Warsaw office squeeze forces companies to make property decisions earlier

Warsaw’s office market is entering a period in which access to high-quality space, rather than simply rental cost, is becoming a central issue for corporate occupiers. Strong leasing activity, falling vacancy in central districts and a historically limited development pipeline are encouraging companies to begin planning relocations and lease renewals much earlier.

The change is particularly evident among larger occupiers seeking modern offices in central Warsaw. Although the capital still had roughly half a million square metres of vacant office accommodation at the end of June, availability is unevenly distributed and a significant proportion is outside the locations and building categories preferred by major companies.

Warsaw’s overall office vacancy rate fell to 8.5% at the end of the first half of 2026. In central locations it was considerably tighter at 4.8%, while availability around Rondo Daszyńskiego dropped to approximately 3.6%. Outside the centre, vacancy remained substantially higher at around 11.8%, illustrating the growing difference between prime and secondary parts of the market.

This increasingly divided market means that headline vacancy figures can overstate the amount of space that is realistically available to companies requiring large, modern and centrally located offices.

Leasing activity rebounds strongly

Occupier activity accelerated sharply during the second quarter.

Total Warsaw office take-up reached approximately 420,000 sqm during the first six months of 2026, an increase of 38% compared with the same period last year. Net take-up amounted to around 220,000 sqm.

The figures nevertheless require some qualification. Renewals accounted for a substantial proportion of transactions, meaning the increase in gross leasing does not represent an equivalent expansion in the amount of office space occupied by companies.

Several large transactions contributed to the first-half result, including Frontex renewing approximately 21,500 sqm at Warsaw Spire B, Visa Europe taking around 17,300 sqm at The Bridge and Poczta Polska renewing approximately 17,000 sqm at Domaniewska Office Hub. Business services, finance and technology companies were among the most active occupier groups.

For landlords, renewals are nevertheless important because companies remaining in their existing premises prevent substantial blocks of space from returning to the market.

Development slowdown limits alternatives

The greater concern for occupiers is the amount of new space approaching completion.

Warsaw had approximately 130,000 sqm under construction across five principal office projects at the end of June. CBRE puts total modern stock at almost 6.24 million sqm, meaning the current construction pipeline represents only a small addition to the existing market.

Around 45,200 sqm of new and refurbished space had been delivered during the first half according to CBRE, while AXI IMMO places first-half additions at approximately 50,000 sqm depending on methodology. Both datasets point to the same underlying trend: development activity remains unusually subdued.

More than 90% of the space currently being developed is concentrated in central Warsaw.

The shortage is also being reinforced by what is happening to the existing stock. Older offices are increasingly being withdrawn for refurbishment, redevelopment or conversion to other uses. Warsaw’s total modern office inventory consequently declined slightly during the second quarter despite new projects reaching completion.

With office developments requiring several years from preparation to delivery, projects beginning today cannot provide an immediate solution. This creates the prospect of continued competition for the strongest buildings even if development activity begins recovering.

Tenants rethink when negotiations should begin

These conditions are changing corporate property strategies.

Starting a headquarters search approximately one year before an existing lease expires can leave a large occupier with relatively few realistic relocation alternatives. Companies with substantial space requirements increasingly need to evaluate options several years ahead, particularly where they want new or recently completed offices in central locations.

Michał Gliński, Managing Partner at Wardyński i Wspólnicy, argues that additional preparation time is also important from a legal perspective. Beginning negotiations earlier gives occupiers greater opportunity to structure lease provisions around future requirements rather than accepting compromises because an existing agreement is approaching expiry.

For major tenants, this can include negotiating expansion rights, renewal options, indexation provisions, service-charge arrangements, subletting flexibility, termination mechanisms and the treatment of fit-out expenditure.

The consequences of waiting become greater as availability declines. A company approaching expiry without a credible alternative building can find that remaining with its existing landlord is effectively its only operationally practical option.

Prime rents respond to scarcity

The reduction in central vacancy is also feeding through to rents.

Prime central headline rents are generally being reported at approximately EUR 24–29 per sqm per month, while asking rents for selected premium buildings can reach around EUR 32 per sqm.

The distinction between asking and effective rents remains important. Incentives, fit-out contributions, rent-free periods and other commercial conditions can substantially alter the eventual occupancy cost.

Nevertheless, the direction of travel is clear. Landlords controlling modern space in the strongest locations have greater negotiating leverage than owners of older properties or buildings outside the centre.

This makes Warsaw increasingly a two-speed office market rather than a citywide landlord’s market. Companies prepared to consider secondary locations still have significantly more choice, while competition is becoming considerably stronger for premium central properties.

Ownership emerges as another headquarters option

The shortage of suitable rental opportunities is also making building ownership worth considering for some occupiers.

