All posts by fletcher@cijeurope.com.

Lithuanian Capital Takes a Bigger Share of the Country’s Property Investment Market

Lithuania has become the most active commercial property investment market in the Baltics during the first half of 2026, but the headline transaction volume tells only part of the story. A more significant development is taking place in the source of the money behind those acquisitions.

More than €500 million of Lithuanian commercial property changed hands during the first six months of the year. Large international transactions contributed to the result, but Lithuania is no longer relying exclusively on foreign institutions to generate meaningful investment activity. Locally managed funds and private investors have developed into an increasingly important source of capital.

That represents a considerable change from earlier property cycles. For years, investment activity across the Baltic states was particularly sensitive to decisions being made in Stockholm, Frankfurt, London and other European financial centres. When international property funds increased their allocations to the region, transaction volumes could rise rapidly. When those institutions withdrew, liquidity could disappear just as quickly.

Lithuania is gradually becoming less dependent on that pattern. The domestic investment industry has expanded considerably, with market estimates indicating that more than 120 real estate investment vehicles now operate in the country. This has created a much larger pool of potential buyers than existed during previous cycles.

Bank of Lithuania statistics provide another indication of this expansion. The outstanding value of units and shares issued by Lithuanian real estate funds reached approximately €1.8 billion at the end of June 2026, compared with around €1.64 billion a year earlier.

This does not mean international capital is leaving Lithuania. One of the year’s largest transactions demonstrates precisely the opposite. A company managed by US investment manager W. P. Carey acquired 19 properties occupied by Kesko Senukai across Lithuania, Latvia and Estonia for €177.5 million. Lithuanian properties represented approximately €133 million of the portfolio’s value.

The transaction demonstrates that large international investors remain willing to commit substantial amounts of capital to Lithuania when an opportunity combines sufficient scale with established occupiers and dependable rental income. However, beneath transactions of this size, another investment market is developing.

Lithuanian funds and private investors are increasingly purchasing offices, retail properties and other commercial assets that might once have depended upon foreign buyers. This gives owners a broader range of potential purchasers and creates additional routes for developers wishing to release capital from completed projects.

The Wave business centre in Vilnius provides an example. Galio Group agreed during the second quarter to sell the property to Groa Real Estate Opportunity Fund, managed by Lithuanian investment company GROA Capital. For the developer, the disposal releases money that can be directed towards future projects, while the investment fund gains exposure to an established office property.

Transactions of this kind are important because they demonstrate how a deeper domestic capital market can support the development cycle. A developer does not necessarily need to hold a completed building while waiting for a large international institution to become interested. Once a project reaches the appropriate stage of leasing and operation, a Lithuanian investment vehicle can potentially become the longer-term owner.

Existing funds are simultaneously becoming more active sellers. EfTEN disposed of the Menulio 11 office property in Vilnius during the second quarter for €8.1 million. The transaction formed part of the fund manager’s wider programme of selling selected properties and releasing money for future investment.

As more funds reach different stages of their investment periods, such transactions should become increasingly common. Properties can move between developers, private investors, Baltic investment managers and international owners rather than remaining with the same institution for long periods. This creates greater depth in Lithuania’s secondary investment market.

That depth matters particularly when foreign institutions become cautious. Lithuania is a relatively small European property market and international investors can reduce their exposure quickly when financing conditions, geopolitical perceptions or portfolio strategies change. A substantial domestic investor base cannot remove those risks, but it can prevent the market from becoming entirely dependent on decisions taken elsewhere.

Local investment managers can also operate in parts of the market that are less attractive to very large institutions. A €10 million or €20 million property may be too small to justify the resources of a global investment manager, but it can represent a significant acquisition for a Lithuanian fund or private investor. Collectively, these transactions can create substantial liquidity.

The next stage will be whether Lithuanian investment managers can continue moving into larger properties. Growing fund sizes and accumulated experience mean domestic managers are increasingly capable of considering assets that previously would have been targeted mainly by international institutions. Offices, retail properties and portfolios with values well above the traditional local-investor range are gradually becoming realistic targets.

There remain limits. Lithuania’s largest shopping centres, major office portfolios and large logistics platforms can require equity commitments beyond the capacity or risk limits of individual domestic funds. International institutions therefore remain essential to a fully functioning investment market.

Foreign buyers also increase competition. When domestic and international investors are bidding for the same property, owners have more options and pricing becomes less dependent on a small number of local purchasers. Lithuania’s strongest future investment market is therefore unlikely to be either domestic or international. It will require both.

What has changed is the balance between them. International capital remains capable of producing the year’s largest transactions, but Lithuanian and Baltic money increasingly provides the activity underneath those headline deals. The market consequently has a broader financial foundation than during earlier cycles.

That makes the first-half investment figures more important than simply showing another recovery in transaction volumes. Lithuania appears to be developing an investment ecosystem capable of generating its own buyers, financing property acquisitions and providing exits for developers even when major international institutions remain selective.

The real test will come when some of the country’s largest institutional properties are offered for sale. If Lithuanian funds increasingly compete directly for those assets, either individually or alongside other investors, the transformation of the market will become much clearer.

For now, foreign capital remains an important part of Lithuania’s commercial property market. The difference in 2026 is that it is no longer the only capital capable of keeping that market moving.

Source: CIJ.World Research & Analysis Team

Hungary’s Commercial Property Market Rebounds as Local Capital Dominates Deals

Hungary’s commercial property market gathered momentum during the first half of 2026, producing its best opening six months since 2021. Yet behind the improvement in transaction volumes lies an important change in the country’s investment landscape: Hungarian capital is still doing most of the buying.

Colliers estimates that commercial property transactions reached approximately €610 million during H1 2026, an increase of 26.7% compared with the same period last year. Cushman & Wakefield calculates a lower total of more than €507 million, reflecting differences in the transactions included by individual market advisers, but both point to a clear improvement in activity. Domestic investors accounted for roughly three-quarters of acquisitions. Colliers estimates the Hungarian share at 74%, while Cushman & Wakefield places it at 78%. The precise figures differ, but the message is consistent: Hungary’s property recovery is currently being financed predominantly from within the country.

That represents a significant structural shift from earlier investment cycles. Budapest was once much more dependent on international institutions, particularly investors from Western Europe. As foreign buyers became less active during the recent downturn, Hungarian property funds, institutions and private investors expanded their role. This domestic capital has helped maintain liquidity during a period when international investors were much more selective. It has also created a deeper local ownership base that is likely to remain influential even if foreign investment strengthens again.

There are already indications that international interest is beginning to recover. Data from the Magyar Nemzeti Bank show that domestic investors represented around 61% of Hungarian commercial property transactions in 2025, compared with approximately 73% in 2024. The reduction indicates that foreign capital increased its share last year after several years in which local buyers had become unusually dominant. The higher domestic share recorded again during H1 2026 does not necessarily reverse that trend. Hungary is a relatively small transaction market, where several large acquisitions can quickly alter the nationality breakdown. Instead, the figures suggest that the return of international capital is likely to be gradual and uneven.

Pricing may determine how quickly that process develops. Hungarian commercial property continues to provide considerably higher yields than equivalent prime assets in some neighbouring Central European markets. Colliers placed prime Budapest office yields at around 6.50% during H1, logistics at approximately 6.75% and shopping centres around 7%. Cushman & Wakefield estimates prime office yields slightly lower, at around 6.25%. For international investors comparing Budapest with cities such as Prague, that difference can translate into substantially higher income from a similarly priced property.

The additional return, however, reflects additional perceived risk. Hungary has spent recent years dealing with high inflation, expensive financing, currency volatility and weaker economic conditions. International institutions have also considered political and regulatory uncertainty and the relatively limited liquidity of the Hungarian investment market when deciding how much capital to allocate to the country. The issue is therefore not whether Budapest is cheaper than some competing markets. It is whether the price difference has become large enough to make the risks acceptable.

Conditions have improved in several areas during 2026. Hungarian government borrowing costs have declined from earlier highs, measures of sovereign risk have improved and the forint has strengthened against the euro. Financing conditions are also more supportive than during the most difficult stage of the interest-rate cycle. At the same time, commercial property values have adjusted. That combination is making Hungary more interesting to investors seeking higher returns. Buyers can enter the market at yields well above those available in several neighbouring capitals while some of the financial pressures that previously discouraged investment have eased.

The assets changing hands are equally revealing. According to Colliers, offices accounted for approximately 37.9% of investment during H1, making them the largest sector in its dataset. Retail represented around 32.9%, while industrial and logistics property accounted for approximately 18.5%. Cushman & Wakefield records a different order, with retail ahead of offices. The distinction is less important than the wider trend. Both sectors are attracting substantial investment despite having faced considerable uncertainty during the previous property cycle.

Office investment is particularly noteworthy. Hybrid working, rising vacancy and changing corporate requirements have forced investors to reconsider how office buildings should be valued. Older properties may require significant refurbishment, while companies increasingly favour modern, efficient buildings capable of meeting environmental standards and employee expectations. Yet offices represented a substantial proportion of Hungarian investment during H1. Transactions involving Capital Square and Millennium Tower I were among the deals contributing to activity.

