Skanska JV secures USD 1.9 billion Los Angeles light rail contract

Skanska, together with joint venture partner Stacy Witbeck, has signed a major construction contract with the Los Angeles County Metropolitan Transportation Authority (LA Metro) for the East San Fernando Valley Light Rail Transit project in California.

The joint venture contract is valued at approximately USD 1.9 billion, with Skanska’s share amounting to USD 957 million, equivalent to around SEK 8.9 billion. Skanska will record its portion of the contract in its US order intake for the third quarter of 2026.

The project will deliver a 10.8-kilometre at-grade light rail corridor along Van Nuys Boulevard in the San Fernando Valley. The construction programme also includes 11 new stations, associated passenger facilities and utility works.

A significant component will be the development of a 10.5-hectare rail and maintenance facility, providing operational infrastructure for the new transit line.

The investment will extend Los Angeles County’s public transport network into densely populated communities along the Van Nuys Boulevard corridor. The new line will also connect with LA Metro’s existing G Line bus rapid transit service, improving links between the East San Fernando Valley and the wider regional transport system.

For the surrounding property market, the project represents a substantial long-term infrastructure investment in a heavily developed part of Los Angeles. Improved public transport accessibility along the corridor could support future residential and commercial development around station locations, although the information released by Skanska does not provide forecasts for development volumes or property values.

Construction work has already started, with completion currently scheduled for December 2031.

Poland’s Job Market Edges Higher as Construction and Logistics Hiring Strengthens

Poland’s recruitment market continued to improve in July, although the latest data suggest that the recovery remains gradual rather than signalling a broad acceleration in hiring.

The Barometr Ofert Pracy, which tracks changes in the number of employment advertisements published online, increased to 261.5 points in July 2026, compared with 261.1 points in June and 258.5 points a year earlier. The indicator has been rising since April, but the strength of the monthly increases has progressively weakened.

The survey is prepared by the Department of Economics and Finance at the University of Information Technology and Management in Rzeszów together with the Bureau for Investments and Economic Cycles (BIEC). It is based on online job advertisements collected each month and adjusted to remove seasonal effects, providing an indication of changes in employers’ demand for new workers.

The July results reveal increasingly different conditions between sectors. Recruitment in services is recovering, construction and engineering are showing stronger demand and logistics is improving, while vacancies for physical workers continue to decline.

Construction recruitment reaches four-year high

One of the clearest improvements is visible in construction.

Among occupations requiring scientific or engineering qualifications, vacancies increased across almost every category in July, with IT the exception. Construction recorded a particularly strong result, with the number of advertised positions reaching its highest level in four years.

Recruitment of engineers is also recovering. Following several years of declining vacancy numbers, demand has been gradually rebuilding and reached its highest level for two years following the latest increase.

For the property and infrastructure sectors, the figures point towards stronger competition for technically qualified employees as construction activity requires additional engineering and specialist capacity.

The improvement does not extend equally across the entire labour market. Vacancies for physical occupations declined again during July and have been following a clear downward trajectory since around the middle of 2024.

This divergence suggests that employers’ recruitment requirements are becoming increasingly specialised rather than simply expanding across all categories of labour.

Logistics hiring continues to recover

Logistics is another area showing clearer signs of strengthening demand.

The number of logistics vacancies has increased since April and reached its highest level since January 2024 in July. Recruitment in freight forwarding is also following an upward trend.

The figures are relevant to Poland’s industrial and logistics property sector because employment demand provides another indication of operating activity among companies occupying warehouses, distribution centres and transport facilities.

Services more broadly produced the largest increase in vacancies among the main occupational groups during July. Following more than a year of adjustment, recruitment in this part of the economy has been improving since the beginning of 2026, with July producing the highest number of advertisements since September 2024.

Tourism recruitment also strengthened, reaching its highest level in more than 18 months, while education recorded a double-digit monthly percentage increase in vacancies, although demand in the sector remained substantially below the level recorded a year earlier.

IT recovery remains fragile

Technology presents a more complicated picture.

Vacancies for both IT administration and programming declined in July, with the reduction somewhat greater among programmers. Nevertheless, the longer-term direction has improved modestly, with IT vacancies gradually increasing over approximately the past 18 months.

The recovery remains far from complete. Demand for IT workers is still significantly below the levels recorded before the economic disruption associated with the pandemic, with the gap particularly pronounced for programmers.

Meanwhile, within social-science and legal occupations, recruitment has been broadly stable since October 2025. July brought some improvement for call-centre employees, purchasing departments and lawyers, while vacancies declined for graphic designers, office workers and banking positions.

Regional differences remain substantial

The recovery is also uneven geographically.

After seasonal employment was excluded, online vacancies increased in most Polish regions during July. The strongest monthly increases were recorded in Warmińsko-Mazurskie, Podkarpackie and Śląskie, while the largest decreases occurred in Wielkopolskie, Zachodniopomorskie and Dolnośląskie.

At the same time, labour-market conditions are not improving across every measure. The seasonally adjusted registered unemployment rate increased by 0.1 percentage point in June to 6.1%, its highest level since May 2021, according to the report.

