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

India’s New Investment Landscape: Which States Are Attracting the Most Foreign Capital?

Foreign investment has played a central role in India’s economic transformation since the economic liberalisation reforms of the early 1990s. While India continues to attract global capital across a wide range of industries, the distribution of investment has become increasingly concentrated in a handful of states that have successfully combined strong infrastructure, business-friendly policies and specialised industrial ecosystems.

Rather than competing solely as part of a national economy, Indian states are now actively competing with one another to attract international investors. Improvements in governance, digital services, logistics and industrial development have become important factors influencing where multinational companies choose to establish manufacturing facilities, technology centres and regional headquarters.

Foreign Investment Remains Concentrated

Although foreign direct investment (FDI) continues to flow into India, the majority of capital is directed towards a relatively small number of states.

Recent data from the Department for Promotion of Industry and Internal Trade (DPIIT) shows that Maharashtra remains India’s largest destination for FDI, accounting for a substantial share of annual equity inflows. Karnataka, Gujarat, Delhi, Tamil Nadu and Haryana also continue to attract significant levels of investment, while many other states receive comparatively modest inflows.

This concentration reflects differences in infrastructure quality, industrial development, workforce availability, ease of doing business and connectivity rather than simply geographical size.

As global investors become increasingly selective, regions that offer predictable regulatory environments and established business ecosystems continue to strengthen their competitive advantage.

Maharashtra Leads the Way

Maharashtra has maintained its position as India’s leading destination for foreign investment for several years.

Mumbai’s role as the country’s financial capital provides international companies with access to banking, capital markets, professional services and corporate headquarters. At the same time, Pune has developed into one of India’s most important centres for technology, automotive manufacturing, engineering and research.

The state’s extensive transport infrastructure, major seaports, industrial corridors and large consumer market further enhance its attractiveness for multinational businesses. Together, these advantages have enabled Maharashtra to consistently attract a significant proportion of India’s total annual FDI inflows.

Karnataka’s Technology Advantage

Karnataka has established itself as one of the country’s leading destinations for knowledge-based investment.

Bengaluru remains India’s largest technology hub, hosting global software companies, artificial intelligence research centres, semiconductor design firms, aerospace businesses, biotechnology companies and one of the world’s most vibrant startup ecosystems.

The availability of highly skilled professionals, strong academic institutions and an established innovation network continues to attract multinational corporations seeking research, product development and engineering capabilities.

As a result, Karnataka consistently ranks among the country’s largest recipients of foreign investment, particularly in technology-intensive sectors.

Gujarat’s Manufacturing Strength

Gujarat has built its reputation as one of India’s foremost manufacturing and export-oriented economies.

The state benefits from extensive port infrastructure, well-developed industrial parks and long-standing policies that support manufacturing investment. Cities such as Ahmedabad, Gandhinagar, Surat and Vadodara have become important centres for engineering, chemicals, renewable energy, pharmaceuticals and heavy industry.

Its strategic location along India’s western coastline also provides efficient access to international shipping routes, making Gujarat particularly attractive for companies involved in global supply chains and export-driven production.

Unlike Maharashtra and Karnataka, where financial services and technology dominate investment, Gujarat’s strength lies primarily in industrial manufacturing and logistics.

Why Certain States Continue to Attract More Investment

Several common characteristics explain why a relatively small group of states continues to receive the majority of foreign capital.

Reliable infrastructure remains one of the most important factors. Modern highways, ports, airports, industrial corridors and dependable power supplies reduce operational costs and improve business efficiency.

Equally important is the availability of skilled talent. States with strong universities, technical institutions and established industry clusters provide companies with easier access to qualified professionals.

Stable governance, transparent regulations and efficient administrative processes also improve investor confidence. Faster project approvals, digital government services and proactive investment promotion agencies help reduce uncertainty and accelerate business expansion.

Industrial clusters further reinforce these advantages. When suppliers, manufacturers, research institutions and service providers operate within the same region, businesses benefit from established ecosystems that improve productivity and encourage additional investment.