Recent Warsaw transactions have demonstrated that smaller office properties can provide an alternative for organisations with sufficient capital and a long-term requirement for headquarters or specialist facilities.

WB Electronics, for example, acquired Mokotowska Square after previously being a major occupier of the approximately 8,600 sqm property. Other buildings have been acquired for corporate or institutional use, including properties intended for educational and operational functions.

Ownership can remove exposure to future lease negotiations and provide considerably greater control over refurbishment and building operations. It also changes the financial and operational responsibilities carried by the occupier.

Companies considering this route must assess whether to acquire a property directly or purchase the corporate vehicle owning it, alongside legal, technical, planning, environmental and tax due diligence.

For most businesses, leasing will remain the preferred approach. However, owner-occupation is becoming a credible alternative for selected companies where suitable buildings are available and long-term occupation can justify the capital commitment.

The more immediate change in Warsaw is therefore strategic rather than transactional. The city does not face a shortage of every type of office building, but it does have increasingly limited availability of the modern central accommodation most sought after by large occupiers.

With central vacancy below 5%, development restricted to around 130,000 sqm and strong leasing activity absorbing available space, corporate property decisions are moving further up the business planning agenda. For companies with major Warsaw leases expiring during the next several years, the most valuable negotiating advantage may increasingly be the amount of time they have before they need to move.

PORR expands healthcare construction platform as smart hospitals reshape infrastructure demand

PORR is expanding its healthcare construction activities across its European home markets as hospitals become more technologically complex and demographic change increases pressure for new and modernised healthcare infrastructure.

The Austrian construction group has strengthened its position in the sector following its acquisition of VAMED Standortentwicklung und Engineering GmbH at the end of 2025. The transaction added more than 30 healthcare projects, including developments in Austria and Romania, and expanded PORR’s capabilities beyond construction and structural design into areas including hospital operations planning and medical technology.

The enlarged business is now being rolled out under PORR Healthcare across the group’s core markets.

PORR CEO Karl-Heinz Strauss said the broader range of expertise allows the company to handle healthcare projects from initial planning through construction and the integration of specialised medical systems. The group sees this integrated approach as increasingly important as hospitals evolve from conventional buildings into complex operating environments.

Demographic trends provide part of the longer-term demand. PORR points to forecasts showing that people aged over 65 could represent around 26% of Austria’s population by 2040, compared with approximately 20% currently. Across the EU, the proportion is expected to approach 30% by 2050.

At the same time, the technical requirements of healthcare property are changing. Hospitals increasingly need to accommodate digital patient systems, telemedicine, artificial intelligence and interconnected clinical and operational technologies. This is encouraging greater use of Building Information Modeling during design and placing more emphasis on adaptable layouts that can respond to changes in medical equipment and treatment methods.

PORR is also using modular construction concepts to make clinical areas easier to reconfigure over their operating lives. Planning simulations are being applied to the movement of patients, medical personnel and supplies, with the objective of reducing unnecessary travel within hospitals and improving operational efficiency.

Energy and water consumption are another consideration. Hospitals are particularly resource-intensive buildings because of continuous operation and demanding ventilation, heating, cooling and medical requirements. This makes energy performance and resource management increasingly important in both new developments and refurbishment programmes.

In Vienna, PORR is currently delivering the new Pavilion 6 at Hanusch Hospital for the Austrian Health Insurance Fund. The approximately 10,500 sqm facility will contain 66 beds and a new operating theatre area, with the contract also covering the integration of medical technology.

The company is also involved in the multi-stage modernisation of the Reutte district hospital in Tyrol. The existing facility is being refurbished while remaining operational, including upgrades to areas used for orthopaedics, surgery, dialysis, paediatrics and maternity services.

Poland represents another significant healthcare construction market for the group, where PORR is currently involved in five projects.

The largest is a new oncology hospital in Wrocław, representing an investment of almost EUR 250 million. The design-and-build project will provide more than 100,000 sqm of gross floor area and is described as the largest public healthcare infrastructure investment undertaken in the region.

The hospital will comprise four above-ground levels and a basement, with 26 inpatient departments and 30 outpatient treatment units.

In Warsaw, PORR is developing an interdisciplinary treatment and diagnostic centre for the Institute of Mother and Child under another design-and-build contract. Its scope includes the installation of specialised medical equipment. The company is also due to complete a new cardiology department at Warsaw’s Bielański Hospital this quarter, including an angiography system.

Healthcare construction is also part of PORR’s Czech operations. In Prague, the company completed the Intensive Care Simulation Centre for Motol and Homolka University Hospital.

The approximately EUR 20.4 million project provides a multidisciplinary training environment in which medical teams can practise responses to critical situations including cardiac failure, severe bleeding and complications arising during anaesthesia. PORR used BIM and lean construction methods in designing and delivering the technically demanding facility.