Retail has also returned to the investment agenda. Árkád Szeged, Korzó Nyíregyháza and the Park Center portfolio were among properties changing ownership during the period. This suggests that investors are becoming willing to examine sectors that were previously difficult to sell, provided the acquisition price reflects the risks involved. A property does not have to be problem-free to attract capital. It needs to offer sufficient potential income relative to the cost of acquiring, financing and improving it.

That could become increasingly important as more international investors examine Hungary. The safest route into the market remains high-quality buildings with established occupiers, long leases and strong locations. These assets allow investors to benefit from Hungary’s comparatively high yields while reducing leasing and refurbishment risk. But some of the largest opportunities may eventually emerge among properties requiring active management.

Budapest contains ageing office buildings that need substantial investment to remain competitive. Some could be repositioned or converted to other uses. Shopping properties may require refurbishment or changes in tenant mix. Logistics assets need increasingly careful assessment as vacancy and new supply vary considerably between Budapest and regional industrial locations. These situations could attract investors willing to accept greater property risk in exchange for potentially higher returns.

Capital from neighbouring Central European countries may be particularly well suited to this part of the market. Czech investors have become major cross-border buyers across CEE. Knight Frank estimates that Czech capital deployed close to €2 billion around the region during H1 2026. Hungary represents one of several markets where those investors can compare acquisition yields with substantially more expensive opportunities at home.

This does not mean Czech buyers have become the dominant foreign force in Hungary. It does demonstrate that a large pool of regional capital exists within relatively close proximity to Budapest. Regional investors may also be comfortable with transactions that fall below the scale required by large global property funds. They understand Central European economic conditions, can manage assets locally and are familiar with the risks associated with investing across neighbouring markets.

Hungary could therefore see its international investment base rebuild from the region outward rather than through an immediate return of large Western institutions. That would create a different investment market from the one Hungary had before the recent downturn. Hungarian funds and institutions would remain major participants. Domestic private investors could continue acquiring smaller or management-intensive properties. Czech and other regional capital could pursue assets where Hungarian yields provide an attractive premium. Larger international institutions could then increase their exposure as liquidity and confidence improve.

The strength of domestic capital may actually help this process. Foreign investors considering Hungary need to know not only that they can buy a property but that somebody will eventually buy it from them. A strong Hungarian institutional market provides potential future purchasers and therefore improves exit liquidity. Regional investors broaden that pool further.

This makes transaction volume important for reasons beyond the headline number. Every completed acquisition provides evidence of pricing, establishes comparable values for lenders and investors and demonstrates that properties can still be traded. Hungary has not yet returned to the internationally dominated investment market of earlier cycles, nor is there evidence of a large-scale rush of global capital into Budapest. The current recovery is more measured.

Domestic investors remain responsible for most acquisitions, while foreign buyers are gradually reconsidering the market. Higher yields provide an incentive to look, but those returns must still compensate for economic, currency, political and liquidity risks. The second half of 2026 will reveal whether the balance begins to change.

Colliers believes annual investment could exceed €1.2 billion if transactions currently in progress are completed. Passing €1 billion would already represent an important step in Hungary’s recovery. But the nationality of those buyers may ultimately tell investors more than the final transaction volume.

If domestic capital continues to dominate, Hungary will have demonstrated that it now possesses a strong local investment market capable of supporting property liquidity independently. If the proportion of foreign and regional capital rises, the country will also have begun rebuilding the international buyer base that retreated during the downturn.

Either way, the Hungarian investment market entering the second half of 2026 looks very different from the one that entered the property correction. Capital has started moving again. The next question is who decides to follow it.

Source: CIJ.World Research & Analysis Team

Smaller Tenants Are Setting the Pace in Riga’s Office Recovery

Riga’s modern office market is beginning to absorb some of the space delivered during its recent development wave, but the companies responsible for much of that improvement are not necessarily the large international corporations traditionally associated with prime office buildings. Class A vacancy declined from approximately 16.1% to 15% during the second quarter of 2026. Although that still leaves a substantial amount of modern office space available, the movement provides evidence that demand is gradually catching up with recent supply.

The more significant development can be found in the size of current leasing requirements. Much of the active demand is coming from small and medium-sized companies looking for offices of up to approximately 400 sqm. Larger occupiers are also examining opportunities in Riga, but many of those requirements remain at an earlier stage and may not translate into transactions until later. This creates an immediate challenge for landlords. They cannot design their leasing strategies exclusively around the possibility that a multinational company will eventually arrive seeking several thousand square metres. They also need to serve businesses that are prepared to make decisions today.

Those companies frequently want something different. A business seeking 150, 250 or 400 sqm may have little appetite for taking an unfinished office and then managing a lengthy construction project before employees can move in. Interior design, lighting, meeting rooms, kitchens, cabling and furniture can turn a relatively modest office relocation into a significant capital commitment. Ready-to-occupy premises reduce that burden. Instead of becoming temporary property developers themselves, tenants can concentrate on selecting the right location, size and lease terms.

This preference is already influencing what Riga landlords bring to the market. Smaller completed offices are becoming an increasingly important part of the leasing offer, allowing businesses to move quickly without financing a substantial fit-out themselves. Several major Riga projects demonstrate how developers are responding.

New Hanza offers offices starting at approximately 150 sqm and combines private workplaces with common facilities. Verde’s expansion is also being designed so that relatively large floors can be divided into much smaller offices, with units beginning at around 150 sqm in Building C and approximately 200 sqm in the planned Building D. Preses Nama Kvartāls provides another example. Its office component is capable of accommodating both substantial corporate requirements and considerably smaller businesses. Individual floors can be divided between several occupiers, while offices are being marketed from little more than 100 sqm.

The pattern suggests that flexibility is becoming an important part of Riga’s new office product. That does not mean the city is abandoning large corporate tenants. Developers still need buildings capable of accommodating companies requiring several thousand square metres. Instead, the challenge is creating properties that work for both ends of the market.

A floor that can accommodate one major organisation today may need to be divided between several smaller companies tomorrow. Conversely, an expanding tenant occupying several small units may eventually want them combined into a larger office. This requires flexibility to be incorporated into the building itself.

Ventilation, heating, cooling, electricity, access control and fire-safety systems all become more complicated when a floor needs to support several independent companies. Corridors, entrances and shared facilities must also be arranged so that subdivision does not create inefficient or unattractive space. Developers capable of solving those problems during the design stage have an advantage over owners trying to adapt buildings created around a very different leasing model.

The economics for landlords also change. Leasing 3,000 sqm to a single company provides one negotiation, one lease and one relationship to manage. Filling the same amount of space with numerous smaller companies requires more leasing activity, more administration and potentially more frequent investment in interiors. There is, however, another side to that equation. A building heavily dependent on one major tenant can lose a significant proportion of its income when that company leaves. A property occupied by many smaller businesses spreads that risk across a larger tenant base.

For Riga, where the number of companies capable of taking several thousand square metres at once is naturally limited, diversification can become particularly valuable. Shared facilities can also improve the economics. A 200 sqm tenant may need access to a large meeting room only occasionally. Providing conference rooms, lounges and other communal facilities at building level means smaller companies do not need to reproduce those spaces inside every individual office.

That can reduce the amount of private floor area a tenant needs while making the overall building more attractive. The distinction between conventional offices and flexible workspace consequently becomes less clear. A landlord does not need to operate a coworking centre to provide flexibility. Conventional leases can still be combined with smaller units, shared facilities and opportunities for companies to expand within the same building.

Existing properties will need to respond. Some Riga office buildings were conceived during a period when attracting large corporate occupiers was a central part of the development strategy. Large uninterrupted floorplates can still be highly attractive when the right tenant appears, but they may be more difficult to lease when current demand is concentrated among businesses requiring only a fraction of that space.

Subdividing those floors can require additional investment. Mechanical systems may need alterations, access arrangements can become more complicated and new common areas may be required. Buildings capable of making those changes economically could compete effectively with new developments. Others may need to rely more heavily on lower rents or location advantages.

Development confidence is nevertheless beginning to reappear. Another stage of New Hanza has been announced, while work continues on Preses Nama Kvartāls and Verde C. Developers remain cautious about launching additional speculative construction, which is understandable while Class A vacancy remains around 15%.

The pipeline therefore faces an unusual balancing act. Developers need to respond to the smaller companies driving current leasing activity without assuming that Riga’s future office market will consist predominantly of small tenants. Larger corporate requirements are still being explored and could become more important over the next several years.

The most successful buildings may consequently be those that do not force developers to choose between the two. A modern Riga office should increasingly be capable of accommodating a 200 sqm local company, allowing that business to expand as it grows and still retaining the ability to offer several thousand square metres to a major international occupier.

For investors, that flexibility could eventually become part of a building’s value. Properties capable of serving a broad range of tenants should have a larger potential occupier base and less dependence on a small number of major leasing requirements. Buildings that are difficult or expensive to subdivide could face greater leasing risk if smaller requirements continue dominating transactions.

Riga’s declining vacancy rate is therefore only part of the office story. The more important development is occurring inside the buildings themselves. Companies taking space today are helping determine what landlords provide, how floors are divided and how much responsibility owners assume for delivering finished premises.