The combination of slightly higher unemployment and gradually increasing vacancies points towards a labour market undergoing structural adjustment rather than a straightforward hiring boom.

The report’s labour-market diagram on page three places July 2026 close to the boundary between improving qualifications and a stronger employment outlook, illustrating the relatively tentative nature of the current recovery.

For Poland’s property sector, however, the composition of hiring may be more important than the headline movement in the index. Increasing demand for construction specialists, engineers, logistics workers and freight-forwarding employees coincides with sectors directly connected to development, infrastructure and industrial real estate.

The July Barometr therefore points to a labour market moving forward slowly but becoming increasingly differentiated: employers are recruiting again in selected areas, while other occupations continue to face weaker demand. Construction and logistics currently stand out among the areas where that improvement is becoming most visible.

How Transit-Oriented Development Has Shaped Japan’s Real Estate Success

Japan has one of the world’s most advanced transit-oriented real estate markets, where transport infrastructure and property development have evolved together over many decades. Unlike many countries where railway stations are designed primarily as transport facilities, Japan has transformed them into vibrant urban centres that combine mobility, commercial activity, residential development and public spaces within a single integrated environment.

This close relationship between rail infrastructure and urban planning has helped create some of the most efficient and valuable real estate markets in the world. Private railway operators, public authorities and property developers have worked together to ensure that major stations become destinations in their own right rather than simply places where passengers begin or end a journey.

As cities around the world search for more sustainable models of urban growth, Japan’s transit-oriented development approach offers valuable lessons on how infrastructure investment can generate long-term economic and real estate value.

A Planning Model Built Around Rail

Transit-oriented development in Japan extends far beyond the construction of railway stations. It is based on the principle that transport, housing, commercial property, public amenities and urban planning should be developed as a single integrated system.

Rather than expanding cities through low-density suburban development, Japan has concentrated growth around railway stations, creating highly connected districts where people can live, work, shop and access public services within walking distance of public transport.

This integrated approach has produced neighbourhoods with high levels of accessibility, vibrant retail environments and efficient land use while reducing dependence on private vehicles.

The Ministry of Land, Infrastructure, Transport and Tourism has consistently promoted planning principles that encourage compact urban development, strong connectivity between transport modes, pedestrian-friendly environments and mixed land use around major stations.

Railway Companies Became Property Developers

One of the defining characteristics of Japan’s transit-oriented model is the role played by private railway companies. Unlike many countries where transport operators focus solely on running rail services, Japanese railway companies have long invested in residential communities, shopping centres, hotels, office buildings and entertainment facilities located along their rail networks.

This business model creates a mutually beneficial relationship between transport and real estate. Attractive developments increase passenger numbers, while reliable rail services raise property values and encourage further investment.

Many of Japan’s most successful urban districts have grown around this approach, with railway stations acting as anchors for long-term commercial and residential development rather than isolated transport hubs.

Station Districts Have Become Urban Centres

Station-area regeneration in Japan involves much more than modernising railway infrastructure. Redevelopment projects often transform entire neighbourhoods by integrating commercial, residential and public facilities into a single urban environment.

Major projects in cities such as Tokyo, Osaka, Yokohama and Nagoya combine office towers, retail centres, hotels, residential buildings, public plazas and extensive underground pedestrian networks directly connected to transport systems.

These developments maximise land value while creating highly accessible districts that support business activity, tourism and everyday urban life. The result is a more efficient use of limited urban land while strengthening the economic role of city centres.

As older districts undergo renewal, station-centred development continues to play an important role in maintaining the competitiveness of Japan’s largest metropolitan areas.

Supporting Sustainable Urban Growth

Japan’s transit-oriented development model also contributes to environmental sustainability and improved quality of life.

Concentrating homes, workplaces and services around railway stations reduces reliance on private vehicles, shortens travel distances and encourages greater use of public transport. Higher-density development also allows infrastructure and public services to be delivered more efficiently while limiting urban sprawl.

These benefits have become increasingly important as Japan addresses demographic change, ageing infrastructure and the need to create more resilient and environmentally sustainable cities.

The country’s geography also presents unique planning challenges. Frequent earthquakes and limited areas suitable for large-scale urban expansion make efficient land use particularly important. Transit-oriented development enables cities to maximise existing infrastructure while reducing the need for continuous outward expansion.

A Global Model for Urban Development

Japan’s success has attracted growing international attention, with many countries adapting elements of its planning approach. Cities across Asia, Europe and North America increasingly view transport infrastructure as a catalyst for wider economic development rather than simply a mobility project.

In countries such as India, transit-oriented development is becoming an important part of metro expansion strategies, where new stations are designed to stimulate commercial activity, residential development and mixed-use urban regeneration.

Although every city has different planning systems and market conditions, Japan demonstrates how coordinated investment in transport and real estate can generate long-term economic value while improving urban liveability.

Infrastructure That Creates Property Value

Japan’s transit-oriented real estate market illustrates how infrastructure can become a powerful driver of property development when supported by long-term planning and coordinated investment.