The expansion comes as the definition of healthcare construction is broadening. Hospital developers increasingly have to consider the relationship between the physical building, medical technology, digital infrastructure, energy consumption and the operational movement of patients and staff from the beginning of the design process.

For contractors, this creates a market in which specialist planning capabilities can become as important as construction capacity itself. PORR’s expansion into healthcare reflects that change, with the group positioning the business around integrated planning and delivery rather than treating hospitals primarily as conventional construction projects.

Japan’s Manufacturing Corridors Are Being Reinvented for the Next Industrial Era

Japan’s manufacturing sector is entering a new phase of development as the country seeks to strengthen its position in advanced industry while responding to changing global supply chains and growing geopolitical uncertainty. Rather than relying solely on its traditional industrial strengths, Japan is reshaping its manufacturing corridors around high-value industries such as robotics, electric vehicle components, aerospace and precision engineering.

The objective extends beyond increasing factory output. Government policy is increasingly focused on creating integrated industrial ecosystems that combine manufacturing, research and development, skilled labour, universities and supporting infrastructure. These corridors are designed to improve innovation, strengthen supply chain resilience and attract long-term private investment into strategic industries.

This transformation forms part of Japan’s broader economic strategy, which aims to encourage investment across a range of priority sectors while supporting sustainable industrial growth over the coming decades.

Manufacturing Corridors Are Becoming Innovation Clusters

Japan’s industrial corridors have traditionally been developed around efficient transport networks, ports and logistics infrastructure. While these advantages remain important, the emphasis is shifting towards creating specialised clusters where manufacturers, research institutions and technology companies operate alongside one another.

These industrial ecosystems encourage collaboration between businesses and universities, accelerate technology development and allow companies to share highly skilled talent and specialised suppliers. As a result, manufacturing corridors are evolving into centres for innovation rather than simply locations for production.

For the real estate sector, this creates demand not only for industrial facilities but also for research campuses, technology parks, logistics centres, office space and residential developments that support a growing skilled workforce.

Robotics Is Supporting the Next Generation of Manufacturing

Robotics remains one of Japan’s greatest industrial strengths and is becoming an even more important part of its manufacturing strategy.

With one of the world’s oldest populations and a shrinking workforce, Japan faces increasing labour shortages across manufacturing and logistics. Automation is therefore becoming essential to maintaining industrial competitiveness while reducing dependence on manual labour.

Government policy increasingly supports the development of advanced robotics and artificial intelligence capable of performing both routine and highly specialised industrial tasks. These technologies are expected to improve productivity, enhance quality control and allow manufacturers to maintain production despite demographic pressures.

As robotics companies expand research and manufacturing activities, demand is growing for specialised industrial facilities and research environments capable of supporting advanced engineering and product development.

Strengthening the Electric Vehicle Supply Chain

Japan is also rebuilding its electric vehicle supply chain as global competition for battery production and critical minerals intensifies.

Rather than relying heavily on imported components, policymakers are encouraging greater domestic production of batteries and related technologies. The Ministry of Economy, Trade and Industry updated its Battery Industry Strategy in 2026, setting ambitious targets to expand domestic battery manufacturing capacity while significantly increasing the global competitiveness of Japanese battery producers over the next decade.

Government support includes financial incentives for battery manufacturing projects and continued efforts to strengthen domestic supply chains for strategically important components.

This investment is creating new opportunities for industrial real estate, particularly in regions capable of supporting battery production, advanced materials manufacturing and specialised logistics infrastructure.

Aerospace Is Emerging as a Strategic Industry

Japan is also expanding its ambitions in aerospace, recognising the sector’s importance for advanced manufacturing, precision engineering and future economic growth.

The government’s long-term industrial strategy identifies aircraft manufacturing, unmanned aerial systems, rockets, satellites and space technologies as priority industries. Growing international interest in commercial space activities and next-generation aviation is encouraging Japanese companies to strengthen domestic manufacturing capabilities across these sectors.

Recent partnerships between aerospace manufacturers and precision engineering companies illustrate the country’s efforts to develop highly specialised production capabilities while supporting innovation throughout the supply chain.

The expansion of aerospace manufacturing is expected to generate demand for advanced industrial facilities, testing centres, research laboratories and engineering campuses, further strengthening manufacturing clusters across Japan.

Industrial Growth Is Driving Regional Development

The reinvention of Japan’s manufacturing corridors extends well beyond factory construction. Large industrial projects create demand for transport infrastructure, utilities, housing, commercial property and community services, supporting broader regional economic development.

As companies establish research centres and advanced manufacturing facilities, surrounding areas benefit from increased employment, higher demand for residential property and the expansion of retail and service sectors. These developments also encourage further private investment, reinforcing the long-term competitiveness of regional industrial clusters.