Riga’s next major corporate headquarters may still arrive. Until it does, smaller businesses are providing much of the demand that is moving the market forward. In responding to them, developers may be creating office buildings that are ultimately better equipped for both small and large tenants.

Source: CIJ.World Research & Analysis Team

Thessaloniki Is Developing the Ingredients for a Deeper Investment Market

Athens remains the centre of institutional real estate investment in Greece, but developments in Thessaloniki increasingly justify examining the country’s second-largest city as a property market in its own right. Housing demand, new transport infrastructure, logistics development, port investment, tourism and urban redevelopment are creating several distinct investment opportunities within the same metropolitan area. The question is whether those individual markets can eventually become large and liquid enough to support sustained institutional investment rather than occasional acquisitions.

Residential property provides one indication of the city’s momentum. In the second quarter of 2026, residential asking prices in Thessaloniki were approximately 7.7% higher than a year earlier, compared with growth of around 5.3% in Attica. Asking rents in Thessaloniki increased by approximately 6.6% over the same period. These figures measure advertised prices rather than completed transactions, but they nevertheless indicate continued pressure within the housing market. Thessaloniki also benefits from a large university population, providing an important source of rental demand alongside permanent residents. This creates potential for conventional rental housing, renovated apartment buildings and, where the economics support development, professionally managed student accommodation.

Transport infrastructure is simultaneously changing the city’s accessibility. The Thessaloniki Metro began operating in late 2024, ending a lengthy period in which Greece’s second-largest metropolitan centre functioned without an urban rail system. The Kalamaria extension followed in August 2026, adding five stations and extending the network farther into the eastern part of the city. The property consequences will develop gradually. A metro station does not automatically increase the investment value of every surrounding building, and development opportunities depend on planning restrictions, land availability, ownership structures and the condition of existing properties. Improved accessibility can nevertheless influence where residents choose to live and where developers consider residential, commercial and mixed-use projects viable.

The western side of the metropolitan area presents a very different property story. Sindos is one of Greece’s principal industrial and logistics locations. Its importance comes from its relationship with Thessaloniki, regional road connections and the city’s port, providing occupiers with access to northern Greece and routes towards neighbouring Balkan markets. Demand for good-quality logistics space remains healthy, while the availability of modern buildings is relatively restricted. That creates opportunities for new development and refurbishment while giving Thessaloniki an investment sector that is not dependent on the residential market or city-centre tourism.

The Port of Thessaloniki strengthens this position. Investment in the expansion of Pier 6 is intended to increase the port’s ability to handle larger container vessels and greater cargo volumes. The significance for property extends beyond the port itself. Additional capacity and improved freight infrastructure can reinforce demand for warehouses, distribution facilities and industrial property across the wider Thessaloniki region, although domestic retail, manufacturing and distribution remain important independent sources of logistics demand. This combination of port infrastructure and inland industrial property gives Thessaloniki an economic role that differs from that of a conventional regional city. Its location provides a potential gateway between maritime trade, northern Greece and southeastern European markets.

Hospitality adds another investment sector, but the 2026 figures demonstrate why Thessaloniki should not be portrayed as a market in which every segment is expanding at the same speed. During the first half of 2026, hotel occupancy was lower than during the equivalent period of 2025, while average room rates increased. Revenue generated per available room consequently recorded only limited improvement. Thessaloniki therefore continues to attract hospitality investment interest, but hotel performance needs to be assessed carefully rather than simply assumed to be strengthening alongside tourism.

Offices present a similar need for selectivity. Thessaloniki’s office market is considerably smaller than Athens and offers fewer large assets capable of attracting major institutional investors. Building quality, energy performance, accessibility and location are becoming increasingly important considerations for occupiers, while the limited size of the market makes large speculative developments more difficult to justify without clear evidence of tenant demand. This creates opportunities for modernisation but also limits scale. Older commercial buildings can potentially be renovated, repositioned or converted to alternative uses. Residential, hospitality and mixed-use projects may provide viable alternatives where continued office use cannot support the capital expenditure required to bring a building up to contemporary standards.

Redevelopment could consequently become an important component of Thessaloniki’s investment market. The city contains substantial existing building stock, often divided among multiple owners and constructed long before modern institutional property requirements emerged. Consolidating ownership, renovating buildings and creating larger professionally managed assets can potentially transform fragmented local property into investment products capable of attracting larger pools of capital.

For institutional investors, however, having attractive individual opportunities is only the beginning. A mature investment market needs repeatability. Investors need to be able to acquire more than one suitable asset, deploy meaningful amounts of capital and eventually sell those properties to other professional buyers. This is where Thessaloniki still differs significantly from Athens.

An investor can identify a modern logistics facility around Sindos, a hotel in the centre or a residential redevelopment opportunity and make a successful individual acquisition. It is considerably more difficult to construct a large diversified portfolio because the supply of institutional-scale assets remains relatively limited. Exit liquidity is equally important. Funds generally invest with an eventual sale in mind. The greater the number of potential buyers, the easier it becomes to price an asset and execute an exit. Athens benefits from a much broader universe of domestic and international investors. Thessaloniki’s professional buyer pool remains smaller.

The significance of current developments is therefore not that Thessaloniki has already achieved the institutional depth of Athens. It has not. Rather, the city increasingly possesses several of the conditions that could allow a deeper institutional property market to develop. Residential demand provides one foundation, the university population supports the rental market, the metro is improving urban connectivity, Sindos provides an established logistics base, the port is receiving substantial infrastructure investment, tourism supports hospitality, while older buildings create redevelopment opportunities.

These sectors do not need to perform identically for the investment market to deepen. What matters is whether enough institutional-quality assets emerge across several sectors to allow investors to remain active in Thessaloniki over multiple investment cycles. That would represent a significant change for Greek real estate. Instead of institutional investors treating Thessaloniki primarily as a location for exceptional individual opportunities, they could begin viewing the city as a place where capital can be deployed repeatedly across logistics, residential, hospitality, offices and specialist property.

The transition will depend on development volume, transaction activity and the emergence of a larger professional buyer pool. It will also depend on whether new infrastructure produces investible property rather than simply higher expectations for land and existing buildings. Athens will remain Greece’s dominant real estate investment market for the foreseeable future, but Thessaloniki does not need to challenge that position to become considerably more important.

The more meaningful test is whether Greece’s second city can develop sufficient scale, asset quality and liquidity to support diversified institutional portfolios. If it can, Thessaloniki will have moved beyond being simply Greece’s largest secondary property market and established an investment ecosystem capable of attracting capital across several sectors on its own merits.

Source: CIJ.World Research & Analysis Team

Spain’s Data Centre Race Is Becoming a Battle for Electricity

Spain’s rapidly expanding data centre industry is changing the way development sites are assessed. A large industrial plot in the right location is no longer enough. Increasingly, the decisive question is whether the electricity infrastructure exists to support what developers want to build.

Madrid remains the country’s largest established data centre market, but the geography of new investment is broadening. Aragón has emerged as a major development location, while Barcelona continues to attract projects supported by its business base, international connectivity and telecommunications infrastructure.

The growth of Aragón is particularly significant because it demonstrates how electricity infrastructure can influence real estate geography. Large technology investments planned for the region have elevated an area previously outside Spain’s dominant data centre cluster into one of the country’s most important locations for future capacity.

Spain’s expanding renewable energy sector strengthens the country’s attraction for digital infrastructure. However, renewable generation and electricity immediately available to a development site are two very different things. A region may generate substantial amounts of wind or solar electricity while an individual project still faces limitations relating to transmission infrastructure, substations or the capacity of the local network. For developers, the relevant question is therefore not simply how much electricity is produced nearby, but how much can actually reach a particular site and when.

That distinction has significant implications for land. Two neighbouring industrial plots could appear almost identical when judged by conventional property measures. Both might have suitable road access, similar planning status and comparable land values. Yet they can have dramatically different potential for data centre development if one can obtain the required electricity connection within a workable timetable and the other cannot.

This is making electricity due diligence an increasingly important part of site selection. Before committing substantial capital to land, developers need to understand the capacity of nearby substations, the status of grid connections, possible reinforcement works and the likely timetable before electricity can be supplied. Fibre connectivity, planning, environmental requirements and water availability can then be assessed alongside the power question.

Madrid illustrates both the strength and complexity of an established market. Its concentration of businesses, telecommunications infrastructure and existing data centres makes it a natural location for further investment. At the same time, continued development increases competition for sites capable of accommodating large electricity requirements.

Barcelona offers another established digital economy with strong international connectivity. However, as with Madrid, the theoretical availability of development land does not automatically translate into executable data centre projects. Electricity, fibre, planning and technical feasibility all have to align.

Aragón presents a different proposition. Its land availability, renewable generation and location between several major Spanish economic centres have helped make the region increasingly relevant to large-scale digital infrastructure. Major technology investments have reinforced that position and demonstrated that data centre development does not necessarily have to follow Spain’s traditional commercial property hierarchy.

Artificial intelligence is likely to make access to electricity still more important. AI computing infrastructure can require very substantial power capacity, particularly at the largest facilities. As developers plan increasingly powerful campuses, locations capable of supporting those electrical loads become more valuable strategically.