By treating railway stations as centres of economic activity rather than simply transport facilities, Japan has created urban districts where mobility, commerce, housing and public life reinforce one another. This integrated approach has strengthened property markets, supported sustainable urban growth and produced some of the world’s most successful examples of infrastructure-led development.

As governments continue investing in transport networks to support economic growth and climate objectives, Japan’s experience demonstrates that the greatest value often comes not from the railway itself, but from the communities, businesses and real estate that develop around it.

Source: © CIJ.World Japan Research & Analysis Team

Croatia proposes 50% levy on exceptional 2026 corporate profit margins

Croatia is considering a temporary tax targeting unusually high corporate profit margins as the government looks for additional measures to contain inflation and discourage price increases that cannot be explained by underlying business conditions.

Under draft legislation published by the Ministry of Finance, qualifying companies could face a 50% tax on the portion of their profit margin considered excessive. The measure is currently designed to apply only to the 2026 tax year and has not yet been adopted by parliament.

The proposal would apply to medium-sized and large companies subject to Croatian corporate profit tax where more than half of their revenue is generated in Croatia. Newly established companies submitting their first corporate profit tax return would be excluded.

Rather than imposing the levy simply on companies reporting higher profits, the proposed system would compare their profitability with their own recent performance.

A company’s 2026 margin would be measured against its average margin during the three preceding tax periods from 2023 to 2025. The additional tax would become relevant where the 2026 margin exceeds that three-year average by more than 15%.

This approach means that the measure could affect businesses differently depending on their historical profitability. Companies that already operated with relatively high margins during the reference period would consequently have a different threshold from businesses whose margins were traditionally lower.

The calculation would also seek to separate ordinary operating performance from exceptional accounting effects. Certain revenue and expense items that do not represent the company’s underlying business would be removed when determining the relevant margin. These include items associated with disposals of non-current assets, depreciation and financial income and expenses.

According to the draft, the intention is to concentrate the levy on profitability generated through regular business activities rather than gains resulting from one-off transactions or accounting movements.

The legislation also provides a mechanism intended to prevent the same profit from being taxed twice through both the normal Croatian corporate profit tax system and the proposed exceptional-margin levy.

The measure represents an unusual attempt to use corporate taxation as part of Croatia’s response to inflation. Rather than introducing general price controls, the government proposal would create a financial disincentive for larger domestically focused companies to allow margins to rise substantially above their recent historical levels.

For companies operating in sectors where costs, selling prices or margins have changed significantly since 2023, the calculation could become particularly important. Businesses potentially falling within the scope of the legislation would need to examine not only expected 2026 earnings but also the composition of revenues and expenses used to establish their reference profitability.

The proposal remains subject to change.

Public consultation is scheduled to continue until 30 August 2026, after which the Ministry of Finance can amend the draft before submitting legislation to the Croatian Parliament.

If approved, the legislation is expected to enter into force eight days after publication in Croatia’s Official Gazette. More detailed procedural rules would subsequently be introduced through implementing regulations within 90 days.

For investors and companies active in Croatia, the immediate issue is therefore not an additional tax already in force, but the potential introduction of a significant new liability for 2026. Medium-sized and large businesses generating most of their income domestically may need to model the impact against their 2023-2025 margins while monitoring changes to the proposal during the legislative process.

Source: CMS

NEPI Rockcastle enters Spain with €252 million acquisition of MegaPark Barakaldo

NEPI Rockcastle is expanding beyond Central and Eastern Europe for the first time with the acquisition of MegaPark Barakaldo in the Bilbao metropolitan area, marking the retail property group’s entry into the Spanish market.

The company has agreed to acquire the shopping, outlet and leisure destination from Le Retail Hiper Ondara S.L.U., part of HLRE Socimi, for net cash consideration of €252 million. The gross purchase consideration is €254 million, payable on completion.

The transaction represents a significant geographic step for NEPI Rockcastle. Until now, the group’s portfolio has been concentrated in Central and Eastern Europe, where it has built its position through acquisitions, development, active management of shopping centres and investment in renewable energy.

MegaPark Barakaldo provides approximately 81,000 sqm of gross lettable area and comprises three separately operated elements covering conventional retail, outlet shopping, and leisure and food and beverage uses. The destination serves an estimated catchment of around 1.1 million people across the wider Bilbao metropolitan area.

Developed between 2004 and 2006, the property has established itself as one of the larger retail and leisure destinations in northern Spain. According to information accompanying the transaction, the asset has maintained high occupancy while recording growth in both visitor numbers and tenant sales.

Marek Noetzel, CEO of NEPI Rockcastle, said the acquisition gives the group an established position in one of Spain’s stronger regional economies rather than requiring it to build a presence from the ground up.

“MegaPark Barakaldo gives us a strong foothold in one of Spain’s most dynamic regions — already a dominant destination for its catchment, with visitor numbers and sales both gaining momentum,” Noetzel said.