This integrated approach reflects Japan’s objective of creating sustainable manufacturing ecosystems rather than isolated industrial estates.

A New Model for Industrial Competitiveness

Japan’s manufacturing strategy is no longer centred on competing through production volume alone. Instead, the country is focusing on industries where advanced technology, engineering expertise and innovation provide long-term competitive advantages.

By combining robotics, electric vehicle technologies, aerospace, precision engineering and research-driven manufacturing within integrated industrial corridors, Japan is creating a new model for industrial development that places equal emphasis on resilience, innovation and supply chain security.

For the real estate sector, this transformation represents a significant opportunity. Industrial land, research facilities, logistics infrastructure and technology campuses are becoming increasingly important as Japan builds the next generation of manufacturing clusters designed to support economic growth well into the future.

Source: © CIJ.World Japan Research & Analysis Team

Poland’s rental sector seeks greater certainty as both owners and tenants question current rules

Poland’s residential rental market is entering a new stage of debate over how the sector should be governed, with research showing that both property owners and tenants see room for changes to the existing framework.

A study by the Instytut Rynku Najmu (IRN) found that 64.6% of landlords would support additional regulation of the rental market, while 12.2% would prefer fewer rules. Tenants were less decisive, although 41.9% also favoured greater regulation, compared with 16% supporting a reduction.

The results suggest that the debate is not simply divided between landlords seeking greater freedom and tenants demanding stronger protection. Instead, there appears to be considerable interest on both sides in making the system easier to understand and more predictable.

Poland’s private rental sector currently operates through several areas of legislation and different forms of rental agreement rather than through a single framework covering the entire market. Traditional leases coexist with occasional and institutional rental arrangements, while other housing models are subject to their own requirements.

This structure can create uncertainty over the rights and responsibilities of the parties involved, particularly for private individuals who may have limited experience of rental law. The findings indicate that simplifying the system could therefore be as important as deciding whether individual protections should be strengthened or relaxed.

The research also reveals a considerable difference in how the two sides view their position within the market.

Some 52.4% of landlords believe the mechanisms available to protect their interests are inadequate. Among tenants, the corresponding figure is 28.2%, while 38.6% were unable to give a clear assessment of whether the current protections work effectively.

More than half of landlords, 52.6%, also believe tenants hold the stronger position under the existing system, while 22.4% consider landlords to have the advantage.

Previous problems with tenants appear to influence these concerns. The survey found that 38.6% of landlords had experienced difficulties during a tenancy. Within this group, 64.8% reported problems involving rent that was unpaid or received late, while 54.4% had encountered damage to a property.

One of the study’s more significant findings concerns the difference between landlords’ perception of eviction risk and how frequently the process is actually encountered.

Among owners who had experienced tenant-related problems, 95.4% were concerned about potentially having to pursue an eviction. However, only 14% of landlords in this group had actually experienced such proceedings. Across the entire landlord sample, this represents approximately 5.4%.

The figures indicate that difficult cases can have a substantial influence on sentiment even though they affect a relatively small proportion of the overall market. This distinction could become increasingly relevant as policymakers consider future changes to rental legislation.

It also matters for the development of Poland’s professional rental sector. Greater certainty over contracts, payment obligations, property protection and the procedures available when a tenancy breaks down can influence the way investors assess residential rental risk.

For tenants, clearer arrangements could similarly provide greater confidence over the security of their homes and the obligations that landlords must meet.

The survey covered 1,500 respondents, including 1,000 tenants and 500 landlords. Foreign nationals represented 16% of the tenant group, giving the research an additional perspective on a rental market that has become increasingly international.

The findings ultimately point towards a rental market looking for greater certainty rather than simply more or less regulation. As Poland’s residential investment market develops and professional rental operators become a larger part of the housing landscape, the ability to establish rules that are understandable and workable for both sides is likely to become increasingly important.

IRN intends to use the research as part of its continuing work on rental-market standards and discussions concerning the future structure of Poland’s residential rental sector.

Fabryka Form extends stay at MLP Pruszków II near Warsaw

FORMADE, the company behind Polish interior design retailer Fabryka Form, has renewed its lease at MLP Pruszków II, extending a relationship with the logistics park that began in 2021. Triflow advised the tenant during the renegotiation.

Fabryka Form has operated in Poland since 2005, specialising in the online sale of furniture, lighting, kitchen and bathroom products and other interior furnishings. The decision to remain at MLP Pruszków II keeps its logistics operations at one of the largest warehouse and industrial developments in the Warsaw region.

The parties have not disclosed the amount of space covered by the renewed agreement or the duration of the new lease.

Michał Wrzesień, CEO of FORMADE/Fabryka Form, said retaining the location provides the company with the logistics infrastructure needed to expand its product range and respond to changing customer demand.