This could gradually alter the economics of industrial land. A site with a realistic route to planning approval, high-capacity electricity and fibre connectivity may attract substantially greater developer interest than conventional industrial land nearby. The precise value difference will depend on the project, location and certainty surrounding the infrastructure rather than any standard price per megawatt.

That makes the development process particularly interesting for property investors. Value can potentially be created well before a data centre is constructed. Identifying suitable land, progressing planning, resolving infrastructure requirements and establishing a credible electricity connection can move a site considerably closer to becoming an executable project.

The process also creates substantial risk. Acquiring land does not guarantee that sufficient electricity will become available on the timetable assumed when the investment was made. Delays to grid infrastructure can therefore affect development programmes, financing and ultimately the economics of the site. Investors consequently need to distinguish between electricity that may become available at some point and capacity that has a credible route towards being delivered.

This distinction could increasingly influence competition for sites. Specialist data centre developers and operators are the obvious participants, but the amount of infrastructure required to prepare large digital campuses may also create opportunities for investors with experience in energy, infrastructure and complex land development.

The boundary between property development and infrastructure investment is therefore becoming increasingly blurred. Traditional industrial developers primarily consider land, access, planning, construction costs and occupier demand. Data centre developers must evaluate all of those factors while also addressing electricity infrastructure and telecommunications requirements that can determine whether a project is technically possible.

For regional Spain, that creates an important opportunity. Areas outside Madrid and Barcelona that combine suitable land, electricity infrastructure, renewable generation and strong fibre connections could become credible locations for future investment. Aragón has already demonstrated how quickly a regional market can gain strategic importance when these factors come together.

That does not mean every location with renewable electricity will become a data centre hub. Large facilities require a much broader ecosystem involving grid capacity, telecommunications, planning, construction capability, environmental considerations and access to specialist services. The winners are likely to be locations where those requirements can be assembled with sufficient certainty to justify billions of euros of long-term investment.

For Spain’s property market, this changes how data centre land should be examined. Plot size and price remain important, but neither tells investors whether a project can actually be delivered. Madrid, Aragón and Barcelona are already demonstrating different versions of this equation. Their future growth will depend partly on how effectively electricity infrastructure can keep pace with the enormous computing requirements being proposed.

As Spain competes for the next generation of European digital infrastructure, the most valuable development sites may therefore not necessarily be those offering the cheapest land. They may be the ones where the electricity is actually ready.

Source: CIJ.World Research & Analysis Team

The Netherlands Is Looking for New Homes in the Buildings It Already Has

The Dutch housing shortage is beginning to change the way investors may need to think about obsolete property. An ageing office, redundant school, struggling commercial building or underused business site may no longer be valuable primarily for the activity it was originally designed to accommodate. Increasingly, its more important value could lie in its potential to become housing. This possibility is moving further into national housing policy. The Dutch government is seeking to increase residential supply not only through conventional construction but also by making better use of buildings that already exist. Conversions, additional floors, subdivision and more intensive occupation are all part of that approach. The scale is already meaningful. Over the past decade, property transformations have produced approximately 10,000 homes a year on average, while the government believes broader measures to use existing buildings more efficiently could make a further significant contribution to annual housing production.

For property investors, this creates a different way of looking at ageing commercial stock. Instead of asking only how much rent a building can continue generating in its existing use, the more important question may increasingly be how many homes the property could realistically accommodate and what it would cost to create them. Offices provide one of the clearest opportunities. The Dutch office market is becoming increasingly selective as companies concentrate on modern, efficient and well-connected buildings. Older properties can remain physically functional while gradually becoming less attractive to corporate tenants. Owners then face a choice between investing heavily to improve the office, accepting weaker rental performance or considering another use.

Housing can become particularly interesting where an older office occupies an established urban location. Public transport, shops, employment and other services may already surround the property, giving it advantages that would take years to establish around a new development site. The existing structure can also potentially be reused rather than completely replaced. But the economics can vary enormously between apparently similar buildings. Offices with suitable dimensions, sufficient natural light and adaptable structures may convert relatively efficiently. Deep floorplates, difficult structural layouts, inadequate façades or obsolete technical systems can make another building extremely expensive to transform. A property that appears inexpensive because its office value has declined can therefore become costly once the full conversion programme is understood.

Retail buildings present another opportunity. Changes in consumer behaviour and retail networks have left some secondary commercial properties facing uncertain long-term demand. Not every shop should become housing, particularly where active retail is essential to the surrounding neighbourhood, but redundant upper floors, oversized commercial buildings and weaker secondary locations can offer possibilities. Mixed use may prove more appropriate than complete residential conversion. Commercial space can remain at street level while upper floors become apartments, allowing a property to retain economic activity while adding housing. In other situations, groups of neighbouring properties may need to be considered together to create a viable redevelopment.

Former schools offer a different proposition. Many occupy established residential areas and have large windows, communal spaces and surrounding land. Those characteristics can make them attractive candidates for alternative use, but classroom layouts do not automatically translate into efficient apartments. The investment case depends on whether the existing structure can be incorporated into the new design without requiring so much reconstruction that conventional redevelopment would have been more economical. Older care buildings may also offer opportunities, particularly as demand grows for housing suited to an ageing population. Properties that no longer meet modern institutional or healthcare requirements can still occupy suitable residential locations. Depending on their structure and planning position, some may support conventional housing, senior accommodation or combinations of independent homes and services.

The opportunity becomes considerably larger when the focus shifts from individual buildings to entire commercial areas. Dutch cities contain business districts and employment locations with older offices, warehouses, extensive parking areas and relatively low development density. Some could eventually support substantially more intensive use. Transforming these areas is much more complicated than converting a single building. New residents require public transport, schools, shops, healthcare, public space and other neighbourhood infrastructure. Existing businesses may need to continue operating, while noise and environmental restrictions can limit where housing is possible. The most successful projects therefore need to create functioning neighbourhoods rather than simply replace commercial floor area with apartments.

For investors, acquisition price is fundamental to every version of this strategy. A building bought at a valuation based on strong commercial income can be extremely difficult to convert profitably. Transformation becomes more attractive when the value of the existing use has fallen sufficiently to compensate the investor for construction costs, planning uncertainty and development risk. This creates an important relationship between obsolescence and residential value. Declining demand for an office or commercial property does not necessarily mean that the underlying site is losing value. In some circumstances, the value is shifting from the building’s current use towards its redevelopment potential.

Construction costs determine whether that potential can be realised. Conversion can preserve significant parts of an existing structure, but it can also reveal expensive problems. Heating and ventilation systems may need replacement, façades may require reconstruction and fire protection, acoustics, access and daylight conditions must satisfy residential requirements. Older buildings may also require substantial improvements to their energy performance. These costs make detailed technical investigation essential before acquisition. A relatively cheap commercial property can become an expensive housing project if structural or technical problems are discovered after the transaction.

Taxation can alter the calculation further. VAT and property transfer taxes depend on the circumstances of the acquisition and redevelopment, meaning two projects with similar construction budgets can produce different financial outcomes depending on how the transaction and property are structured. Investors comparing an existing building with a conventional development site therefore need to consider taxation from the beginning rather than treating it as a secondary transaction cost.

Planning remains another major source of risk. Ownership of a commercial property does not automatically provide permission to introduce housing. Municipalities must determine whether residential use is appropriate, how much development the site can support and what proportion of the resulting homes should fall within different affordability categories. Parking, public space, infrastructure and environmental conditions can further influence the final scheme. The government’s increasingly active approach to using existing buildings is therefore important because greater predictability could make transformation easier to finance. Public support is also becoming more significant. National financing mechanisms have been expanded to help bring difficult transformation projects forward, particularly where redevelopment contributes affordable housing.

This does not remove development risk. It does, however, demonstrate that converting existing property is becoming an increasingly important component of the country’s housing strategy rather than a marginal solution applied only to occasional empty offices. The comparison with development land is consequently becoming more interesting. A cleared site allows a developer to design housing specifically around modern requirements, without having to work around existing structures. But land brings its own challenges. Planning can take years, infrastructure may need substantial investment and electricity, transport, environmental and other constraints can delay construction.

Existing buildings start from a different position. Many already sit within established urban areas and have roads, utilities and public transport nearby. Some possess structures that can be reused, potentially reducing the amount of demolition and new construction required. Existing infrastructure can be an advantage, although investors still need to establish whether connections have sufficient capacity for the proposed residential development. Neither approach is automatically cheaper. The investment opportunity lies in finding situations where the commercial value of a property has declined further than the residential potential of the site. Those buildings can create an unusual pricing opportunity because traditional investors may value them according to weakening existing income while transformation specialists value them according to what can eventually replace it.

That could gradually create a more recognisable market for conversion assets. Investors may begin targeting ageing offices, institutional buildings and underused commercial sites specifically because of their housing potential. Their valuation models would focus less on existing lease income and more on achievable residential density, construction complexity, planning probability and the value of the completed homes. Specialist capital could have an advantage in such a market. Investors capable of evaluating structures, navigating planning and managing complicated redevelopment programmes may identify value that conventional office or retail owners cannot easily realise.