While Spain represents new territory for the company, NEPI Rockcastle already owns and manages retail properties across eight European countries. Noetzel said the group intends to apply the operating experience developed across those markets to the Bilbao asset.

The acquisition also provides scope for further investment in the property rather than functioning solely as a passive addition to the portfolio.

Anca Nacu, Chief Investment Officer at NEPI Rockcastle, said MegaPark’s scale, tenant structure and catchment provide several opportunities for further value creation. The company plans to use its asset-management and development capabilities to strengthen the destination following completion of the transaction.

The choice of Bilbao also gives NEPI Rockcastle exposure to the Basque Country, one of Spain’s more affluent regional economies. The Bilbao metropolitan area has close to one million inhabitants and benefits from a comparatively strong economic and industrial base.

Retail property conditions were another factor behind the investment. According to CBRE data cited by NEPI Rockcastle, occupier demand in the Spanish retail market stands at 94.3%, while the availability of competing new supply remains constrained. Northern Spain in particular has relatively significant planning barriers, which can strengthen the competitive position of established large-scale destinations.

The deal is therefore more than another shopping-centre acquisition for NEPI Rockcastle. It represents the first test of whether the investment and operating model the company has developed across CEE can be successfully transferred into Western European markets.

The move does not signal an abandonment of its existing regional strategy. NEPI Rockcastle continues to identify itself primarily as the largest shopping-centre owner, operator and developer in CEE, while combining acquisitions with development and investment in renewable-energy infrastructure.

However, the €252 million commitment to Bilbao establishes a precedent for geographic diversification. If the Spanish investment performs in line with expectations, it could provide the group with a platform for considering further opportunities outside its traditional Central and Eastern European footprint.

CBRE, Uría Menéndez, Almar Consulting and IDEA advised NEPI Rockcastle on the acquisition. Cushman & Wakefield advised the seller.

GN Group takes more than 30,000 sqm at Panattoni’s Kladno brownfield development

Danish audio and communications technology company GN Group has selected Panattoni Business Park Kladno for a new operational centre of more than 30,000 sqm, adding another international occupier to the redevelopment of the former Poldi industrial complex.

The purpose-built facility is scheduled for completion in the second quarter of 2027. Panattoni is developing the project, while investment group RSJ is providing the financing.

Around 28,000 sqm will be dedicated to operational activities, with a further 2,000 sqm allocated to offices. The building is being designed specifically around GN’s requirements and is intended to accommodate greater use of automation, artificial intelligence and new operational technologies over time.

GN Group, headquartered in Denmark, operates internationally across audio, video and gaming technologies. Its portfolio includes Jabra, focused on professional communications and audiovisual products, and gaming equipment brand SteelSeries.

Stefan Bergfors, Chief Operating Officer of GN Group, said the Kladno project represents more than a relocation of existing operations, with the company using the move as an opportunity to redesign its processes around future technologies.

“The design already takes future automation, artificial intelligence and advanced operating methods into consideration, creating a foundation for innovation, higher productivity and further growth,” Bergfors said.

Louise Juul Østergaard, Head of Regional Operations at GN Group, said the location was selected following an extensive assessment and would provide additional capacity and flexibility while maintaining proximity to customers across Europe.

The investment also represents another stage in the regeneration of the former Poldi Kladno industrial site, historically one of the Czech Republic’s best-known heavy-industry locations.

Jan Andrejco, Regional Development Director at Panattoni, said GN’s decision demonstrates the potential for former industrial land to compete for major international occupiers once environmental and redevelopment issues have been addressed.

According to Andrejco, land that was previously underused and affected by its industrial legacy is being transformed into a modern business location capable of generating new economic activity for the Kladno region.

RSJ has also been involved in several Czech brownfield regeneration investments. Lukáš Musil, member of the investment group’s board, said the arrival of GN provides further evidence that the former Poldi site is recovering its attractiveness as an industrial location.

The new GN facility will use heat pumps and is targeting a high-level BREEAM New Construction sustainability certification. The measures form part of Panattoni’s broader approach to reducing building energy consumption and operational emissions.

Location is another important element of the investment. Panattoni Business Park Kladno lies around 30 km from Prague and has access to the D5, D6 and D7 motorway corridors, providing connections towards Prague, western Czechia and Germany.

The Kladno-Švermov railway stop is within walking distance of the site, providing public transport access for employees. Longer term, the planned rail modernisation connecting Prague, Václav Havel Airport and Kladno is expected to further improve the area’s accessibility.

The GN lease adds to a wider shift in Czech industrial development towards the reuse of former manufacturing sites. For developers, brownfields can provide large sites close to established population centres and existing infrastructure, while municipalities gain the prospect of returning previously obsolete industrial land to productive use.

For Kladno, the transaction is particularly symbolic. A site historically associated with steelmaking and heavy industry is increasingly being repositioned for a new generation of manufacturing, logistics and technology-related businesses, with GN’s 30,000 sqm facility becoming one of the latest investments in that transformation.

AI vendors could face fraud claims as disputes over exaggerated capabilities emerge

Businesses that bought generative artificial intelligence systems on the strength of overstated claims about their capabilities could eventually seek compensation through fraud-based legal actions, according to an analysis by CMS lawyers Lee Gluyas and Jonathan Gardner.