For MLP Group, the transaction maintains an existing occupier rather than adding new take-up to the park. Agnieszka Góźdź, Management Board Member and Chief Development Officer at MLP Group, said the renewal reflects the company’s focus on retaining tenants and providing space capable of adapting as their operations change.

Triflow’s Miłosz Borkowski said the negotiations focused on maintaining operational continuity while agreeing conditions suitable for Fabryka Form’s longer-term requirements.

MLP Pruszków II is located in Brwinów municipality, around 5 km from Pruszków and west of Warsaw. When fully developed, the complex is expected to provide approximately 427,000 sqm of warehouse, production and office accommodation.

The location provides access to the A2 motorway via the Pruszków-Żbików interchange, approximately 3 km away, as well as nearby international railway connections. Public transport and bicycle infrastructure also provide access to the park for employees.

MLP is incorporating environmental measures into the development of the complex. Selected buildings have received BREEAM certification, while rooftop photovoltaic systems are being installed across parts of the park.

MLP Group operates logistics and industrial properties across Poland, Germany, Austria and Romania. Its portfolio, including completed properties, developments under construction and pipeline projects, represents more than 1.6 million sqm of leasable area. The company reported net asset value of approximately PLN 3.2 billion at the end of the first quarter of 2026.

7R links lower emissions with green finance as logistics development standards rise

Environmental performance is becoming more closely connected with the economics of logistics property, as developers combine lower-energy buildings with new financing structures and increasingly demanding certification standards. 7R’s latest sustainability results provide an example of how that transition is developing across the Central European industrial property sector.

The logistics and industrial developer reduced its combined greenhouse gas emissions by 29.1% in 2025 compared with its 2022 starting point. The result moves the company closer to its target of cutting direct emissions and those associated with purchased energy by 42% by 2030.

Electricity-related emissions recorded the largest improvement. On a market-based calculation, these were 56.1% below the 2022 level, while renewable-energy guarantees covered 47.5% of electricity used in properties managed by the company. Emissions connected with its vehicle fleet also declined, falling 4.2% from the previous year.

The figures form part of 7R’s third sustainability report. Although the company was not obliged to produce the report for 2025, it chose to continue reporting with reference to European sustainability disclosure requirements and the EU framework for identifying environmentally sustainable economic activities.

The results also show how environmental targets are increasingly being connected with capital markets.

During 2025, 7R completed three environmentally linked bond issues with a combined value of EUR 80.5 million. The company reported that 96% of the net proceeds had been directed towards projects meeting the eligibility criteria established under its financing framework. That framework was introduced in 2024 and subsequently updated in 2025.

Building quality is another area where the company has raised its requirements. All new 7R developments are assessed under BREEAM, with Excellent now serving as the minimum objective for projects entering the pipeline. Three buildings secured Excellent ratings during 2025 and another three reached Outstanding, the system’s higher certification level. Two projects completed under earlier specifications achieved Very Good ratings.

Among the highest-rated developments were two phases of 7R Park Gdańsk IV and the company’s build-to-suit project at Przylesie. The second Gdańsk phase comprises more than 40,000 sqm and uses a combination of heat pumps, photovoltaic generation, heat-recovery ventilation, enhanced insulation and digital controls for lighting and building systems.

For occupiers, such measures are increasingly relevant because the environmental specification of a warehouse can influence its operating expenses. Energy efficiency, on-site generation and better control of building systems can reduce exposure to energy costs, while owners are also facing growing expectations from lenders and investors concerning the future performance of their assets.

7R is developing this approach through its Green Saver concept. Buildings developed under the specification are intended to use substantially less primary energy and produce lower operational emissions than properties built only to minimum Polish technical requirements. The company is targeting reductions of at least 50% and is working towards specifications that could eventually allow new developments to operate without building-related carbon emissions.

Resource consumption is also being addressed during construction. Water use across the company’s building sites fell 44.3% year on year in 2025 to 2,264 cubic metres. Biodiversity plans were prepared for each of the six new projects included in the reporting period, while none was developed within a Natura 2000 protected area. No hazardous construction waste was reported during the year.

The report extends beyond buildings to employment and corporate management. Permanent employment agreements covered 91% of the workforce at the end of 2025, while women represented 69.2% of employees and 50% of senior management. Participation in the company’s staff satisfaction survey reached 91%, with its employee recommendation indicator standing at +31.

Looking towards 2026, 7R plans to introduce a common environmental policy across the group covering carbon reduction, water, biodiversity and the reuse of materials and resources. Environmental, health and safety requirements for contractors are also planned as part of the next stage of the programme.

The company says 98.55% of its turnover falls within activities covered by the EU Taxonomy. This represents eligibility rather than confirmation that the same share of revenue already satisfies all of the conditions required to qualify as environmentally sustainable under the European classification system.