Not every unwanted commercial building will qualify. Some will be in unsuitable locations, some will cost too much to transform and others will remain more valuable in their existing use. Conversion cannot replace the large volume of conventional construction the Netherlands still requires. But the country’s housing shortage means that obsolete buildings are becoming increasingly difficult to dismiss simply as yesterday’s property problem. They can also be tomorrow’s development sites.

For Dutch investors, the next competition for residential opportunities may therefore take place not only over vacant land but also over buildings whose original economic purpose is disappearing. The winners will be those able to recognise when an ageing commercial asset is worth more for the homes it could contain than for the activity it was originally built to serve.

Source: CIJ.World Research & Analysis Team

Dutch Logistics Is Building a Growing Divide Between Prime and Ageing Warehouses

The Dutch industrial and logistics market is sending two apparently conflicting signals in 2026. Companies are taking more space, but the amount of property available to occupiers is also increasing. The combination suggests that the market’s next challenge may be less about the overall quantity of warehouse space and more about whether the available buildings match what businesses actually need. Around 1.8 million square metres of industrial and logistics property was taken up during the second quarter of 2026, approximately 12% more than during the same period a year earlier. At the same time, available supply increased from roughly 6.8 million square metres to around 7.7 million square metres.

The 7.7 million square metres should not be interpreted simply as empty warehouses. Available supply can include completed space as well as property being marketed before completion. Nevertheless, the increase is significant because it is occurring while occupier activity remains relatively strong. This raises an important question for investors. If demand is recovering, why is more property becoming available? Part of the answer may lie in the widening differences between individual buildings and locations. A logistics company does not choose a distribution centre simply because the required number of square metres exists. The building must work within a much larger operational network.

Location remains fundamental. The Netherlands occupies a strategic position within European distribution because of its ports, motorway infrastructure, connections with Germany and Belgium and proximity to large consumer markets. Within the country, however, occupier demand continues to concentrate in established logistics corridors. Tilburg and Venlo illustrate the point. Both markets have developed into major distribution locations because they provide access to international transport routes and European supply chains. Rotterdam and the Schiphol region have different advantages but similarly benefit from infrastructure and connectivity that cannot easily be reproduced elsewhere. An available warehouse in one part of the Netherlands therefore cannot necessarily satisfy demand in another.

The difference becomes even greater when building specifications are considered. Modern distribution operations increasingly depend on the efficient use of cubic rather than simply floor space. Greater internal height can accommodate sophisticated storage systems and allow companies to handle more goods from the same building footprint. Floor quality, structural layout and column spacing can also influence whether automated equipment can be installed efficiently. A large warehouse constructed for an earlier generation of logistics may consequently provide less operational capacity than a smaller but more sophisticated modern building. Loading infrastructure creates another dividing line. High-volume distribution requires sufficient loading doors, appropriate yards and enough manoeuvring space to handle intensive vehicle movements. Buildings that cannot accommodate these operations may remain perfectly usable for smaller businesses while becoming increasingly unsuitable for major logistics occupiers.

Automation is accelerating the difference. Distribution centres are becoming increasingly technological, with automated storage, robotics, conveyor systems, sorting equipment and digital inventory management changing both the operation and physical design of warehouses. As a result, companies moving between properties may increasingly be seeking better buildings rather than simply more space. This distinction is important for investors because strong logistics demand does not necessarily support every warehouse equally. Occupiers can reduce their use of older properties while simultaneously taking modern space elsewhere, leaving national take-up relatively healthy while weaker buildings accumulate in available supply.

Electricity capacity is adding another layer to this process. The Dutch electricity network faces significant congestion in several regions, while logistics operations are becoming more dependent on power. Automation, refrigeration, building systems and other equipment can require substantial electricity supplies. Commercial transport could increase those requirements further. As delivery vans and eventually larger vehicles become increasingly electrified, some distribution centres will require significant charging infrastructure. A warehouse designed twenty years ago may therefore face a problem that has little to do with the physical condition of its walls or roof. It may simply lack the infrastructure required by the next generation of occupiers.

For power-intensive operations, this could become an important measure of competitiveness. Two warehouses can have similar floor areas, motorway access and loading facilities but offer completely different possibilities if one can accommodate substantial additional electricity demand while the other cannot. Environmental performance is creating a similar distinction. Major occupiers increasingly examine building efficiency as part of their property decisions. Energy consumption influences operating costs, while corporate environmental commitments can affect which buildings companies are prepared to occupy. Older warehouses may therefore require substantial investment not because they have reached the end of their physical lives but because they no longer meet the operational and environmental requirements of their target tenants.

This is where the Dutch logistics market begins to separate into different investment categories. At the strongest end are modern buildings in established logistics locations with specifications and infrastructure capable of supporting sophisticated occupiers. These assets can continue attracting tenants and institutional investors even if national available supply increases. A second group consists of older buildings that can remain competitive after refurbishment. Improvements to energy systems, roofs, offices, loading facilities or technical infrastructure may extend their economic life considerably.

Whether that investment makes sense depends heavily on location. An ageing warehouse in a major distribution corridor may justify significant expenditure because the underlying occupier demand remains strong. The same building in a weaker market may not generate enough additional rent or value to support an equivalent refurbishment programme. This creates another category of properties where redevelopment may eventually become more attractive than renovation. Some older warehouses occupy strategically valuable sites. If planning, infrastructure and development economics permit, replacing the existing building with a modern facility may produce a better long-term return than repeatedly upgrading an ageing structure. For investors with development expertise, such sites could become an important source of opportunity.

The most difficult properties are those where none of these strategies works particularly well. They may be too outdated to attract major occupiers without substantial investment, while the location may not support the rents required to justify refurbishment. At the same time, the land value may be insufficient to make complete redevelopment attractive. These warehouses are not necessarily empty. They can continue attracting smaller businesses or companies with relatively straightforward operational requirements, but their future occupier base may gradually narrow as larger logistics businesses demand more sophisticated buildings.

This creates the risk of economic obsolescence long before physical obsolescence. A warehouse can remain operational while becoming progressively less competitive. Rents may fall relative to modern buildings, incentives may increase and owners may need to commit more capital simply to maintain occupancy. For investors, that changes the meaning of supply statistics. The important question is not simply how many square metres are available across the Netherlands. It is how much of that space satisfies the requirements of the businesses generating the strongest demand.

A company looking for a large distribution centre in a particular corridor may begin with apparently abundant national supply. Once location, internal height, loading infrastructure, automation capability, electricity capacity and environmental performance are considered, the number of realistic alternatives can become much smaller. This explains how increasing availability and shortages can exist simultaneously. The Netherlands can have more logistics property on the market while modern facilities in selected locations remain relatively difficult to secure.

That distinction also matters to developers. Adding another warehouse to national supply does not necessarily address occupier demand if the property is built in the wrong location or without the infrastructure required for future operations. Development therefore needs to be increasingly selective. The strongest projects are likely to be those designed around how logistics companies will operate over the next decade rather than simply around today’s minimum building specification. Electricity, automation, transport electrification and energy efficiency could become as important to long-term competitiveness as conventional considerations such as loading doors and motorway access.

Lenders face the same challenge. The Netherlands can remain one of Europe’s strongest logistics markets while individual properties become increasingly difficult to finance if their future competitiveness is uncertain. Assessing a warehouse therefore requires looking beyond national take-up and supply. Banks and investors need to understand whether the building will remain suitable for the occupiers expected to use it throughout the investment period. The result could be an increasingly pronounced pricing difference between prime and secondary logistics property, with capital continuing to concentrate on modern buildings in established corridors while investors demand larger discounts for properties requiring significant expenditure or carrying greater leasing risk.

This does not mean the Netherlands already has a quantified surplus of obsolete warehouses. Nor does increasing available supply demonstrate that the country’s logistics market has entered a conventional downturn. Instead, the figures point towards a more complicated adjustment. Some of the additional supply will find occupiers. Some buildings will be successfully modernised. Others will be replaced. But a portion of the existing stock could face increasing difficulty competing as logistics operations become more technologically and infrastructure intensive.

The Netherlands may therefore be moving towards a market where measuring warehouses purely by square metres becomes progressively less useful. The more important distinction will be between buildings capable of supporting the next generation of logistics operations and those designed around the requirements of the previous one. If that divide continues widening, Dutch logistics could experience strong demand and excess supply at the same time. The shortage would be in the buildings companies want. The surplus would increasingly be found among the buildings they are leaving behind.

Source: CIJ.World Research & Analysis Team

Chișinău’s Housing Boom Is Running Into the Limits of What Buyers Can Borrow

Chișinău’s residential market is approaching a point where the availability of housing is becoming less important than the ability of households to finance it. Property values have risen rapidly, mortgages have become increasingly important to completed transactions and household incomes have struggled to keep pace with the cost of buying a home. At the same time, transaction volumes have weakened significantly. Together, these trends raise an increasingly important question for Moldova’s residential developers: are they delivering homes at prices local households can realistically finance, or has expanding access to mortgage credit allowed property values to move increasingly beyond domestic purchasing power?