The issue is emerging as organisations gain more experience with large language models and discover that systems capable of producing highly convincing material can still generate incorrect information, invented references and unsupported conclusions.

The legal profession has provided some of the most visible examples. Lawyers have faced criticism and, in some cases, judicial action after AI-assisted submissions included fictitious cases or authorities. Gluyas and Gardner point to nearly 1,900 reported instances globally involving hallucinated legal cases, arguing that similar problems are likely to become more visible in other professional sectors as AI adoption expands.

The potential commercial dispute, however, may increasingly concern not simply whether an AI system produced an incorrect answer, but what customers were told about the technology before buying it.

Generative AI systems are designed to generate responses based on patterns learned from large quantities of data. Their ability to produce authoritative-sounding language does not mean every statement has been independently checked. Citations can be incorrect, sources may not exist and apparently confident conclusions can require external verification.

For corporate buyers, that distinction could become significant where software was purchased after suppliers or advisers made ambitious claims about productivity, reliability or the range of work that could safely be automated.

The CMS analysis identifies several areas that could create legal exposure, including overstating a product’s capabilities, minimising known limitations, recommending applications beyond what the technology can reliably perform or failing to correct an important misunderstanding during the sales process.

Such questions could become particularly relevant where companies made substantial operational decisions based on anticipated AI productivity gains. Some businesses have already reconsidered workforce strategies after finding that automation did not deliver the expected results or still required significant human supervision.

However, poor AI performance by itself would not normally establish that a vendor is liable.

Software agreements commonly contain extensive limitations of liability, disclaimers and contractual provisions governing statements made before an agreement was signed. These protections can make conventional claims against technology suppliers difficult, particularly where sophisticated companies negotiated the contracts.

Fraud represents a potentially different route because English law does not allow a party to contract out of liability for its own fraud.

If a customer could demonstrate that it entered an agreement because of fraudulent representations concerning an AI product, the potential financial consequences could therefore extend beyond ordinary contractual remedies. Depending on the circumstances, damages could potentially include licence expenditure and additional losses caused by reliance on the misleading representation.

Proving such a case would nevertheless be difficult.

A claimant would generally need evidence showing that a representation was false, that the relevant person knew it was false or was reckless as to whether it was true, and that the customer relied upon it. Marketing language alone would therefore not automatically establish fraud.

One area likely to receive greater attention is implied representation — where the dispute concerns what a vendor’s conduct or statements effectively communicated rather than an explicitly false sentence in marketing material.

Gluyas and Gardner draw a comparison with litigation involving complex financial products, where claimants have sometimes relied on implied representations when contractual protections made other avenues for compensation difficult.

They highlight the English High Court’s 2023 decision in Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd and others. The proceedings included allegations concerning implied representations about honesty and the characteristics of loans underlying residential mortgage-backed securities. The case also illustrates that constructing such an argument does not guarantee that it will succeed.

For the AI industry, the broader issue could therefore become the difference between legitimate promotion of rapidly developing technology and representations that materially exceed what vendors knew their products could reliably deliver.

Warnings supplied with AI systems will also matter. Providers increasingly state that generated information can contain errors and should be independently checked. Where customers received clear warnings but nevertheless relied on AI output without verification, establishing responsibility on the supplier’s side could become considerably harder.

The question is particularly important for professional services, finance, property, healthcare and other industries where AI-generated information can influence decisions involving significant financial or legal consequences.

As enterprise adoption grows, due diligence on AI procurement may consequently need to move beyond functionality and price. Buyers may increasingly need records of demonstrations, sales presentations, capability statements, accuracy claims and discussions about intended applications alongside the final software contract.

The next phase of AI litigation may therefore focus less on whether large language models sometimes make mistakes, something now widely recognised, and more on whether customers were given an accurate picture of those limitations when they decided to buy and deploy the technology.

Source: CMS

Asian occupiers add new momentum to Europe’s logistics property market

European logistics property markets showed further signs of stabilisation during the first half of 2026, with Asian companies becoming an increasingly important source of warehouse and industrial demand across several countries, according to the latest GARBE PYRAMID MAP.

The research covers 122 logistics submarkets across 25 European countries and points to a market in which rental levels are proving relatively resilient despite geopolitical uncertainty, higher energy costs and changing expectations for interest rates.

One of the more significant changes identified by GARBE is the growing role of Chinese and other Asian companies establishing logistics and production infrastructure directly in Europe. Demand is coming not only from e-commerce operators, but increasingly from businesses connected with batteries, electric vehicles and semiconductor supply chains.

The shift reflects a broader restructuring of how Asian companies serve European customers. Instead of relying predominantly on international parcel shipments and a limited number of European distribution points, some businesses are holding more inventory within Europe and building regional supply networks.

“In an ever larger number of European markets, Chinese companies are quickly becoming an autonomous driver of demand for warehouse space,” said Tobias Kassner, Head of Research and Member of the Executive Board at GARBE Industrial.

