Slovak Mortgage Rates Edge Higher After ECB Policy Shift

Mortgage lending costs in Slovakia are beginning to rise after the European Central Bank (ECB) increased its benchmark interest rates in June, prompting several lenders to revise their home loan pricing.

The ECB raised its key interest rates by 25 basis points, with the changes taking effect on 17 June, citing persistent inflationary pressures while emphasising that future monetary policy decisions will depend on incoming economic data. This move has started to filter through to retail lending markets across the euro area.

Among the first Slovak banks to adjust their mortgage offers are Fio banka, UniCredit Bank and mBank, each introducing modest increases on selected fixed-rate mortgage products. The adjustments generally range between 0.10 and 0.20 percentage points, although the changes vary depending on the length of the fixed-interest period and the lender’s pricing strategy.

Not all financial institutions have followed the same approach. Some banks continue to compete for new borrowers through promotional offers and discounted mortgage products, highlighting that competition remains an important factor in the Slovak lending market despite rising funding costs.

While the latest increases have only a limited impact on monthly repayments for most borrowers, they could lead to noticeably higher total borrowing costs over the lifetime of a mortgage. The effect is expected to be most relevant for households planning to take out a new loan or those approaching the end of an existing fixed-rate period.

Mortgage specialists note that interest rates are influenced by more than central bank policy alone. Banks also consider their own funding costs, financial market conditions, competitive pressures and overall lending risk when setting mortgage prices.

The recent adjustments may also signal the beginning of a broader market shift. If funding costs remain elevated and financial markets continue to price in tighter monetary conditions, additional lenders could revise their mortgage offers in the coming months. However, the timing and scale of any further increases will depend on both market developments and future ECB policy decisions.

For prospective borrowers, advisers recommend comparing the full terms of mortgage offers rather than focusing solely on headline interest rates. Requirements linked to current accounts, insurance products, fees and other lending conditions can significantly influence the overall cost of financing over the duration of a loan.

Source: CIJ EUROPE Analysis Team

Art-Invest Real Estate Funds Appoints Eren Kahraman as Managing Director

Art-Invest Real Estate Funds has announced a change in its management team, with Eren Kahraman appointed as Managing Director from 1 July 2026, succeeding company founder Philipp Henkels.

Henkels, who has served as Managing Director since the establishment of Art-Invest Real Estate Funds in 2011, stepped down from the role on 30 June 2026.

Kahraman has been with the company since its founding and has held a number of senior positions during its development. He was involved in securing the company’s regulatory approval from Germany’s financial regulator, BaFin, for the establishment and management of open-ended institutional real estate funds and helped develop its risk management framework.

In recent years, Kahraman has overseen the group’s debt financing activities. In his new role, he will also assume responsibility for finance, sustainability (ESG) and human resources, alongside existing Managing Directors Jan Dührkoop and Jörg Hennebach.

Jan Dührkoop said the appointment reflects the company’s strategy of promoting internal leadership succession while ensuring continuity in the management of the business.

Commenting on his appointment, Kahraman said his long involvement with the company provides a strong understanding of its development, values and operating standards, and that he intends to continue strengthening its market position alongside the existing management team.

Founded in 2011, Art-Invest Real Estate Funds received regulatory approval from BaFin in 2012 to launch and manage institutional real estate funds. As of 31 December 2025, the company managed approximately €7.2 billion of equity across 26 institutional investment vehicles, supported by a team of around 80 employees.

Hungary Proposes New Authority with Expanded Oversight of Public Assets and Procurement

The Hungarian government has published draft legislation that would establish a new independent authority with broad powers to investigate the use of public assets, oversee state-funded activities and prosecute certain financial crimes linked to public administration.

If approved, the National Asset Recovery and Protection Office (NVVH) would report directly to Parliament and combine investigative, supervisory and prosecutorial responsibilities within a single institution.

The proposed authority would oversee a wide range of activities involving public funds, including central and local government budgets, EU-funded programmes, state-owned enterprises, public procurement, concession agreements and projects financed through public resources.

Under the proposal, the NVVH would be able to launch investigations on its own initiative, following risk assessments, or in response to complaints or referrals from other authorities. Its powers would include requesting documents and electronic records, carrying out on-site inspections, analysing financial and registry data, consulting experts and coordinating with other public bodies.

The draft legislation would also require organisations managing public assets or receiving state or EU funding to cooperate with investigations. This obligation would extend to the disclosure of business, banking and tax information, subject to limited exemptions such as legal professional privilege and national security matters. Failure to comply could result in substantial administrative penalties.

Where investigations identify potential irregularities, the authority would be able to refer cases to other regulators or courts. It would also gain the right to initiate civil proceedings in the public interest, including actions seeking to invalidate contracts considered harmful to public finances.