Evidence from the first half of 2026 suggests that borrowing has become a major component of residential demand. Across Chișinău and its suburbs, 725 houses changed hands during the first six months of the year, compared with 1,012 during the same period of 2025. That represents a decline of approximately 28%. Of the houses purchased during H1 2026, 435 involved mortgage financing. In other words, around 60% of completed house transactions depended on bank credit.

The apartment market tells a similar story. Approximately 5,493 apartment transactions were recorded during the first half of 2026, around 27% fewer than a year earlier. Mortgage-financed apartment purchases reached 1,577 during the first quarter and 1,797 during the second. The important signal is therefore not simply that Moldovans are borrowing to buy homes. It is that mortgage finance now represents a substantial component of transactions at the same time as the overall number of homes being sold is falling.

That creates a very different residential market from one supported primarily by accumulated savings, investment capital or money earned abroad. Moldova’s large diaspora remains important to housing demand, and cash purchasers have certainly not disappeared. Investors and buyers acquiring unfinished apartments also operate differently from households purchasing completed homes with conventional mortgages. There is not yet sufficient evidence to conclude that Moldova has completed a structural transition from a cash and diaspora-supported residential market into one dominated by credit. But there is increasingly strong evidence that mortgage availability has become one of the principal factors determining whether transactions can take place.

That matters because incomes are not increasing nearly as quickly as nominal wage statistics initially suggest. Average gross monthly earnings reached MDL 16,895.7 during the second quarter of 2026, 9.2% higher than a year earlier. Once inflation is taken into account, however, the increase in real purchasing power was only 2.3%.

For a household trying to buy an apartment in Chișinău, the difference is considerable. A family can receive a salary increase while simultaneously finding that the home it hoped to purchase has moved further beyond its financial reach. If residential prices continue increasing faster than real incomes, the difference eventually has to be covered through larger deposits, larger mortgages, longer repayment periods or cheaper properties. There are limits to each of those solutions.

Moldova’s lending rules generally restrict debt repayments to a proportion of household income, although higher limits are possible for certain categories of borrower. Property loans can also run for as long as 30 years. These safeguards are intended to prevent households from taking on debts they cannot service. For the property market, however, they create something else: a boundary around the amount buyers can spend.

Once apartment prices move beyond that boundary, developers face a choice. They can reduce prices, offer different payment arrangements or change what they build. The last option could become increasingly important. If buyers cannot finance a 75 sqm apartment, a developer may be able to sell them a 55 sqm apartment instead. The total purchase price falls even if the price charged for each square metre remains relatively high. That means deteriorating affordability does not necessarily result immediately in falling headline property prices. It can result in smaller homes.

Developers can also alter the composition of projects, increasing the proportion of compact one- and two-bedroom units while reducing larger family apartments. Construction can be divided into smaller phases, payment schedules extended and relationships with mortgage providers incorporated more directly into the sales process. The residential development model then begins adapting to the borrowing capacity of the buyer.

There are already reasons to examine whether this process is becoming more important in Chișinău. The International Monetary Fund has identified rapid credit expansion during 2024 and 2025 alongside wider access to government-supported housing finance as factors contributing to stronger mortgage lending and residential price growth. That does not mean mortgages alone caused Moldova’s increase in property values. Construction costs, limited supply, land availability, household formation, investment demand and diaspora capital can all influence prices. But easier access to financing increases the amount buyers can bid for housing.

When supply cannot respond quickly enough, part of that additional purchasing capacity can be reflected in higher property values rather than greater housing affordability. This creates a paradox. Mortgage programmes are intended to make home ownership more accessible. But when additional borrowing capacity enters a market where housing supply is constrained, some of the benefit can ultimately be absorbed by higher prices.

The problem becomes more visible when credit expansion slows. If banks become more cautious, borrowing costs rise or households reach lending limits, developers can no longer rely on steadily increasing mortgage capacity to support sales. The first consequence does not necessarily have to be falling property prices. It may instead be falling transaction volumes.

There are already signs of precisely that tension. House transactions across Chișinău and its suburbs fell sharply during H1 2026. Apartment sales also declined substantially. Yet mortgage finance remained important to the purchases that were completed. That suggests credit may increasingly be supporting transactions in a market where fewer households can afford to buy.

For developers, this makes the total cost of an apartment more important than ever. Price per square metre remains one of the standard measurements used to describe residential markets, but banks do not finance percentages or market averages. They finance individual households purchasing properties at specific prices. A developer may therefore discover that the most important number in a project is not €2,000 or €2,500 per square metre. It is the maximum total purchase price that a typical buyer can finance while remaining within lending requirements.

That could gradually reshape Chișinău’s development pipeline. Projects aimed at internationally earned income, investors and wealthier households may continue supporting larger apartments and higher total purchase prices. Developments targeting locally employed households may increasingly need to be designed around mortgage affordability.

The market could consequently become more segmented. At one end would be buyers with substantial savings, diaspora income or investment capital who are relatively insensitive to domestic mortgage limits. At the other would be households whose purchasing capacity is determined largely by salaries, deposits and the amount a Moldovan bank is prepared to lend. The balance between those two groups will help determine what developers build next.

There is another important consequence. If developers respond to affordability pressure primarily by reducing apartment sizes rather than prices, residential statistics may disguise what is happening. Average prices per square metre could remain high or continue rising while the amount of living space households can afford declines. The market would appear resilient on paper even as buyers progressively compromise on apartment size.

This is why transaction volumes, mortgage values, household incomes and average apartment sizes need to be considered alongside property prices. Chișinău is not necessarily approaching a housing-price correction. There is insufficient evidence to make that conclusion. But the first half of 2026 demonstrates that the residential market is already adjusting. Transactions have fallen substantially. Mortgages account for a significant proportion of completed purchases. Real wage growth remains modest, and affordability continues to constrain households.

The next stage will depend heavily on what happens to credit. If wages gradually catch up with residential values while mortgage availability remains healthy, the market could absorb today’s pricing over time. If prices continue moving faster than household purchasing power, developers may increasingly have to reduce apartment sizes, restructure payment terms or accept slower sales.

If mortgage expansion itself weakens significantly, the effect could expose just how much of Chișinău’s current residential pricing depends on buyers being able to borrow. For Moldova’s housing market, that is becoming the more important measure of affordability. The question is no longer simply how much an apartment costs. It is how much debt a household needs before it can call that apartment home.

Source: CIJ.World Research & Analysis Team

Italy’s €7 Billion Property Recovery Is Hiding a Much More Selective Market

Italy’s commercial property market has produced one of Europe’s more striking investment recoveries in 2026. Depending on how transactions are classified, approximately €7 billion to €7.8 billion was invested during the first half of the year, substantially above the comparable period of 2025. International capital accounted for the majority of activity, while private investors and family-controlled wealth also committed significant sums. On the surface, the figures suggest that Italy has moved decisively back onto the international investment map. Beneath the headline volumes, however, a more complicated market is emerging. The recovery is not being driven by one type of investor buying broadly across Italian property. Instead, several pools of capital are operating simultaneously, each pursuing different assets, locations and levels of risk.

International capital provides the clearest evidence of Italy’s renewed appeal. One major adviser estimates that foreign investors represented approximately three-quarters of investment during the first six months of 2026, while another calculates a somewhat lower share across the half year but places the foreign contribution to second-quarter transactions at 77%. Differences between these figures reflect the way transactions are counted, but the conclusion is consistent: international investors have returned in substantial numbers. Where that money is going is more revealing than the percentage itself. Large retail transactions, logistics portfolios, hotels and selected major properties have attracted significant international interest, showing that Italy has clear evidence of international liquidity without necessarily having equal liquidity across the entire property market.

Large institutions generally need transactions capable of absorbing substantial amounts of capital. Buying individual small properties across numerous Italian cities can require considerable management for relatively little deployment. A major shopping-centre transaction, logistics portfolio or large hotel acquisition solves that problem. This helps explain why national investment volumes can rise rapidly when several major properties or portfolios trade, even though smaller and more difficult assets continue to struggle for buyers. Retail illustrates the effect particularly clearly. Investment exceeded €2 billion during H1 under several market estimates and international capital was responsible for a substantial share, but a limited number of large transactions contributed heavily to the total.

Private equity approaches Italy differently. Rather than requiring finished properties with predictable income, these investors can pursue opportunities where value can be created through renovation, redevelopment, leasing, repositioning or operational improvement. Italian hotels provide one of the clearest examples. The country’s hospitality sector has attracted substantial investment during 2026, but many opportunities involve properties requiring capital expenditure, new management, different branding or complete transformation. Italy’s ageing building stock creates similar possibilities across other sectors. Historic hotels can be upgraded, offices can potentially become hospitality or residential properties, older shopping centres can be repositioned and former industrial sites can be redeveloped. The challenge is that planning restrictions, historic protections and construction costs can make such projects complicated, meaning private equity will accept the risk only where the acquisition price leaves sufficient room to create value.

Private wealth has meanwhile become one of the most important forces in the market. Family offices, family-controlled investment companies and wealthy individuals deployed approximately €1.7 billion into Italian property during the first half of 2026 according to one major market estimate, representing more than one-fifth of total investment under the same methodology. The figure was influenced by a particularly large trophy transaction, but the scale remains significant. More revealing is the type of property this capital prefers. The great majority of private-wealth investment was directed towards high-quality, lower-risk assets, suggesting wealthy private investors are not simply replacing institutions in difficult properties but are frequently competing for some of the country’s best real estate.

