Developers Take Construction In-House as Industry Pressures Mount

A growing number of developers are reconsidering their reliance on traditional general contractors and exploring the creation of in-house construction teams as they seek greater control over project delivery, costs and timelines.

The trend, already visible in several international markets, reflects broader challenges facing the construction industry, including contractor shortages, rising costs and increasing project complexity. In some markets, developers report a significant decline in the number of bidders participating in construction tenders, reducing competition and limiting their ability to negotiate favourable terms.

While the Czech market continues to attract multiple participants in most tenders, similar pressures are beginning to emerge. Fluctuating contractor capacity, cost inflation and less predictable delivery schedules are encouraging developers to examine alternative project delivery models.

According to Adam Heres Vostarek, Regional Manager at PlanRadar, the shift towards internal construction capabilities is driven by a desire to improve visibility over project execution and address long-standing inefficiencies within the traditional development model.

Under the conventional approach, developers provide financing and oversee projects, while general contractors maintain primary control over day-to-day site operations. As a result, critical issues such as schedule delays or budget overruns may only become visible once corrective action becomes difficult and costly.

Industry studies estimate that construction delays, rework and project inefficiencies result in substantial financial losses globally each year. Cost overruns on large projects are also a persistent challenge across many markets.

Supporters of in-house construction teams argue that bringing project delivery under direct developer control can improve decision-making, accelerate responses to problems and better align construction activities with long-term investment objectives.

When developers manage construction internally, project teams share responsibility for the overall success of the development rather than focusing solely on meeting contractual obligations. This can help identify risks earlier and enable faster implementation of corrective measures.

However, industry experts caution that internalising construction activities also transfers significant operational responsibilities to developers. Managing subcontractors, coordinating logistics, ensuring workplace safety and controlling project changes require specialised expertise and robust management structures.

Without effective systems and processes, developers may encounter many of the same challenges they were attempting to avoid. Delays, budget deviations and communication breakdowns can occur regardless of whether construction is managed internally or by an external contractor.

According to Vostarek, the core issue often lies not in the organisational structure itself but in the flow of information between construction sites and decision-makers.

As a result, some industry observers argue that digitalisation may offer a more practical solution than fully internalising construction activities. Modern project management platforms allow developers, contractors and consultants to access the same project information in real time, improving transparency and supporting faster decision-making.

Digital tools can provide continuous visibility into project progress, change requests, budgets and schedules, enabling stakeholders to address issues before they escalate. Technologies such as 360-degree site documentation and digital project records also help improve quality control and reduce disputes during construction and operation.

For general contractors, these developments are creating new expectations from clients. Developers increasingly expect real-time project data, comprehensive documentation and greater transparency throughout the construction process rather than relying solely on periodic reports.

The trend suggests that the future competitive advantage for contractors may depend less on traditional project delivery capabilities and more on their ability to provide transparent, data-driven project management.

Although in-house construction teams remain relatively uncommon among Czech developers, growing demands for greater control, accountability and project visibility are likely to accelerate discussions around alternative delivery models. Whether projects are managed internally or through external contractors, industry experts increasingly agree that success will depend on the quality of information, documentation and decision-making processes rather than on the organisational structure alone.

Horoz Logistics Leases 9,100 sqm at Prologis Park Alzenau

REALOGIS Immobilien Frankfurt has arranged the lease of approximately 9,100 sqm of logistics space at Prologis Park Alzenau in Germany’s Bavaria region.

The facility, located within the Süd B30 industrial area, has been leased by Horoz Logistics International, which will use the site as its central warehouse operation for the German market. The company plans to provide logistics and fulfilment services for customers from the new location.

The property is owned by Prologis, one of the world’s largest logistics real estate developers and operators.

According to REALOGIS, the immediate availability of the space played an important role in the transaction. The company noted that occupiers continue to prioritise flexible logistics solutions and rapid occupancy options amid ongoing economic and geopolitical uncertainty.

The lease further strengthens occupancy levels at Prologis Park Alzenau, which remains an established logistics location within the Rhine-Main region. Following the transaction, approximately 16,000 sqm of warehouse space remains available within the park.

REALOGIS is marketing the remaining space as co-lead leasing agent for the development.

The transaction reflects continued demand for modern logistics facilities in strategically located industrial parks, particularly among companies seeking to consolidate distribution activities and improve supply chain efficiency within Germany’s largest consumer markets.

Private Investor Acquires Fully Leased Logistics Asset Near Prague

Colliers has advised on the sale of the Orifarm Hostivice logistics and office complex, located on the western outskirts of Prague. The transaction involved the sale of the fully leased property by CHS – Immobilien to a private investor.