The direction is significant for a logistics market in which sustainability is increasingly connected to asset competitiveness. Developers are being pushed to consider not only construction costs and rents but also future energy consumption, financing conditions, regulatory requirements and the ability of properties to remain attractive to institutional capital.

7R has delivered more than 2 million sqm of logistics and industrial space and operates in Poland, Czechia and Germany. Its pipeline currently stands at approximately 3.9 million sqm, including around 1.3 million sqm of projects described as ready to enter construction.

As this pipeline progresses, the company’s 2025 results illustrate a wider shift in logistics development: environmental measures are moving from an additional building feature towards becoming part of the financial and operational specification of the asset itself.

Prague office market tightens as limited supply pushes tenants towards lease renewals

Prague’s office market entered the second half of 2026 with historically low availability, limited new completions and a leasing market increasingly dominated by companies extending existing contracts rather than relocating.

Modern office stock in the Czech capital stood at approximately 3.95 million sqm at the end of the second quarter, while vacancy remained at 5.8%, its lowest level since 2020. Colliers also reports particularly limited availability in the city centre and Karlín, where vacancy was around 3.6% and 3.2%, respectively.

Independent Q2 figures published by CBRE in late July support the broader picture, putting Prague office stock at 3.95 million sqm and vacancy at 5.8%. CBRE expects the vacancy rate to remain broadly stable during 2026.

The shortage is most evident in newer, higher-quality buildings in established business locations. While companies continue to require modern workplaces, the number of immediately available alternatives remains restricted, making extensions of existing leases increasingly common.

Renegotiations represented approximately 70% of gross leasing activity during the quarter, according to Colliers. CBRE independently calculated the share at 69%. Colliers attributes the unusually high proportion partly to restricted availability, the cost of moving and the fact that much of the future development pipeline is either already committed or some distance from completion.

Technology companies accounted for more than one-third of leasing activity during the period, while pharmaceutical and healthcare businesses were also prominent occupiers.

Development activity is nevertheless beginning to increase. Approximately 309,300 sqm was under construction across Prague at the end of Q2, although around 58% had already been secured by future occupiers. CBRE reports the same pre-leasing ratio and describes the amount of genuinely speculative development as limited.

Part of the pipeline also consists of properties being developed for specific owners or major occupiers, including Česká spořitelna, ČEZ, Creditas and Generali. As a result, the headline construction figure overstates the amount of new space that will ultimately reach the open leasing market.

Only one significant office project was completed during the second quarter: the refurbishment of Danube House in Karlín. The renovated Class A property was already fully occupied before completion, illustrating the depth of demand for modern space in established locations.

Meanwhile, developers have started several smaller schemes in central Prague. These include Vinohradská 8 and the redevelopment of properties around Hybernská Street and Náměstí Republiky. The projects point towards increasing interest in smaller, centrally located developments rather than exclusively large office campuses.

The supply imbalance is also influencing rents. Prime rents in central Prague remained around EUR 30 per sqm per month during Q2, while stronger demand in Karlín, Smíchov, Pankrác and Brumlovka helped lift levels in the wider central market to approximately EUR 21.50–22.50.

Future projects are testing considerably higher levels. Space scheduled for delivery in 2027 and 2028 is being marketed above EUR 35 per sqm per month in central locations and at approximately EUR 23–28 across the wider centre. These figures represent asking levels for forthcoming projects rather than rents already achieved across the market.

The combination of low vacancy and restricted speculative construction is strengthening landlords’ position, but the unusually large share of lease renewals also highlights a constraint on market mobility. Companies may want newer or different space, yet the combination of availability, rents and relocation costs is making remaining in existing premises the more practical option for many occupiers.

A further change to Prague’s development environment is approaching with the new Metropolitan Plan. The planning framework is expected to become effective from 1 September 2026 and replace the city’s existing planning system dating from 1999. For the property sector, its significance will be particularly evident across major brownfield locations where residential, office, retail and public infrastructure are increasingly being planned together.

The immediate effect on office supply is likely to be limited because major developments still require lengthy preparation and permitting. Over the longer term, however, a clearer framework for large regeneration areas could help unlock development capacity at a time when Prague needs additional modern commercial and residential space.

For now, the market remains defined by a mismatch between demand and genuinely available high-quality offices. Prague may have more than 300,000 sqm under construction, but with a substantial part already committed, occupiers searching for large blocks of modern space continue to face relatively few options.

That imbalance is increasingly shaping both leasing decisions and development economics. Rather than a broad office-market recovery driven by rapidly expanding take-up, Prague is seeing a more supply-constrained phase in which existing buildings are retaining tenants, new projects can command higher rents and developers have greater justification to bring carefully positioned schemes forward.

Green roofs gain ground in Prague as developers respond to heat and rainfall risks

Green roofs are becoming a more established feature of residential development in Prague as developers look for practical ways to reduce overheating, manage stormwater and introduce more vegetation into densely built urban districts.