Opportunities for Emerging States

While investment remains concentrated, several emerging states are positioning themselves to attract a larger share of future foreign capital.

Infrastructure projects, industrial corridors, semiconductor manufacturing, renewable energy investments and logistics developments are creating new opportunities beyond India’s traditional investment destinations. States that improve connectivity, strengthen governance and develop specialised industrial ecosystems are likely to become increasingly competitive over the next decade.

Government initiatives such as production-linked incentive (PLI) schemes and continued infrastructure investment are also encouraging companies to diversify manufacturing locations across a broader range of regions.

Looking Ahead

India’s foreign investment landscape increasingly reflects the strength of individual state economies rather than national performance alone. States that combine modern infrastructure, skilled workforces, efficient governance and sector-specific expertise are emerging as clear winners in the competition for international capital.

For investors, understanding these regional differences is becoming just as important as analysing national economic trends. As India’s economy continues to expand, competition among states to attract global investment is expected to intensify, shaping the country’s industrial and real estate development for years to come.

Source: © CIJ.World India Research & Analysis Team

NEPI Rockcastle adjusts energy use at Romanian shopping centres to ease peak grid demand

NEPI Rockcastle is introducing energy-management measures across its Romanian shopping centre portfolio aimed at reducing electricity demand during peak periods and making greater use of renewable power when availability is higher.

The programme has initially been implemented at Promenada Bucharest and Mega Mall, where the company has adjusted the operation of air-conditioning systems to redistribute electricity consumption more efficiently throughout the day.

According to NEPI Rockcastle, the changes at Mega Mall alone have reduced demand on the electricity grid by approximately 4 MW during the relevant daily period. The property’s energy consumption is being more closely aligned with hours when solar generation is higher, reducing pressure on the national electricity system during periods of elevated demand.

The initiative builds on NEPI Rockcastle’s investment in its own renewable-energy infrastructure, including photovoltaic installations at its properties, together with energy-efficiency measures introduced across the group’s shopping centres.

Rather than simply reducing climate-control use, the approach involves adjusting when energy-intensive systems operate according to electricity availability and the characteristics of individual properties. Indoor temperatures will continue to be monitored to maintain appropriate conditions for visitors and tenants.

The company plans to extend the measures to additional Romanian shopping centres, with implementation determined by each property’s consumption profile, technical infrastructure and access to renewable energy.

The initiative illustrates the expanding role that large commercial properties can play in managing electricity demand. Shopping centres have substantial but partly flexible energy requirements, particularly for heating, ventilation and cooling, creating opportunities to shift some consumption away from periods when national grids are under greater pressure.

For NEPI Rockcastle, the programme also connects its investment in on-site solar generation with the operational management of its buildings, allowing properties to consume more electricity during periods of stronger renewable production while reducing reliance on the grid at more constrained times.

Japan’s Life Sciences Real Estate Is Emerging as the Next Growth Sector

Japan’s life sciences real estate market is steadily evolving as the country strengthens its position in biotechnology, pharmaceuticals and medical research. While logistics and office assets continue to dominate commercial property investment, laboratories, research campuses and innovation districts are becoming an increasingly important part of Japan’s real estate landscape.

The sector’s growth is being driven by a combination of scientific innovation, government policy and changing research practices. Biotechnology companies, pharmaceutical firms and research institutions are increasingly seeking purpose-built laboratory facilities that encourage collaboration, accommodate advanced equipment and support flexible research environments. At the same time, Japan is investing in digital healthcare, artificial intelligence and medical data infrastructure, creating additional demand for specialised research space.

Greater Tokyo Remains the Centre of Innovation

The Greater Tokyo metropolitan area has established itself as Japan’s leading life sciences hub, bringing together universities, pharmaceutical companies, hospitals, research institutes and technology businesses. Areas including Yokohama and Kawasaki have become particularly important because of their concentration of research facilities and access to highly skilled talent.

According to CBRE, the Greater Tokyo region contains approximately 4.8 million square feet of wet laboratory space, making it the country’s largest life sciences real estate market. Demand has continued to increase as companies modernise research facilities to improve collaboration, accommodate new technologies and provide greater flexibility for research teams.