Italy is particularly well suited to this form of capital. Milan and Rome offer buildings in locations that are difficult to reproduce, while Venice and Florence provide historic scarcity. Lake Como, the Amalfi Coast, Sardinia and Tuscany contain hospitality and other properties whose value derives partly from geography and international recognition. For investors capable of holding assets for decades, these characteristics can matter almost as much as short-term movements in property yields. This creates an important difference between institutional and private investment. A fund generally has a defined investment period and must eventually return capital to its investors, while a family office can potentially own a property across generations. An asset that appears expensive to a fund seeking a particular return over seven or ten years can still make sense to a private investor concerned with long-term capital preservation, scarcity and diversification.

Middle Eastern capital adds another layer. Interest from investors based in the region has been increasing, particularly for prime hotels in major Italian cities and internationally recognised leisure destinations. It would be premature to describe Middle Eastern buyers as dominant across Italian commercial property, but their growing attention illustrates how Italy’s buyer base is expanding beyond conventional European and North American institutions. Hospitality is a natural entry point because a luxury hotel in Rome, Milan, Venice, Florence, Lake Como or another internationally recognised destination combines an operating business with ownership of scarce real estate. Investors with long holding periods may place substantial value on controlling such properties even when the initial financial return is lower than could be achieved elsewhere.

Domestic investors remain another important part of the market, although their contribution can disappear behind statistics showing foreign dominance. Italian private investors, property companies and family-controlled businesses often possess advantages in transactions requiring local knowledge, complicated redevelopment or smaller investment sizes. They can also operate in markets that are too small to attract large international institutions. Their role becomes particularly important outside the largest transactions. An international fund may not pursue a €10 million building in a regional city, while a domestic investor familiar with local occupiers and planning conditions may see an attractive opportunity. Regional liquidity can therefore depend much more heavily on Italian capital than the national investment figures suggest.

Owner-occupiers form perhaps the most distinctive buyer category because their calculations can be fundamentally different from those of property investors. Manufacturers, logistics operators, retailers and other businesses sometimes purchase the properties they occupy because control of the location has strategic value. A manufacturer may be willing to pay for a site because it contains sufficient electricity, specialist infrastructure and access to skilled labour, while a retailer may acquire a prime store because the location is critical to its brand. Neither buyer necessarily evaluates the property primarily according to the rental yield an institutional investor would require. Their participation can therefore create competition for assets that conventional real-estate pricing models do not fully explain.

Breaking the buyer pool into these categories reveals why Italy’s recovery should not be interpreted simply as the return of a single institutional market. Different investors are effectively buying different versions of the country. International institutions want scale, liquidity and assets capable of accommodating large amounts of capital. Private equity seeks situations where complexity can be turned into value. Family offices favour quality and scarcity. Middle Eastern investors are exploring selected trophy opportunities. Domestic buyers exploit local knowledge, while owner-occupiers place strategic business value on particular properties. The differences become even clearer when examining what these investors are reluctant to buy.

An ageing office building in a secondary location, for example, can struggle to satisfy any of these groups. It may be too small or management-intensive for a large international fund, too expensive for a value-add investor once refurbishment costs are included, insufficiently prestigious for private wealth and irrelevant to an owner-occupier unless it serves a specific operational purpose. This helps explain the increasingly visible divide within Italian offices. Companies in Milan continue to compete for modern, efficient buildings in the best locations, while older stock can face much weaker demand. Investors recognise the same distinction. A prime building with strong tenants can attract several categories of capital, whereas an obsolete property requiring substantial expenditure may have a dramatically narrower buyer pool.

Retail demonstrates a similar division. The resurgence in investment does not mean every shopping centre has suddenly become attractive. Dominant centres, successful retail parks, outlet destinations and prime high-street properties can command substantial interest because investors can understand their competitive position. Secondary centres with declining footfall, expensive refurbishment requirements or uncertain tenant demand remain much harder to finance and sell. Industrial property is also becoming more selective. Modern logistics portfolios continue to attract institutional buyers, while companies themselves compete for strategically important buildings, but older industrial properties without sufficient power, suitable infrastructure or redevelopment potential can remain stranded despite the strength of headline logistics investment.

Hotels sit closer to the other end of the spectrum. Italy’s combination of tourism demand, international brands, historic buildings and scarce destinations has created opportunities for several categories of capital. Institutions can buy established hotels, private equity can reposition underperforming properties, private wealth can acquire trophy assets and international investors can gain exposure to locations with worldwide recognition. Alternative property sectors further complicate the national picture. Data centres, student accommodation and other specialised assets are attracting capital because their investment cases depend on structural demand rather than the conventional office or retail cycle. Data-centre development around Milan, for example, can be driven as much by electricity availability and digital infrastructure as by traditional property considerations, while student housing investment reflects the shortage of professionally managed accommodation rather than normal residential-market dynamics.

The composition of investment therefore matters as much as the total. Several billion euros of transactions concentrated in large portfolios, trophy assets and specialised sectors can coexist with significant illiquidity elsewhere. A country can simultaneously experience intense competition for a rare hotel, strong bidding for a logistics portfolio and almost no market for an obsolete secondary office building. That is the contradiction behind Italy’s 2026 recovery. Capital has returned, but it has returned with conditions. Investors want better buildings, stronger locations, greater scale or a convincing reason to accept additional risk. The repricing that followed higher interest rates has helped bring buyers and sellers closer together, but it has not eliminated concerns about refurbishment costs, energy performance, tenant demand or future liquidity.

This selectivity could ultimately be healthy for the market. Italy spent years competing with larger European investment destinations for international capital. The return of multiple categories of buyers creates greater depth and provides owners with more potential exit routes. A property no longer has to appeal exclusively to a traditional institutional fund if it can attract private capital, an operator or a specialist investor instead. But the diversity of capital should not be confused with universal liquidity. The crucial question for the remainder of 2026 is whether investment spreads beyond the exceptional transactions currently supporting the market. A genuinely broad recovery would require more activity in ordinary offices, smaller regional properties, residential investment and buildings requiring manageable refurbishment rather than only portfolios and trophy assets.

Italy has unquestionably regained the attention of global property investors. What has not yet been demonstrated is that every part of the market has recovered with it. The €7 billion headline tells the story of how much money is being invested. The more important story is who is providing that money, what they are prepared to own and which properties they continue to avoid. Seen through that lens, Italy is not experiencing one property recovery but several recoveries at the same time, each driven by a different type of capital. The strongest assets can now attract buyers from across the world, while weaker properties may still be waiting for the price, redevelopment plan or investor capable of making them investible again. That divide, rather than the headline transaction volume alone, will determine whether 2026 marks the beginning of a genuinely broad Italian property recovery or simply an exceptionally strong year for the parts of the market global capital wants most.

Source: CIJ.World Research & Analysis Team

Germany’s Property Recovery Is Leaving a Hidden Market Behind

Germany’s real estate investment market appears to be recovering, with approximately €16.2 billion invested during the first half of 2026 under one major market measure, around 13% more than a year earlier. Other market estimates place the total slightly higher, confirming that transaction activity has improved after several difficult years. But the headline number tells only half the story. The properties that sold during the first six months of the year were not necessarily representative of Germany’s entire commercial real estate market. Investors remained highly selective, capital gravitated toward better buildings and established locations, and properties capable of securing conventional financing enjoyed a considerable advantage.

The more revealing question is therefore not how much German property changed hands, but how much property did not. Every investment-market statistic records transactions where a buyer and seller eventually agreed on value. It does not capture buildings that were considered for sale but never marketed, processes that were withdrawn, financing that failed, or properties retained because the price available in the market was below the owner’s expectations or outstanding debt. Germany potentially contains a substantial stock of these economically stranded assets, and their eventual resolution could determine the next stage of the country’s property cycle.

The contrast became particularly visible during the second quarter. While first-half investment volumes were higher than a year earlier, commercial transaction activity slowed between Q1 and Q2 under some market measures. Investors were simultaneously confronting renewed uncertainty around borrowing costs, economic growth and future property income. The result is not one German investment market but several operating at different speeds.

At one end are modern buildings in established locations with strong tenants, manageable capital requirements and predictable income. These properties can attract institutional equity, conventional bank financing and multiple potential buyers. At the other are older offices, weaker shopping centres, partially vacant buildings, highly leveraged portfolios and properties requiring substantial energy or technical upgrades. Capital is available for these assets as well, but often at a price or financing structure existing owners are unwilling or unable to accept. This difference is becoming one of the most important forces determining German property values.

The lending market illustrates the problem particularly clearly. Sentiment among German property lenders deteriorated sharply during the second quarter. Almost half of financing professionals surveyed during the period reported worsening financing conditions, while banks maintained tighter underwriting requirements for property-related lending. The significance goes beyond higher interest rates.