One of the proposal’s most significant provisions introduces enhanced monitoring of companies that rely heavily on public contracts. Businesses and affiliated entities deriving at least 75% of their combined revenue from public procurement or concession contracts during any financial year within the previous five years would automatically be reported to the new authority by Hungary’s tax administration.

Where an investigation identifies a continuing risk to public assets, the draft law would allow the NVVH to place such companies under state supervision. The authority would be granted powers to oversee major financial commitments, replace company management and terminate certain financial agreements where considered necessary.

The legislation would also transfer prosecutorial responsibility for criminal offences related to public asset management and the exercise of public authority from the general prosecution service to the new office. In cases falling within its remit, the NVVH would be responsible for investigations, bringing charges and representing the prosecution in court.

The government proposes a phased implementation. Administrative and institutional provisions would take effect immediately after the law is published, while the authority’s criminal prosecution powers would become effective 60 days later. The government expects the new office to begin operating in early autumn 2026.

If enacted, the legislation is expected to have the greatest impact on companies involved in public procurement, concession agreements, state-owned enterprises, recipients of public or EU funding and businesses operating within government supply chains, all of which may face increased compliance and reporting requirements.

Source: CMS

Czech Budget Deficit Increases at Mid-Year as Government Maintains Full-Year Fiscal Target

The Czech Republic recorded a state budget deficit of CZK 183.6 billion at the end of the first half of 2026, reflecting higher public spending despite continued growth in government revenues. While the shortfall widened compared with the same period last year, economists believe the government’s full-year fiscal objective remains within reach as revenue collection is expected to strengthen during the second half of the year.

The latest figures show that the deficit increased from the level recorded at the end of May and was around CZK 31 billion larger than a year earlier. Although it represents one of the country’s larger mid-year deficits in historical terms, the result broadly reflects the seasonal pattern of Czech public finances, where expenditure is concentrated in the first half of the year while several important tax revenues are collected later.

Government income continued to expand, rising by around 4% year-on-year, supported by higher receipts from income taxes, value-added tax and social insurance contributions. Strong wage growth remained one of the main drivers of revenue, increasing both payroll tax receipts and mandatory social contributions, while resilient household spending also supported indirect tax collection.

Expenditure grew at a faster pace than revenues, increasing by more than 6% compared with the first half of 2025. Higher spending was primarily linked to pensions, healthcare, education, social programmes and transfers to the European Union budget. Interest payments on government debt also continued to rise as refinancing costs remain higher than in previous years.

A significant factor behind the larger deficit was the timing of government expenditure. Funding for education, research, social services and several public programmes was released earlier in the year after temporary spending restrictions during the first quarter came to an end. This resulted in a faster increase in expenditure during the second quarter, while many tax payments will not be received until later in the year.

Tax performance remained broadly encouraging despite changes to the allocation of tax revenues between the central government and regional authorities. After adjusting for these legislative changes and the gradual disappearance of temporary windfall tax revenues, underlying tax collection continued to show healthy growth, reflecting stable labour market conditions and moderate economic expansion.

Personal income tax receipts benefited from rising salaries, while corporate tax revenue improved as companies made advance payments linked to their financial results. Consumption also continued to support value-added tax collections, although household spending remains influenced by inflation and interest rate developments.

The budget was also supported by positive net inflows from European Union programmes. Without these transfers, the underlying fiscal deficit would have been larger, underlining the continuing importance of EU funding for investment and public expenditure.

The Czech government continues to target a full-year budget deficit of CZK 310 billion for 2026. Most economists consider this objective achievable, provided economic activity remains stable and tax revenues continue to improve during the second half of the year. However, they also note that higher debt servicing costs, mandatory social expenditure and broader economic conditions will remain important factors shaping the final budget outcome.

The mid-year figures suggest that while fiscal consolidation remains a long-term objective, public finances continue to balance the need for investment and social spending with efforts to gradually reduce budget deficits in the years ahead.

Czech Unemployment Holds at 3.2% in May

The Czech Republic’s unemployment rate stood at 3.2% in May 2026, remaining broadly stable while increasing by 0.2 percentage points compared with the same month a year earlier, according to the Czech Statistical Office.

The seasonally adjusted figures, based on the Labour Force Sample Survey, show that the labour market continues to operate at historically low unemployment levels despite a slight weakening compared with 2025.

The employment rate for people aged 15 to 64 reached 75.4% in May, down 0.3 percentage points year-on-year. Employment remained higher among men at 80.1%, compared with 70.8% for women.

The economic activity rate, which measures the share of employed and unemployed people in the working-age population, stood at 77.9%, a marginal decline of 0.1 percentage points from May 2025. The rate reached 82.2% for men and 73.5% for women.

Male unemployment remained lower than female unemployment, with rates of 2.6% and 3.7% respectively.