Unlike conventional office buildings, laboratory properties require specialised ventilation systems, enhanced utilities, strict safety standards and adaptable layouts capable of supporting scientific research. These technical requirements create higher barriers to entry, limiting the supply of suitable space while supporting long-term demand for high-quality laboratory facilities.

A Different Investment Profile

Life sciences real estate offers investors a different risk and return profile from traditional commercial property sectors. Pharmaceutical companies, biotechnology firms and research institutions typically require long-term occupancy because relocating laboratories involves significant cost, regulatory approvals and operational disruption.

As a result, laboratory buildings often benefit from longer lease agreements, stable tenants and rental premiums compared with conventional office space. These characteristics have attracted increasing interest from institutional investors seeking resilient income streams.

However, specialised laboratory developments also require considerably higher capital investment. Developers must install sophisticated building systems, specialised utilities and technical infrastructure that exceed the requirements of standard commercial properties. Successful projects therefore demand both significant financial resources and specialist operational expertise.

Government Policy Is Supporting Expansion

Government policy is playing an increasingly important role in accelerating the development of Japan’s life sciences sector. National strategies aimed at strengthening healthcare innovation place considerable emphasis on the use of medical data, digital technologies and artificial intelligence to improve research and patient care.

Japan has also introduced reforms to improve the use of medical information through the Next Generation Medical Infrastructure Act, supporting more efficient data utilisation while maintaining privacy protections. At the same time, policymakers continue to promote pharmaceutical innovation, biotechnology research and startup development through financial incentives, regulatory improvements and initiatives designed to accelerate the commercialisation of new medical technologies.

Efforts to shorten approval processes and encourage collaboration between universities, research institutions and private industry are helping create an environment that supports long-term investment in research facilities and scientific innovation.

Building Research Clusters

Rather than developing isolated laboratory buildings, Japan is increasingly focusing on creating integrated research ecosystems where companies, universities, hospitals and investors operate in close proximity. These innovation clusters encourage knowledge sharing, attract skilled professionals and accelerate the commercialisation of new technologies.

As research activity expands, demand extends beyond laboratory space itself. New research districts require supporting office buildings, residential developments, hotels, retail services and transport infrastructure to accommodate scientists, healthcare professionals and technology workers. This creates broader opportunities across multiple segments of the real estate market.

Institutional investors and real estate investment trusts are also showing growing interest in life sciences assets, recognising their potential to provide stable long-term returns while benefiting from structural growth in healthcare and biotechnology.

A Market With Long-Term Potential

Although Japan’s life sciences real estate sector remains smaller than those of the United States and several European markets, its long-term growth prospects are becoming increasingly attractive. Rather than competing on scale alone, Japan is positioning itself as a centre for advanced medical research, precision healthcare and biotechnology innovation.

As investment in pharmaceuticals, artificial intelligence, medical technology and scientific research continues to increase, demand for specialised laboratory facilities is expected to expand alongside it. Combined with supportive government policies and a strong research ecosystem centred on Greater Tokyo, life sciences real estate is emerging as one of the country’s most promising specialised property sectors.

For investors, developers and occupiers alike, the sector represents an opportunity to participate in a market driven not only by property fundamentals but also by the long-term growth of healthcare innovation and scientific research in Japan.

PAMERA North America expands US residential strategy with $32 million Atlanta acquisition

PAMERA North America has completed the acquisition of a 216-unit apartment community in Atlanta, marking its seventh US investment and its first move into the workforce housing segment.

The New York-based investment company, part of Munich-headquartered PAMERA Real Estate Group, acquired The Grove at Ben Hill Flats, formerly known as Village on the Green, through a 50/50 joint venture with Miami-based multifamily investor PXV Multifamily. The transaction closed at the end of July, with total capitalisation of approximately $32 million.

Located at 2975 Continental Colony Parkway SW in Southwest Atlanta, the residential community was completed in 2004 and comprises 16 three-storey buildings across a 16.2-acre site.