The asset comprises a total leasable area of 6,052 sqm, including approximately 4,818 sqm of warehouse space and 1,234 sqm of office and administrative facilities. The complex is fully occupied by Orifarm Supply, part of the international pharmaceutical company Orifarm Group.

Situated in Hostivice, the property benefits from direct access to Prague’s road infrastructure, including the Prague Ring Road and the D6 and D7 motorways. The location provides efficient connections to Prague city centre as well as key transport corridors across the Czech Republic.

According to Colliers, the transaction reflects continued investor demand for smaller logistics assets with stable cash flow and established tenants. The sale follows another industrial property transaction completed by the advisory firm in Prague earlier this year.

Tomáš Szilágyi, Associate Director at Colliers, noted that the deal highlights the ongoing strength of domestic capital in the Czech investment market. He added that the combination of a strategic location and a long-term tenant contributed to the property’s attractiveness as an investment opportunity.

The transaction was supported by PDP Property Development Partners. Legal advice for the seller was provided by law firm bpv Braun Partners.

The acquisition reflects a broader trend in the Czech industrial investment market, where private and local investors continue to target income-producing logistics properties, supported by strong occupier demand and limited availability of quality assets in established locations around Prague.

Reconstruction of Karlovy Vary’s Imperial Spa Highlights the Importance of Design Details

The restoration of the historic Imperial Spa building in Karlovy Vary demonstrates how the success of heritage renovation projects often depends not only on major architectural interventions but also on carefully selected technical and design elements.

Completed in 2023, the renovation returned one of the Czech Republic’s most significant spa buildings to active use while preserving its historical character. Originally constructed in the late 19th century, the Neo-Renaissance landmark is now used as a cultural and social venue following a comprehensive modernisation programme carried out between 2019 and 2023.

As part of the project, planners faced the challenge of integrating modern building systems into a protected historical environment. The selected heating solution needed to meet contemporary performance standards while remaining visually consistent with the building’s original architecture.

To achieve this, sectional steel radiators from Zehnder’s Charleston range were installed throughout the property. According to the company, the radiators were chosen for their ability to blend naturally with the proportions, colours and decorative features of the historic interiors.

The project illustrates a broader trend in heritage restoration, where technical infrastructure is increasingly expected to contribute to the overall architectural experience rather than remain purely functional. In protected buildings, elements such as lighting, ventilation, heating systems and interior fittings often play a significant role in maintaining authenticity while ensuring modern usability.

Beyond aesthetics, the heating system also needed to address the operational requirements of the building. The Imperial Spa uses heat recovered through its ventilation system, with the radiators providing supplementary heating when necessary. The solution was designed to efficiently serve large spaces with high ceilings, a characteristic feature of historic spa architecture.

Project stakeholders emphasised that long-term reliability and energy performance were key considerations alongside visual integration. After several years of operation, the heating system has continued to support both visitor comfort and the building’s day-to-day functionality.

The renovation of the Imperial Spa has become one of the most prominent examples of heritage-led regeneration in the Czech Republic in recent years. The project demonstrates how the preservation of historic architecture increasingly relies on balancing conservation requirements with modern technical standards, ensuring that landmark buildings remain both functional and relevant for future generations.

The restoration also highlights how seemingly minor details can influence the perception of a space. While visitors may focus primarily on grand staircases, decorative ceilings and restored facades, carefully integrated technical elements often play an equally important role in shaping the overall atmosphere and user experience within historic buildings.

NEPI Rockcastle Highlights CEE Retail Growth at Annual Retailers Day in Zagreb

More than 150 representatives of international retail brands gathered in Zagreb for NEPI Rockcastle’s annual Retailers Day, where the retail property owner outlined its expansion plans and presented the latest trends shaping consumer markets across Central and Eastern Europe.

Held under the theme “Spreading Our Wings, Elevating Retail Together”, the event focused on the role of collaboration between landlords, retailers and local communities in supporting the next phase of retail growth across the region.

NEPI Rockcastle owns and manages a portfolio of 60 retail properties across eight countries with a total value of approximately €8.2 billion. The company highlighted the continued strength of consumer spending in Central and Eastern Europe, noting that purchasing power across the region increased by 13.2 percent in 2025, significantly outpacing the European Union average.

Opening the event, CEO Marek Noetzel said the company continues to pursue growth through both development activity and potential acquisitions.