According to GARBE, Poland is particularly exposed to this trend through e-commerce. After relatively subdued letting activity last year, the sector has contributed to stronger take-up during 2026, with Asian occupiers responsible for part of the increase.

Germany, France and the UK are also attracting enquiries connected with e-commerce distribution. Existing buildings that can be occupied relatively quickly are particularly attractive to this group of tenants.

The Rotterdam-Duisburg-North Rhine-Westphalia corridor remains important for distributing goods into Germany and the wider European market. In the Netherlands, proximity to major ports is also supporting requirements associated with batteries and energy storage, while UK enquiries include both battery-related facilities and companies considering more localised manufacturing and supply chains.

GARBE cautions, however, that these trends differ considerably between countries and should not yet be interpreted as a uniform European shift.

Vacancy begins to stabilise as speculative development slows

The additional occupier activity is beginning to affect availability, although it has not produced widespread rental increases.

After vacancy increased in several European logistics markets as projects completed into weaker leasing conditions, GARBE sees evidence that the situation is starting to stabilise. Existing space is being absorbed in some locations while developers have become more cautious about starting speculative schemes.

The result is a more balanced relationship between new construction and occupier demand than during the earlier adjustment period.

Defence-related investment could provide another source of industrial and logistics demand over the longer term. GARBE expects the effect to develop gradually because major European defence programmes will take time to translate into property requirements. Some activity may also remain difficult to identify because of confidentiality or because requirements are recorded within other industrial categories.

Prime logistics rents average €7.52 per sqm

Rental movements during the first six months of 2026 illustrate the increasingly differentiated nature of the European market.

Of the 122 locations monitored by GARBE, prime rents were unchanged in 79. Another 29 recorded increases, while rents declined in 14 markets.

Average prime rent across the surveyed locations stood at €7.52 per sqm per month at the end of June.

Rental growth was concentrated mainly in tighter markets in Northern, Western and Southern Europe. Many Central and Eastern European locations recorded little movement, with some experiencing modest decreases.

Investment pricing moved in a somewhat different direction.

Prime net initial yields increased in 62 of the markets covered, remained unchanged in 51 and compressed in only nine. Across the survey, yields moved outwards by an average eight basis points during the first half, reaching an average of approximately 5.6%.

The movement reverses part of the yield compression recorded during the second half of 2025.

GARBE attributes the change principally to geopolitical uncertainty, energy prices and altered expectations surrounding interest rates rather than a fundamental weakening of investor interest in logistics property.

Spain and secondary UK markets move up the investment map

Spain and selected regional UK markets currently offer some of the more favourable combinations of rental growth and improving investment pricing identified by GARBE.

Barcelona recorded a €0.20 per sqm increase in prime rents during the first half while prime yields compressed by ten basis points. Zaragoza registered rental growth of €0.10 per sqm alongside a 20-basis-point reduction in yields.

Newcastle followed a similar pattern, with rents increasing by €0.20 per sqm and yields tightening by ten basis points.

This represents a change from 2025, when some of Germany’s largest logistics markets offered a particularly strong combination of rental and yield movements.

Munich and central Berlin nevertheless continued to record significant rental growth. Prime rents increased by 6.9% in Munich and 3.3% in Berlin City compared with the end of 2025.

Over five years, GARBE calculates average annual rental growth of 15.3% in Munich and 13.1% in central Berlin. Conditions on Berlin’s outskirts have been less tight because occupiers have a larger selection of available warehouse space.

The findings suggest Europe’s logistics market is moving away from the broad repricing phase that followed the interest-rate shock and towards a more location-specific cycle. Rental performance, investment yields and occupier demand increasingly depend on local supply conditions and the industries driving requirements.

At the same time, the expansion of Asian e-commerce, technology and manufacturing companies is adding another dimension to European logistics demand. If the localisation of inventories and supply chains continues, requirements from Asian occupiers could become an increasingly important influence on development and leasing strategies in Poland, Germany, the Netherlands, France, the UK and other major distribution markets.

Poland’s retail stock passes 14 million sqm as retail parks dominate development

Poland’s modern retail market continued to expand during the first half of 2026, with more than 200,000 sqm of new space taking total stock above 14 million sqm, according to Colliers. Development remains heavily concentrated in retail parks, particularly in smaller cities and around the edges of the country’s largest metropolitan areas.

By the end of June, Poland had 738 modern retail properties, while market density reached approximately 374 sqm per 1,000 inhabitants.

Development accelerated during the second quarter, when almost 150,000 sqm was added. Ten new properties opened and seven existing schemes were extended during the period, with every project delivered in the retail park format.

The pipeline indicates that this pattern will continue. More than 600,000 sqm is currently under construction, according to Colliers, and retail parks represent approximately 95% of that volume. Most of the space is scheduled for completion during 2026.

Smaller cities accounted for a significant proportion of recent development. Almost 60% of the new retail space completed during the first half was delivered in cities with fewer than 100,000 residents.