The development contains 216 apartments, including 80 one-bedroom, 104 two-bedroom and 32 three-bedroom units. Twelve of the two-bedroom properties are townhouses. Average apartment size is approximately 1,106 sq ft.

Amenities include a clubhouse, fitness centre, swimming pool, tennis courts, dog park and children’s playground.

The location provides access to Hartsfield-Jackson Atlanta International Airport and the employment and distribution corridors surrounding Interstates 75 and 85. PAMERA sees the area’s logistics, transportation and other employment bases as supporting demand for moderately priced rental accommodation.

The acquisition represents a shift in the company’s US residential strategy towards workforce housing, targeting rental properties serving middle-income households. PAMERA believes this part of the market faces limited additions to supply as high land, construction and financing costs have pushed much of recent US multifamily development towards higher rental segments.

PAMERA said the acquisition price equates to approximately $137,000 per apartment, while total capitalisation represents around $148,000 per unit. According to the investor’s estimates, this is approximately 25% below the replacement cost of comparable residential properties.

The joint venture plans to invest approximately $3 million in the property as part of a programme combining operational improvements with targeted capital expenditure. Greystar has been appointed to manage the community.

“This transaction reflects exactly how we intend to grow in North America: differentiated assets, sourced in partnership with deeply experienced managers, at attractive valuations,” said Cord Ernst, Managing Partner of PAMERA North America. He added that the investment provides exposure to a residential segment where the company sees constrained new supply and an opportunity to acquire existing housing below estimated replacement cost.

The transaction is PAMERA North America’s seventh investment in the United States and broadens a strategy that has so far targeted opportunities in markets including New York City, Boston and the Sun Belt.

The company is focusing on residential, logistics and retail properties where refurbishment, repositioning or operational improvements can increase income and asset value. The Atlanta acquisition also indicates a growing emphasis on existing residential stock at a time when elevated development costs are making new construction more difficult to deliver at rents affordable to middle-income households.

Union Investment Secures Long-Term Tenant for Düsseldorf Landmark as Asset Repositioning Continues

Union Investment has signed a long-term lease for almost 10,000 sqm at its landmark Seestern 3 office building in Düsseldorf, reinforcing demand for high-quality office space in established German business locations while preparing the property for the next phase of its tenant mix.

The new occupier, described as a global technology group, has agreed to lease 9,666 sqm of office space, 179 sqm of storage space and 140 parking spaces under a 10-year agreement that will commence in the second quarter of 2027. Financial terms and the tenant’s identity were not disclosed.

The transaction comes ahead of the planned relocation of Deutsche Telekom, which currently occupies part of the building and is expected to vacate the relevant space during the third quarter of 2027. According to Union Investment, the early commitment from the incoming tenant will allow refurbishment works to begin immediately after the existing occupier moves out, helping to minimise vacancy and maintain the building’s leasing momentum.

Sven Lintl, Head of Asset Management DACH at Union Investment, said the agreement reflects the company’s active asset management strategy, noting that discussions are already underway with additional prospective occupiers for other space that will become available following Deutsche Telekom’s departure.

Seestern 3, located in Düsseldorf’s established Seestern office district on the left bank of the Rhine, comprises approximately 33,000 sqm of lettable space and forms part of the UniImmo: Europa open-ended real estate fund, having been held within the portfolio since 1999.

Originally designed in 1961 by architect Helmut Rhode as the headquarters of the Horten department store group, the building is regarded as one of Germany’s earliest purpose-built open-plan office developments. Union Investment completed an extensive refurbishment between 2013 and 2015, modernising the property while preserving its architectural character.

Today, the LEED Gold-certified office building combines modern workplace standards with landscaped outdoor areas, including private parkland, internal courtyards and terrace space. The building and its surrounding park are protected as a historic landmark.

The leasing transaction highlights continued occupier demand for well-located, sustainable office buildings despite a slower investment market across Germany. While overall office transaction activity remains below long-term averages, modern buildings with strong environmental credentials and flexible workspace continue to attract corporate tenants seeking to consolidate into higher-quality premises.

Cushman & Wakefield advised on the leasing transaction, while RKW Architektur was responsible for planning the tenant fit-out.

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