The company’s ongoing investment programme includes €845 million of development and refurbishment projects. Among the most significant is the transformation and extension of Promenada Mall in Bucharest, a mixed-use project with a total investment of approximately €300 million scheduled for completion in April 2027.

According to NEPI Rockcastle, the existing Promenada Mall currently comprises 39,000 sqm of retail space and 166 tenants. The extension will increase the retail area to 69,000 sqm while introducing office and hospitality components within a broader mixed-use destination.

The company also reported strong operational performance across its portfolio during 2025, recording 354 million visits and an increase of more than 8 percent in average customer spending while maintaining stable visitor numbers.

Economic experts participating in the event noted that consumer demand in Central and Eastern Europe has remained resilient despite geopolitical uncertainty and slower growth in some Western European markets. They pointed to rising household incomes, relatively low unemployment and continuing wage growth as factors supporting retail spending across the region.

NEPI Rockcastle said retailer expansion remains a key focus across its platform. The company reported a portfolio vacancy rate of just 1.2 percent and nearly 1,500 lease agreements signed during 2025. Management highlighted the importance of early collaboration with retailers when planning future store openings and expansions.

One example of the company’s asset management strategy is Arena Centar in Zagreb. Since acquiring the shopping centre in 2016, NEPI Rockcastle has overseen a significant expansion and repositioning of the asset. The centre now comprises approximately 66,000 sqm of gross leasable area and has recorded substantial growth in both sales and visitor numbers. Further expansion is planned later this year through the addition of new retail units.

Marketing and customer engagement also remain a priority for the group. NEPI Rockcastle organises more than 1,200 events and promotional campaigns annually across its portfolio and continues to invest in digital marketing initiatives aimed at strengthening customer communities around its shopping centres.

The event concluded with discussions on the future of retail and the growing role of artificial intelligence in shaping customer experiences. Speakers suggested that advances in personalisation technologies are likely to strengthen the role of physical retail by creating more engaging and experience-driven shopping destinations.

Alongside the business programme, NEPI Rockcastle continued its community support initiatives by making a €5,000 donation to the Croatian Music Institute, a historic cultural institution currently undergoing restoration following earthquake damage.

Retailers Day 2026 highlighted the continued attractiveness of Central and Eastern Europe’s retail markets, with industry participants pointing to strong consumer fundamentals, ongoing investment and active cooperation between landlords and retailers as key drivers of future growth.

Deka Immobilien Achieves Full Occupancy at Berlin Office Property Following New Lease

Deka Immobilien has signed a long-term lease agreement for approximately 7,400 sqm of office space at the WYSE OFFICES property in Berlin-Mitte.

The space has been leased to a public-sector occupier, which is expected to relocate to the building in early 2027 following refurbishment and tenant fit-out works.

The transaction brings the office property to full occupancy. WYSE OFFICES is held within the portfolio of WestInvest ImmoValue, Deka Immobilien’s open-ended real estate fund for institutional investors.

Located at Schellingstraße 1 in Berlin-Mitte, the property has been awarded a BREEAM In-Use “Very Good” sustainability certification, reflecting its environmental and operational performance.

The lease highlights continued demand for well-located and sustainable office space in central Berlin, particularly from public-sector tenants seeking modern and energy-efficient workplaces.

Savills advised Deka Immobilien on the transaction through its Berlin office.

Poland’s Expanding Defence Sector Creates Opportunities and New Challenges for Industrial Contractors

Rising investment in Poland’s defence industry is creating opportunities for companies seeking to enter a rapidly expanding market. However, industry specialists warn that the production of explosives and ammunition remains one of the most tightly regulated areas of manufacturing, requiring expertise that goes well beyond conventional industrial construction and engineering.

According to Marcin Kosieniak, co-owner of engineering consultancy PM Projekt, many companies are attracted by the growing number of defence-related projects but underestimate the complexity of the sector’s regulatory and technical requirements.

“The defence industry is often viewed as another industrial market, but the reality is very different,” said Kosieniak. “Projects must comply with a range of overlapping regulations covering explosives, workplace safety, environmental protection, fire prevention, construction standards and explosion-risk management.”

The growing demand for domestic defence production follows a broader increase in military spending across Europe, driven by geopolitical tensions and efforts to strengthen strategic autonomy. Poland has emerged as one of the region’s most active investors in defence manufacturing capacity, prompting interest from contractors, suppliers and engineering firms looking to participate in new projects.

However, specialists note that industrial installations within explosives production facilities require a different approach from those found in traditional manufacturing environments.