Dalibor Holý, Director of the Labour Market and Equal Opportunities Statistics Department at the Czech Statistical Office, noted that unemployment has stabilised at 3.2%. He added that the current rate remains substantially below historical levels, standing 0.9 percentage points lower than ten years ago and 4.1 percentage points below the level recorded in May 2006.

Using the internationally comparable methodology applied by Eurostat for the 15–74 age group, the Czech Republic’s unemployment rate measured 2.9% in May 2026, continuing to rank among the lowest in the European Union.

The Labour Force Sample Survey follows International Labour Organization standards and differs from administrative unemployment statistics published by the Czech Labour Office, as it is based on household surveys rather than registered jobseekers.

ATAL Acquires Budner Group to Expand Presence in the Tricity Market

ATAL has completed the acquisition of the Budner Group following the fulfilment of closing conditions, including approval from Poland’s competition authority. The transaction strengthens ATAL’s position in the Tricity residential market and expands its development pipeline in northern Poland.

The agreed transaction value amounts to PLN 100.9 million, covering the shares in the Budner Group companies and their property assets. The agreement also includes the planned acquisition of a land plot for PLN 30.4 million, which will be completed once the conditions of the preliminary agreement have been met.

Following completion of both transactions, ATAL expects to secure development potential for approximately 70,000 sqm of residential projects in the Tricity area.

The company said the acquisition will increase the scale of its operations in the region by adding a portfolio of development projects aimed at both owner-occupiers and investment buyers.

ATAL reported consolidated revenue of PLN 315 million for the first quarter of 2026 after handing over 500 residential and commercial units. Net profit for the period reached PLN 55.3 million, resulting in a net profit margin of 17.6%.

During the first three months of 2026, the developer signed 644 development and preliminary sales agreements, including 365 contracts in March. At the end of the quarter, the company also held 241 active reservation agreements.

ATAL’s shareholders have also approved the distribution of the company’s 2025 net profit. A total dividend of PLN 194.7 million, equivalent to PLN 4.50 per share, will be paid, with the remaining profit allocated to reserve capital. The dividend record date has been set for 15 July 2026, with payment scheduled for 1 October 2026.

Renewable Electricity Continues to Expand Across Europe While CEE Countries Progress at Different Speeds

Renewable energy sources supplied 45.5% of all electricity generated across the European Union during the first quarter of 2026, marking another step in the region’s transition towards lower-carbon power generation. According to the latest Eurostat data, the share increased from 42.7% recorded during the same period last year, reflecting continued growth in renewable capacity and favourable generation conditions.

Wind power remained the largest contributor to renewable electricity production, accounting for almost 45% of all renewable generation across the EU. Hydropower represented 28%, while solar energy contributed more than 17%. Biomass and other renewable fuels provided most of the remaining renewable electricity, with geothermal and other technologies making up only a small share.

The transition continues to vary significantly between member states. Denmark again recorded the highest renewable electricity share in Europe, generating 90% of its electricity from renewable sources, largely through wind energy. Portugal followed with 82.9%, supported primarily by hydropower, while Lithuania ranked third at 75.7%, where wind generation also plays a dominant role.

Central and Eastern Europe presents a far more diverse picture. Lithuania stands among Europe’s leading renewable electricity producers, but many neighbouring countries remain in earlier stages of the transition.

Czechia recorded the lowest renewable electricity share in the European Union at 12.7%, while Slovakia generated 17.2% of its electricity from renewable sources during the first quarter. Both countries continue to rely heavily on conventional electricity generation, although renewable capacity has been expanding gradually.

Elsewhere in the region, investment momentum has accelerated. Poland has become one of Europe’s fastest-growing solar markets, with large-scale photovoltaic projects significantly increasing renewable generation over recent years. Romania, Hungary and Bulgaria have also expanded renewable capacity, particularly in solar power, while continuing to modernise electricity networks and improve grid integration.

The differing pace of development reflects each country’s energy mix, natural resources, investment levels and historical dependence on conventional generation technologies. Countries with extensive wind resources or well-developed hydropower systems have generally achieved much higher renewable electricity shares than markets where coal, nuclear power or natural gas continue to dominate electricity production.

Energy analysts expect renewable generation across Europe to continue growing as additional wind and solar projects enter operation, battery storage expands and electricity networks become more flexible. While progress is unlikely to be uniform, ongoing investment across Central and Eastern Europe is expected to gradually narrow the gap between the region’s highest and lowest-performing markets over the coming years.

The latest Eurostat figures relate specifically to electricity generation rather than total energy consumption, but they underline the continuing transformation of Europe’s power sector as renewable technologies account for an increasingly large share of electricity production across the continent.

