbal during 2026 illustrate this connection. Legal and political uncertainty concerning strategically important port infrastructure has implications beyond the terminals themselves because companies using Panama as a distribution platform depend on predictable movement between ports, warehouses, customs facilities and onward transport networks.

Operational efficiency is equally important. Panama’s transport, maritime and customs authorities have been working with freight organisations on measures intended to improve processes around ports, free zones and border facilities. Delays within these networks increase occupier costs and can reduce the advantages created by proximity to major transport infrastructure.

For investors, Panama’s warehouse sector therefore presents a different proposition from commercial property markets driven primarily by domestic business growth. Modern logistics assets positioned near established transport corridors can capture demand from distributors, importers, exporters, third-party logistics companies and multinational businesses operating regional supply chains.

The relatively low availability rate provides landlords with a stronger starting position, but not every industrial asset will benefit equally. Properties without efficient transport access, modern specifications or sufficient operational space may struggle to attract more sophisticated occupiers even if overall logistics activity continues expanding.

Development discipline will consequently remain important. Current market conditions support additional construction, but developers are already responding to demand. A pipeline that expands significantly faster than occupier requirements could push availability higher even while Panama’s overall logistics economy continues to grow.

The strongest projects are therefore likely to be those aligned with established transport infrastructure and identifiable occupier requirements rather than schemes dependent primarily on expectations of future market expansion.

For occupiers, 2026 remains comparatively balanced. Modern space continues to enter the market, asking rents have moved only moderately and new projects are expanding choice, while occupancy and absorption indicate sufficient demand to support continued development.

For investors and developers, the more important signal is that this additional inventory is being absorbed without destabilising the wider market.

Panama’s logistics property sector therefore enters the remainder of 2026 from a relatively strong position. Availability remains around 8%, absorption is positive and inventory continues to expand, while higher Canal traffic and increasing cargo volumes through the Colón Free Zone provide independent evidence of activity across the country’s wider logistics platform.

The market is neither experiencing an acute shortage of warehouses nor a period of rapid rental escalation. Instead, Panama is seeing a more structural expansion in which modern logistics property is developing alongside the country’s role as a regional distribution and transport hub.

As supply chains evolve, the strongest opportunities are likely to concentrate in facilities capable of doing more than providing basic storage. Properties with efficient access to ports, airports, highways and special economic zones, combined with specifications capable of supporting modern distribution operations, should be better positioned to capture demand.

For Panama’s industrial property market, the defining issue in 2026 is therefore not simply how much new warehouse space is being delivered, but whether that development strengthens the country’s ability to translate its strategic location and transport infrastructure into a larger role within regional and international supply chains.

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