Among the largest openings were BIG Dzierżoniów, with 16,800 sqm, and M Park Zawiercie, providing 15,500 sqm.

Developers are also targeting satellite locations around Poland’s major cities. Recent projects have been delivered in Niepołomice near Kraków, Kosakowo in the Tricity metropolitan area and Ozorków around Łódź. The Stara Papiernia retail complex in Konstancin-Jeziorna, outside Warsaw, also completed an extension in June.

Further suburban developments are planned, including the approximately 23,000 sqm Świderek project in Otwock and new retail properties in Pruszcz Gdański.

Another part of the development cycle involves the conversion of older shopping centres, particularly properties originally designed around large hypermarket anchors.

During the second quarter, the former Glinki shopping centre in Bydgoszcz was redeveloped into the approximately 16,000 sqm Comfy Park. Similar conversions are under way in Kalisz and Rybnik.

Europa Centralna in Gliwice is also undergoing significant redevelopment. Following demolition works, the former shopping-centre format is being replaced with a retail park that will provide approximately 10,000 sqm.

Wojciech Wojtowicz, Senior Analyst in Colliers’ Market Insights department, said the redevelopment of former hypermarket-led schemes remains an important feature of the market, with further conversions expected before the end of the year.

At the same time, Poland is seeing some older shopping properties disappear entirely as land is redirected towards other uses. Demolition of Arkady Wrocławskie is under way, while a shopping centre in Gdańsk’s Chełm district closed at the end of June.

Further closures or withdrawals have been announced for properties including Galeria Bemowo in Warsaw, Alfa Centrum in Gdańsk and Krokus in Kraków.

International brands continue to test the Polish market

Retailer expansion is continuing alongside the development pipeline.

Several brands made their Polish physical-store debuts during the second quarter. The Leather Trading Company and Ksisters opened at Złote Tarasy in Warsaw, while Danish retailer Søstrene Grene entered Westfield Arkadia.

The area around Arkadia also gained Poland’s first PadelCity courts, illustrating the increasing integration of leisure concepts with established retail destinations.

At the premium end of the market, Swiss watchmaker IWC Schaffhausen opened its first Polish boutique at Plac Trzech Krzyży in Warsaw in cooperation with W.Kruk.

Trussardi, meanwhile, returned to Poland after a three-year absence through an outlet store at Designer Outlet in Piaseczno.

Marta Cegielnik, Co-Managing Director of Retail Agency at Colliers, said Poland continues to attract concepts ranging from value retail and fast food through to premium and luxury brands.

Warsaw’s strongest shopping centres remain the preferred starting point for many international entrants, although some operators are increasingly testing regional cities first. Recent examples include food concepts iLunch and Burgermeister, while fashion brand kay/day entered Poland through Kraków in July.

Outlet centres are also continuing to provide a route into the country for returning international brands.

Sport, wellness and leisure gain importance in tenant mixes

Poland’s expanding retail park market is also changing the type of occupiers developers are seeking.

Fitness, sport and recreational operators are taking a larger role as landlords attempt to broaden schemes beyond conventional shopping.

KNOX opened a 420 sqm high-intensity interval training studio at Fabryka Norblina, while San Padel joined the Mysiadło retail park. Xtreme Fitness opened locations including new facilities in retail parks in Bydgoszcz and Ozorków, and Zdrofit added a gym at the Kłobucka Street retail park in Warsaw.

Centrumrowerowe.pl joined M1 Zabrze and Comfy Park Bydgoszcz, while Decathlon expanded its store at Galeria Bronowice in Kraków.

Anna Radecka-Łysiak, Co-Managing Director of Retail Agency at Colliers, said increasing competition means developers can no longer rely primarily on location, accessibility and the size of the local population to differentiate new retail parks.

Tenant composition is becoming more important, combining everyday retail with destination operators such as DIY, home furnishings and drive-through restaurants, while sport, wellness, recreation and educational-entertainment concepts are increasingly being used to distinguish individual projects.

Architecture and the quality of common areas are also gaining importance as the retail park format develops beyond its earlier emphasis on relatively simple, convenience-led properties.

Discount and off-price retailers remain another source of expansion. TK Maxx, for example, opened new stores during the second quarter at Galeria Kazimierz in Kraków and Pasaż Grunwaldzki in Wrocław.

The first-half figures point to a Polish retail development market that remains active but is changing considerably in structure. Rather than another cycle dominated by large enclosed shopping centres, most new construction is being directed towards smaller retail parks, suburban catchments and regional cities.

With more than 600,000 sqm still under construction and 95% of that pipeline represented by retail parks, the format is set to strengthen its position further during the second half of 2026. At the same time, the conversion and removal of ageing shopping centres suggests that growth in Poland’s overall retail stock is increasingly occurring alongside a broader restructuring of the country’s existing retail property base.

Bucharest’s prime office shortage pushes central rents higher as leasing remains selective

Bucharest’s office market is becoming increasingly divided between modern buildings in established business districts and older or peripheral stock, with limited availability in the most sought-after locations supporting rental growth despite relatively restrained leasing activity.