Office Location Becoming a Key Factor in Prague Leasing Decisions

Companies leasing office space in Prague are placing greater emphasis on location alongside building quality, according to the 2026 Trend Report published by the Czech Association for Real Estate Market Development (ARTN). Access to public transport, nearby amenities and the overall character of the surrounding district are becoming increasingly important as occupiers evaluate office space.

Although hybrid working remains common, offices continue to play an important role in corporate operations. As a result, tenants are increasingly looking for workplaces that support collaboration while offering convenient access to restaurants, retail, public spaces and other services that enhance the working environment.

Limited availability of new office space has reinforced the importance of location. Office development slowed in recent years as some developers shifted investment towards residential projects. However, the pipeline is beginning to recover.

According to ARTN, Prague completed only 26,600 sqm of office space during 2025. By the end of the first quarter of 2026, more than 313,000 sqm was under construction, with around two-thirds of that space already pre-leased. Major developments include new office schemes within the Smíchov City district, incorporating the future headquarters of Česká spořitelna and ČEZ.

Developers are also launching some speculative projects without pre-agreed tenants, reflecting growing confidence in future occupier demand. Current examples include the Hila and Orion office buildings in Brumlovka and the recently launched Sequoia project in Nové Roztyly.

Industry representatives believe that limited new supply may increasingly force companies to remain in older premises that no longer meet modern workplace requirements, encouraging renewed leasing activity as new developments become available.

The report also highlights a broader shift in office development towards mixed-use districts that combine workplaces with housing, retail, hospitality and public spaces. Former industrial sites such as Smíchov City and Masaryčka illustrate this approach, where office buildings form part of larger urban regeneration projects designed to create active neighbourhoods throughout the day.

This growing focus on location is also influencing rental levels. Prime office rents in Prague currently reach around €30 per sqm per month, while some upcoming city centre developments are expected to achieve rents of €32–35 per sqm per month, reflecting limited availability of new space in the most sought-after locations.

Globalworth Achieves Top BREEAM Rating for 25% of Its Polish Office Portfolio

Globalworth has secured BREEAM In-Use v6 Outstanding certification for three additional office buildings in Poland, increasing the share of its Polish office portfolio with the scheme’s highest rating to 25%.

The newly certified properties are West Gate and Retro Office House in Wrocław, together with Silesia Star in Katowice. According to the company, only 12 office buildings in Poland currently hold the Outstanding rating, while 63 office buildings worldwide have achieved this level under the BREEAM In-Use v6 Part 1 standard.

Globalworth said the certifications reflect its long-term strategy of modernising existing assets through ongoing technical upgrades rather than major redevelopment projects.

The BREEAM In-Use v6 assessment places greater emphasis on operational performance, climate resilience, resource management and occupant wellbeing than previous versions of the certification.

West Gate achieved an overall score of 89.6%, including the maximum 100% score in the Resilience category following climate risk assessments and adaptation measures. The building also scored more than 86% in energy, materials and transport, supported by biodiversity initiatives including pollinator planting and habitats for birds and insects.

Retro Office House received an overall score of 86.3%. The office building achieved full marks in the Resources category and 94.4% for Resilience after upgrades including an integrated water monitoring system, expanded operational analysis and improved building management systems. The property has also received the “Object without Barriers” accessibility certification.

Silesia Star in Katowice achieved an overall score of 87.2%, including maximum points for Resilience and more than 95% in the Resources category. The development incorporates building management systems, water-saving technologies, green terraces, rainwater retention, cycling facilities, electric vehicle charging infrastructure and biodiversity measures. The complex also meets accessibility standards recognised through the “Object without Barriers” certification.

Globalworth said the certifications demonstrate the effectiveness of its portfolio management strategy, which focuses on maintaining and upgrading existing buildings to preserve long-term asset value while reducing operating costs for tenants.

According to the company, its entire Polish office portfolio is now BREEAM certified, with approximately 75% of assets rated Excellent and 25% achieving the highest Outstanding classification.

Globalworth also noted that one-quarter of its Polish office portfolio has received accessibility certification, reflecting increasing occupier demand for inclusive workplaces alongside environmental performance.

Demand for Czech Government Bonds Reaches CZK 80 Billion

Investor demand for the Czech Republic’s newly issued government bonds has significantly exceeded expectations, with orders reaching approximately CZK 80 billion after the first subscription period.

According to the Ministry of Finance, the volume of orders was four times higher than the original issuance target of CZK 20 billion.

The initial subscription period closed on 28 June, marking the end of the first opportunity for retail investors to subscribe to the bonds. Investors who placed orders are required to complete payment by 7 July.

The strong level of demand reflects robust interest from individual investors in government securities despite the relatively modest size of the initial planned issuance.

The Ministry of Finance has not yet announced whether it will increase the size of the issue following the stronger-than-expected subscription levels.

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