In such facilities, heating, ventilation and air-conditioning systems are considered an integral part of the production process rather than supporting building infrastructure. Design parameters must be aligned with the specific substances being handled, the potential risks associated with ignition sources and the safety zones required throughout the facility.

Engineers must also address strict requirements related to occupational safety, air filtration, dust management and exhaust treatment. The interaction between these systems means that a design flaw in one area can affect the safety and compliance of the entire facility.

Industry experts argue that experience gained in heavy industry alone is often insufficient preparation for defence-sector projects. The regulatory framework requires coordination across multiple approval processes, extensive documentation and specialised technical knowledge developed through years of sector-specific experience.

As investment in defence manufacturing continues to accelerate, demand for engineering and design services is expected to increase alongside new production facilities. At the same time, investors are placing greater emphasis on proven expertise, regulatory knowledge and project references when selecting contractors and consultants.

According to PM Projekt, the complexity of compliance requirements and the high cost of design errors mean that technical competence is becoming a key differentiator in the market. Companies entering the sector must demonstrate not only engineering capabilities but also an understanding of the approval procedures and long-term operational requirements unique to defence-related facilities.

The trend reflects a broader shift within Poland’s industrial market, where the expansion of strategic manufacturing sectors is creating opportunities for specialised engineering firms while raising the barriers to entry for newcomers. As defence production capacity grows, industry participants expect technical standards, safety requirements and regulatory scrutiny to remain among the most demanding in the country’s manufacturing sector.

CRESCO REAL ESTATE Launches Sales at Yards Žižkov as Transformation of Former Freight Station Advances

CRESCO REAL ESTATE has launched apartment sales in the first phase of its Yards Žižkov residential development, which is being built on the site of Prague’s former Žižkov Freight Station. The project, developed in partnership with WOOD & Company, forms part of the wider regeneration of one of the capital’s largest redevelopment areas.

The two-phase scheme will deliver more than 1,100 apartments. According to the developer, demand has been strong since the launch of sales, with approximately one-third of the 100 units in Building B already sold after entering the market in May.

The first phase of the project will gradually bring more than 520 apartments to market, ranging from studio layouts to five-room family units. Apartment sizes will range from 20 sqm to 158 sqm. Most homes will include balconies, terraces or private gardens, together with storage space and parking facilities.

Construction began in May 2026, with the first residents expected to move into the development in 2028.

The project has been designed by QARTA Architektura and will target the highest energy-efficiency category. Residential units will feature air conditioning, underfloor heating, triple-glazed windows and external shading systems. Additional specifications include large-format aluminium windows, wooden flooring, modern bathrooms and security entrance doors.

The development will also incorporate green roofs, landscaped public areas and a private park for residents. Design elements inspired by the site’s industrial past are planned for both building facades and public spaces, reflecting the history of the former freight terminal.

Beyond housing, the project will include retail and service facilities, public spaces and green areas intended to support a mixed-use urban environment.

One of the key advantages of the development is its location within the rapidly changing Prague 3 district. New tram stops at Malešická and Nad Kapličkou will provide direct connections to the city centre, while daily amenities, schools and leisure facilities are planned within walking distance, in line with the principles of a so-called “15-minute city”.

Yards Žižkov forms part of the broader redevelopment of the former Žižkov Freight Station area, which is expected to become one of Prague’s most significant new urban districts over the coming years, combining residential, commercial and public functions within a large-scale regeneration project.

BMW Group Distribution Centre Near Ostrava Moves Closer to Launch

The development of BMW Group’s new distribution centre at Ostrava Airport Multimodal Park in Mošnov has entered its final stage, with logistics operator DP World beginning preparations ahead of the facility’s planned launch later this year.

Developer GRIDARCH has granted early access to the three logistics halls that make up Phase III of the project, allowing DP World to enter and fit out the premises before the formal building permit process is completed. The halls, which provide a combined 124,000 sqm of leasable space, are expected to receive final approval during the summer of 2026.

DP World, selected by BMW Group to operate the facility, has started installing racking systems, preparing office areas and testing operational and IT infrastructure. Recruitment is also underway, with the centre expected to create up to 750 jobs once fully operational.

The facility will serve as BMW Group’s overseas distribution hub for automotive components and spare parts, supporting the company’s global manufacturing and after-sales operations.

According to GRIDARCH, granting early access enables the future operator to prepare the site for immediate use once final approvals are received. The company said the project has been developed to meet the requirements of a large-scale international distribution operation.