CRESCO REAL ESTATE is incorporating vegetated roofs into its SO-HO Rezidence development in Holešovice and plans a similar approach at Yards Žižkov, its residential project in the redevelopment area of the former Žižkov freight station. Both projects combine rooftop planting with greenery in courtyards and other communal outdoor areas.

The move reflects a wider challenge facing European cities as higher temperatures and periods of intensive rainfall place greater pressure on buildings and urban infrastructure. Dense development and large areas of hard surfaces contribute to heat accumulation while allowing rainwater to run rapidly into drainage systems rather than being absorbed locally.

Vegetated roofs can address both issues without requiring additional land at ground level. The systems typically consist of plants, lightweight growing material and filtration, drainage and protective layers that retain part of the rainfall reaching a building.

According to CRESCO, conventional roofs can discharge around 95% to 100% of rainfall, while extensive green roofs can reduce runoff to approximately half. Retaining water and releasing it more gradually can reduce the immediate burden on drainage infrastructure during heavy rainfall.

Temperature management is another consideration. Conventional roof surfaces can reach around 70°C during hot summer conditions. Vegetation helps stabilise roof temperatures and can reduce overheating, particularly on upper floors, potentially lowering demand for air conditioning and improving comfort for residents.

For residential developers, this is increasingly shifting green roofs from a landscaping feature towards part of a building’s long-term environmental and operational performance.

The first phase of SO-HO Rezidence already incorporates an extensive green roof based on a lightweight system designed to retain rainwater while requiring relatively limited maintenance. CRESCO plans to apply a similar solution at Yards Žižkov. The planting uses resilient species capable of coping with drought, strong sunlight and other conditions associated with exposed rooftop locations.

Aleš Svatoň, CEO of CRESCO REAL ESTATE Czech Republic, said the company is considering how its residential developments will perform over several decades. CRESCO sees vegetated roofs as contributing not only to reducing overheating but also to improving thermal performance, protecting roof structures and potentially supporting property values over the longer term.

The impact also extends beyond individual buildings. Green roofs can capture airborne particles, provide habitats for pollinators and return vegetation to neighbourhoods where opportunities for creating additional parks and ground-level green areas are limited. The concept is already being encouraged or incorporated into development requirements in some European cities.

The issue is becoming particularly relevant in Prague as former industrial and transport sites are transformed into higher-density mixed-use and residential districts. Rooftops and courtyards provide developers with additional opportunities to introduce vegetation without competing directly with the developable area of a site.

CRESCO is developing SO-HO Rezidence in Prague 7’s Holešovice district and preparing Yards Žižkov in Prague 3, within the wider redevelopment of the former Žižkov freight-station area. The projects form part of the Slovak developer’s expansion in the Czech residential market.

As Prague adds housing while also adapting to hotter summers and more demanding rainfall events, green roofs are likely to be judged increasingly on measurable building performance rather than appearance alone. Their ability to combine water management, temperature control and additional urban greenery is making them a more relevant component of climate-resilient residential development.

Poland’s inflation outlook remains contained despite renewed short-term price risks

Inflationary pressure in Poland remains broadly under control despite a small rise in an indicator tracking future price developments, while weaker expectations among consumers and businesses suggest limited risk of a renewed sustained acceleration in inflation.

The Future Inflation Index (WPI), compiled by Poland’s Bureau for Investments and Economic Cycles (BIEC), increased by 0.4 points in August compared with July. The indicator is designed to anticipate changes in consumer prices several months ahead. BIEC said the latest movement remains too small to threaten longer-term price stability, although external developments could temporarily push inflation higher.

One of the more encouraging signals comes from household expectations. The proportion of Polish consumers expecting prices to rise faster than previously fell from more than 18% in March to around 7% in July. Inflation expectations among both consumers and manufacturing companies remained relatively low and close to their levels a month earlier.

Price-setting intentions among manufacturers have also weakened. The difference between the proportion of manufacturing companies planning price increases and those expecting to reduce prices fell from more than 19 percentage points in April to around eight percentage points in July.

The trend is particularly evident among larger businesses. Among the biggest companies surveyed, the proportion expecting to increase prices is now equal to the proportion planning reductions. BIEC considers this important because lower price pressure among large manufacturers reduces the likelihood that inflationary behaviour will spread more widely through supply chains and smaller businesses.

There are nevertheless differences between industries. Producers of durable consumer goods currently show the strongest tendency towards price increases, particularly companies manufacturing computers and other electronic equipment.

Commodity markets provide another relatively favourable signal. According to BIEC, the IMF commodity price index has declined for two consecutive months compared with March levels, primarily because of lower energy commodity prices, including oil. Oil prices had experienced greater volatility following the Middle East conflict and tensions surrounding the Strait of Hormuz, but BIEC reports that the scale of those fluctuations has subsequently diminished.