Banks are increasingly distinguishing between buildings according to the reliability of their future cash flow. A recently modernised property with long leases and strong tenants presents a relatively straightforward underwriting case. An ageing office with approaching lease expiries, weak energy performance and significant refurbishment expenditure creates several uncertainties simultaneously. The first building can support conventional institutional leverage. The second may require substantially more equity, expensive alternative financing or a lower acquisition price.

That financing difference eventually becomes a valuation difference. Suppose a property previously valued at €100 million supported €70 million of bank debt. If lenders are now willing to provide only €50 million against the same building because of higher interest rates, weaker leasing assumptions or future renovation requirements, a new buyer must contribute considerably more equity. If the buyer’s required return has also increased, the acquisition may only become viable at €80 million or less.

The existing owner may still value the building near €100 million. If outstanding debt is close to the price a new investor is prepared to pay, selling becomes even more difficult. The result can be a property that is neither conventionally financeable at the owner’s valuation nor immediately forced onto the market. It simply remains where it is.

This helps explain why Germany has not experienced the scale of distressed property sales that might have been expected after the rapid increase in interest rates. Commercial real estate problem loans have risen significantly since late 2023, while a substantial volume of debt is reaching refinancing dates during the current cycle. Yet lenders have frequently preferred extensions, restructuring and negotiated solutions rather than immediate enforcement.

That has prevented a disorderly liquidation of German property, but it may also have delayed price discovery. A loan extension can provide time for rents to improve, interest rates to fall or an owner to inject additional equity. In those cases, restructuring can successfully protect value. But an extension does not automatically solve an asset-level problem. An obsolete building remains obsolete. Vacancy remains vacancy. Required capital expenditure does not disappear. A loan that cannot be refinanced today may still face the same problem when an extension expires.

Germany could therefore be accumulating a pipeline of delayed transactions. Some of these properties will recover sufficiently to refinance normally. Others will be recapitalised. Some will receive new private debt or equity. Others may ultimately need to be sold. This suggests that the country’s future investment supply may increasingly come from capital structures that can no longer be maintained rather than from owners voluntarily rotating successful assets.

The office market provides the clearest example. German office investment increased strongly during the first half of 2026, with transaction volumes substantially above the previous year. On the surface, that could suggest that confidence in offices is returning. The composition of activity tells a more complicated story.

Buyers continue to favour buildings with strong specifications, credible environmental performance, central locations and reliable occupiers. The leasing market is displaying a similar pattern, with companies concentrating demand on modern offices while older stock faces greater difficulty attracting tenants. That creates a direct relationship between leasing performance and financing.

A bank considering a modern central office can examine current rents, tenant demand and comparable transactions with reasonable confidence. The future income of a weaker building is much harder to establish. If substantial refurbishment is required before the property can compete for tenants, the lender must also consider who will fund that expenditure. This is where older offices can become financially trapped.

Selling at a price acceptable to buyers may crystallise a loss the owner cannot absorb. Refinancing at the existing valuation may no longer be possible. Renovating the property requires additional capital that the owner may not have. The building therefore remains in the portfolio even though its previous capital structure no longer reflects market reality.

This is why transaction volumes alone can create a misleading impression of recovery. The properties appearing in investment statistics are disproportionately those capable of trading. The weakest assets are disproportionately absent.

Retail property presents a similar divide. A well-located grocery-anchored retail park with stable tenants and predictable consumer demand can still attract both debt and equity. A struggling shopping centre facing tenant departures, declining income and substantial repositioning expenditure presents a very different investment proposition. Both are technically retail assets, but financial markets increasingly treat them as different products.

Logistics provides a useful comparison because the underlying occupier market remains comparatively strong. Industrial and logistics take-up increased during the first half of 2026, vacancy in modern large-format properties remained relatively contained and prime rents continued to show resilience. For lenders, those fundamentals provide greater confidence in future cash flow.

That makes modern logistics property comparatively straightforward to finance, particularly where locations have strong transport infrastructure and established occupier demand. The distinction emerging across Germany therefore runs deeper than office versus logistics or prime versus secondary. It is increasingly a division between predictable and uncertain income.

Building quality is part of that calculation. Energy efficiency has moved from being primarily a sustainability consideration to becoming a financial variable. An inefficient building can require substantial expenditure on heating systems, insulation, façades, windows and technical equipment. Those costs affect the amount an investor can pay and the amount a lender is willing to finance.

A buyer acquiring a €100 million building that requires another €20 million of refurbishment is effectively underwriting a €120 million investment before financing and transaction costs are considered. If rental growth after refurbishment cannot justify that expenditure, the building may be worth significantly less than its current owner believes.

This is one reason Germany’s older office stock is becoming particularly vulnerable. The challenge is not simply that companies prefer newer buildings. It is that bringing older properties back to institutional standards can require capital at precisely the moment when both debt and equity have become more expensive.

In some cases, refurbishment will make economic sense. In others, conversion to residential, hotel, education, laboratory or mixed-use property may offer a better route, subject to planning and building constraints. Some buildings may require demolition and redevelopment. Others may simply remain difficult to trade until values fall far enough for a new investor to accept the risk.

This is where future investment opportunities will emerge. Core institutional investors are likely to continue competing for properties with stable income and straightforward financing. As more capital returns to the market, competition for this relatively limited stock could increase. That could stabilise or even strengthen values for the best assets. At the same time, weaker buildings may continue losing value.

Germany could therefore experience a property recovery in which the difference between the strongest and weakest assets becomes larger rather than smaller. This would be an unusual but logical outcome. The same economic recovery that restores confidence in prime property does not automatically repair buildings facing structural problems.

An investor buying a modern office in Munich or Frankfurt is underwriting a different future from one acquiring an outdated office in a peripheral business district, even if both were once classified as institutional property. The repricing process increasingly happens building by building.

This creates opportunities for investors prepared to solve difficult capital structures. Value-add funds can acquire properties where refurbishment can restore competitiveness. Private-credit investors can finance situations traditional banks no longer want to support. Developers can acquire obsolete buildings for conversion or redevelopment. Distressed investors can purchase loans or assets where existing owners have exhausted their options.

The opportunity is not simply buying property cheaply. It is identifying buildings where the underlying real estate is worth more than the capital structure currently sitting above it. An overleveraged but fundamentally strong property can be rescued through recapitalisation. A poorly located building with weak demand cannot. Distinguishing between financial distress and real-estate obsolescence will therefore become increasingly important.

This also explains why the phrase “unfinanceable property” needs qualification. Almost any property can theoretically attract capital at the right price. Specialist lenders, private debt funds and opportunistic investors exist specifically to finance situations conventional banks reject. The real problem is whether a building can support financing at the valuation currently expected by its owner.

Many German properties may no longer pass that test. If an investor must pay substantially more for debt, contribute considerably more equity and fund extensive refurbishment, the purchase price has to adjust. Until owners accept that calculation, transactions remain difficult.

Time is gradually reducing their ability to wait. Loans mature. Interest hedges expire. Buildings require maintenance. Tenants leave. Energy requirements become more demanding. Equity investors eventually seek liquidity. Each of these events can force another valuation discussion.

This is why the refinancing cycle could become the mechanism through which Germany’s hidden property market eventually becomes visible. The process is unlikely to produce a sudden flood of foreclosures. German lenders have strong incentives to avoid unnecessary losses, while many borrowers still have access to restructuring options. Large investors can inject equity, extend maturities or sell individual assets to reduce leverage.

The more probable scenario is a gradual increase in motivated sales. One owner may dispose of an office to meet a refinancing requirement. Another may sell part of a portfolio to fund refurbishment elsewhere. A lender may encourage a borrower to bring in new equity. A developer may sell a project rather than refinance construction debt.

Individually, these transactions will not resemble a crisis. Collectively, they could provide a significant source of investment product through 2026 and 2027. This creates an interesting contradiction at the centre of Germany’s property recovery.

The best buildings could face increasing competition among buyers at exactly the same time as weaker assets experience greater selling pressure. One market could see yields stabilise or compress. The other could require further price reductions before transactions become viable.

The €16.2 billion invested during the first half of 2026 therefore should not be interpreted as evidence that Germany’s property correction is finished. It shows that liquidity is returning to the parts of the market where buyers, sellers and lenders can agree on value. The unresolved part of the cycle lies elsewhere.

It sits in older offices that require millions of euros of refurbishment, retail assets whose business plans no longer support previous valuations, developments unable to secure conventional financing and portfolios carrying debt arranged under assumptions that no longer apply. These assets are largely invisible in transaction statistics until somebody is forced to make a decision.

That may be the most important German investment story heading into 2027. If financing conditions improve substantially, some of the pressure can be absorbed. Refinancing becomes easier, transaction volumes increase and owners gain more options. But cheaper debt alone cannot solve structural property problems.

A building without sufficient tenant demand remains difficult to finance regardless of interest rates. An asset requiring excessive capital expenditure still needs someone to pay for it. A property valued above what investors can economically justify still needs to reprice.

The next phase of Germany’s investment recovery will therefore be determined not only by how much capital returns but by how much realism returns to valuations. The €16 billion that traded during the first half of 2026 shows that German property is becoming investible again. The buildings that did not trade may tell investors far more about what happens next.

Source: CIJ.World Research & Analysis Team

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