Robert Sgariboldi, Country Manager of DP World Czech Republic, said the early access period would allow the company to test technologies and operational processes before the start of pilot operations. He added that the multimodal transport connections available in Mošnov, including road, rail and air links, were a key factor in the site’s attractiveness.

The Phase III development represents the latest expansion of Ostrava Airport Multimodal Park, one of the Czech Republic’s largest logistics and industrial projects.

The park’s first phase, launched in 2018, delivered approximately 139,000 sqm of industrial space and includes a 151,000 sqm rail container terminal. Part of the development, together with an industrial park in Nošovice, was acquired by EQT Real Estate in 2021.

A second phase, comprising four logistics and light industrial buildings with a total area of 122,000 sqm, was completed in March 2025. Three of those buildings were subsequently acquired by EQT Real Estate, while one remains under GRIDARCH ownership and is leased to automotive supplier Brose CZ.

Construction of the third phase is expected to be completed during summer 2026, with full operations at BMW Group’s distribution centre anticipated by the end of the year.

When History Returns: Poland and Ukraine Navigate Memory, Politics and Security

The relationship between Poland and Ukraine has often been described as one of the most important strategic partnerships in Central and Eastern Europe. Since Russia launched its full-scale invasion of Ukraine in 2022, the two countries have worked closely on security, humanitarian assistance and diplomatic initiatives. Yet recent events have once again demonstrated how unresolved historical questions continue to influence contemporary politics.

The latest disagreement emerged after Ukrainian authorities honoured a military unit with a name linked to a controversial chapter of twentieth-century history. While the decision was largely presented in Ukraine as a tribute to earlier struggles for national self-determination, it was interpreted very differently in Poland, where memories of wartime atrocities committed against Polish civilians remain deeply embedded in public consciousness.

The differing reactions highlight a challenge that has existed between the two neighbours for decades. Historical figures and organisations that are regarded by many Ukrainians as symbols of resistance and independence are often viewed in Poland through the lens of violence and suffering experienced during the Second World War. As a result, decisions intended for domestic audiences in Ukraine can quickly generate political consequences across the border.

The controversy arrives at a sensitive moment in Polish politics. Questions of national identity, historical responsibility and relations with Ukraine have become increasingly prominent topics in public debate. While political leaders broadly agree on the importance of supporting Ukraine’s sovereignty and security, opinions differ on how firmly historical issues should be addressed within the bilateral relationship.

Some Polish politicians have argued that symbolic gestures matter and that historical grievances cannot be overlooked, regardless of current geopolitical circumstances. Others have emphasised the need to prevent disputes over the past from undermining cooperation that remains essential for regional stability.

For Ukraine, the issue is equally complex. More than four years into a large-scale war, the country continues to draw upon historical narratives that reinforce national unity and resilience. Political leaders face pressure to maintain public morale while strengthening a sense of continuity between previous generations that fought for independence and the current defence effort against Russia.

These domestic considerations help explain why certain decisions resonate strongly within Ukraine, even when they risk creating diplomatic friction abroad. Wartime governments frequently prioritise messages that reinforce national cohesion, particularly when facing prolonged military and economic challenges.

At the same time, the strategic balance between Warsaw and Kyiv has evolved since the early months of the war. Poland played an indispensable role in facilitating military supplies, humanitarian assistance and refugee support. It became one of Ukraine’s most reliable advocates within NATO and the European Union.

As the conflict has continued, however, Ukraine has diversified its international partnerships and strengthened direct ties with larger Western capitals. This does not diminish Poland’s importance, but it has changed the dynamics of the relationship. The partnership is no longer defined solely by emergency wartime support but increasingly by long-term political, economic and security interests.

The disagreement also illustrates a broader reality of international relations. Countries may share common strategic objectives while maintaining profoundly different interpretations of history. Such differences do not necessarily prevent cooperation, but they require careful management and political maturity on both sides.

Despite the current tensions, there is little indication that either government intends to fundamentally alter the partnership. The security interests of Poland and Ukraine remain closely aligned. Both countries view a stable and secure Eastern Europe as essential to their future, and both recognise that continued cooperation serves their broader national interests.

What the dispute does reveal is that historical memory remains a powerful force in Central European politics. Even as governments focus on contemporary security challenges, events from more than eighty years ago continue to shape public opinion, political discourse and diplomatic relations.

The future of Polish-Ukrainian relations will likely depend on the ability of both countries to acknowledge these sensitivities while maintaining focus on the strategic realities that bind them together. The past cannot be changed, but how it is remembered and incorporated into modern state policy will continue to influence one of Europe’s most consequential partnerships.

Source: WEI

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