Food commodities present a different risk. Prices for wheat, sugar and some oils have increased, while drought conditions affecting parts of Europe and other regions could contribute to further increases over the coming months. This remains one of the potential sources of short-term inflation identified in the August assessment.

Poland is also benefiting from relative currency stability. The złoty has remained stable against both the euro and US dollar, limiting the risk that higher international prices will be transmitted into the domestic economy through more expensive imports.

Industrial conditions are providing an additional buffer. Capacity utilisation in Poland’s manufacturing sector has remained broadly unchanged over the past six months, helping stabilise costs associated with machinery and equipment and reducing the likelihood of additional cost-driven inflation originating from production constraints.

Taken together, the August figures point to an inflation environment that remains relatively contained rather than signalling the beginning of another broad price surge. The modest increase in the forward-looking index warrants attention, particularly given risks from food commodities and external geopolitical events, but falling consumer expectations, weaker corporate pricing intentions, lower energy costs and currency stability currently provide counterweights to those pressures.

For Poland’s business and investment markets, continued price stability would provide a more predictable environment for operating costs and investment decisions. However, BIEC’s latest assessment also shows that external commodity and geopolitical developments remain capable of interrupting the disinflationary trend, even if the underlying domestic indicators remain comparatively stable.

Netherlands tightens flexible employment rules as Senate backs labour market reform

The Netherlands is preparing for a significant overhaul of flexible employment after the Dutch Senate approved legislation designed to give workers greater certainty over working hours, income and the duration of temporary employment.

The Flexible Workers (Increased Security) Act was approved by the Senate on 7 July 2026 and will introduce restrictions on on-call work, tighten the use of successive fixed-term contracts and strengthen employment conditions for temporary agency workers.

The reforms are significant for employers because flexible employment remains an important part of the Dutch labour market, with almost three in ten employees working under some form of flexible contract.

One of the biggest changes will be the effective abolition of traditional zero-hours and min-max contracts. These arrangements will largely be replaced by so-called bandwidth contracts, under which employers must guarantee employees a minimum number of working hours.

The maximum number of hours that can be required under such an arrangement will generally be limited to 130% of the agreed minimum. An employee contracted for at least 10 hours a week, for example, could be required to work up to 13 hours, while retaining the right to refuse work beyond that level.

The change is intended to preserve some flexibility for employers while providing employees with greater predictability over earnings and working time. Specific exemptions will remain available for groups including students, school pupils and people receiving an old-age pension, subject to the applicable conditions.

The legislation will also make repeated use of fixed-term employment substantially more difficult.

Under the existing framework, employees generally become entitled to permanent employment after three successive temporary contracts or three years of continuous employment. Currently, an interruption of six months can reset the sequence, allowing an employer to begin another series of temporary contracts.

The new legislation extends that interruption period to three years. As a result, employers will no longer generally be able to use relatively short breaks between contracts to restart the temporary employment cycle.

Exceptions are expected to remain for some forms of recurring temporary employment, including certain seasonal activities, as well as for students.

Temporary employment agencies will also face tighter restrictions. The initial Phase A period will be limited by law to 52 weeks, after which Phase B can run for a maximum of two years and contain no more than six fixed-term contracts.

This would generally limit temporary agency employment to three years before the worker becomes entitled to an indefinite employment relationship.

Another important change concerns remuneration and employment conditions for agency workers. Existing Dutch rules already provide equal treatment in areas including wages, allowances and working and rest periods. The new legislation broadens that principle to the overall employment package.

Agency workers performing the same or comparable work will have to receive employment conditions that are at least equivalent in value to those provided to employees hired directly by the company using their services. Individual benefits do not necessarily have to be identical, but the overall package must be comparable.

Implementation will take place in stages. According to the legislation described following Senate approval, the expanded equal-employment-conditions requirements for temporary agency workers are scheduled to apply from 31 December 2026, while the wider reforms, including changes to on-call and fixed-term employment, are expected to take effect from 1 January 2028.

For businesses operating in the Netherlands, the long implementation period provides time to review staffing models, but the changes could have considerable implications for sectors that depend heavily on variable labour.

Companies using zero-hours arrangements will need to assess which positions will require conversion to bandwidth contracts, while employers relying on repeated temporary contracts will have considerably less scope to rotate workers through successive fixed-term arrangements.

The reform therefore represents more than an adjustment to employment contracts. It marks a broader attempt by the Netherlands to retain labour-market flexibility while shifting more of the employment risk away from workers and towards employers that rely on flexible staffing.

Source; CMS

« Previous 1 … 49 50 51 52 53 … 574 Next »

Latest news

All posts by fletcher@cijeurope.com.