More than 100,000 sqm of office space was leased in the Romanian capital during the first half of 2026, slightly below the corresponding period of 2025, according to Colliers. However, the shortage of suitable space in central locations is allowing owners of stronger assets to increase rents and gain greater leverage in negotiations.

Asking rents for existing offices in the Central Business District and other central locations reached around €18 per sqm per month at the end of June, compared with approximately €16 a year earlier, representing an increase of close to 12%. Across Bucharest as a whole, rental growth was considerably more moderate at around 3%.

The pressure is also becoming visible in the development pipeline. Offices currently under construction are being marketed at rents around 10–15% above levels normally associated with their respective submarkets.

Victor Coșconel, Partner and Head of Leasing, Office & Industrial Agencies at Colliers, said the combination of relatively modest transaction volumes and rising rents reflects a shortage of the type of accommodation that companies actually want.

Businesses continue to prioritise efficient, modern offices with good transport connections and central locations, while the number of buildings capable of satisfying those requirements has been declining.

This imbalance is particularly visible in vacancy figures. Bucharest’s overall vacancy rate increased from 11.75% at the end of 2025 to 12.25% by mid-2026, but much of the additional available space is concentrated outside the strongest office districts.

Vacancy in the Central Business District remains at approximately 4%, with the highest rents reaching €24 per sqm per month, up from €22 at the end of 2025. Floreasca-Barbu Văcărescu has vacancy of around 5%, while Pipera stands at approximately 40%.

The figures illustrate why the headline vacancy rate increasingly provides an incomplete picture of occupier choice. Large amounts of technically available office space do not necessarily compete directly with newer buildings in locations preferred by major corporate tenants.

Development pipeline begins to recover

Supply remains one of the most important constraints. Bucharest recorded no new office completions during the first half of 2026, following a full year without deliveries in 2025.

Development activity is beginning to restart, with slightly more than 50,000 sqm expected to complete during 2026 and almost 300,000 sqm currently under construction for delivery over the coming years.

Even this pipeline remains substantially below previous development cycles, when annual completions could exceed 200,000 sqm.

A further complication for occupiers is that portions of upcoming developments are already involved in pre-leasing discussions. Colliers therefore expects the availability of larger blocks of high-quality space to remain constrained at least through 2027.

Coșconel said companies with leases expiring during the next two years should begin evaluating their options early, as delaying decisions could leave occupiers with fewer alternatives and potentially higher costs.

Demand broadens beyond technology

There are nevertheless some signs of improvement on the demand side.

Transactions representing genuinely additional occupancy increased slightly during the first half, while Colliers reports enquiries from companies considering new leases and from businesses entering Romania, including Western European service centres seeking several thousand square metres.

Technology companies are also becoming somewhat more active following the recent slowdown. IT&C represented approximately 31% of Bucharest leasing during the first half of 2026. That compares with around 20% during 2025, although the sector remains considerably less dominant than in 2019, when it generated more than half of leasing activity.

Demand is consequently becoming more diversified. Financial services, energy, construction, professional services and consumer-goods businesses each accounted for approximately 8–9% of first-half leasing.

Changing workplace policies could provide another source of demand. Colliers observes that many businesses outside the technology sector increased required office attendance from one or two days a week to three during 2025, with some employers now considering four-day attendance policies. Technology companies generally continue to operate more flexible hybrid models.

Newer buildings gain an operating-cost advantage

The competition between newer and older offices is also moving beyond headline rent.

Service charges in modern Bucharest offices typically stand at approximately €3.50–€4 per sqm per month, according to Colliers, compared with more than €5 in some older properties.

Greater energy efficiency and more effective building management can therefore partially compensate occupiers for higher base rents. This is increasing pressure on owners of ageing buildings to invest in refurbishment, energy performance and repositioning if they want to remain competitive.

The trend is particularly important as tenants become more selective about the overall cost and performance of their workplaces rather than simply comparing nominal rents.

Bucharest reflects wider CEE supply squeeze

Similar conditions are developing across the major Central and Eastern European office markets.

Colliers’ ExCEEding Borders Office 2026 analysis covering Bucharest, Warsaw, Prague, Budapest, Bratislava and Sofia puts their combined modern office stock at approximately 22.1 million sqm at the end of 2025, with leasing activity of around 2.6 million sqm.

Only slightly more than 200,000 sqm of new offices was completed across the six capitals during 2025, according to the report. Around 300,000 sqm is expected in 2026, still considerably below levels associated with previous development cycles.

The shortage is contributing to upward pressure on prime rents across the region while reinforcing the divide between the strongest buildings and less competitive stock.

For Bucharest, Colliers expects overall leasing during 2026 to remain broadly comparable with last year. The more important change may instead be occurring within the composition of the market: companies are concentrating demand on a smaller pool of efficient, centrally located offices at the same time as development remains restrained.

That combination is creating a market in which an overall vacancy rate above 12% can coexist with shortages in the locations most sought after by occupiers. For owners of prime buildings, this is strengthening pricing power; for landlords of older properties, it increases the urgency of investment and repositioning.

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