Leading economic indicator rises in January despite mixed fundamentals

The Leading Economic Indicator (LEI), which tracks short-term expectations for economic activity, increased by 3.8 points in January 2026 compared with the previous month. The rise was driven mainly by improved assessments of the overall economic outlook and company prospects, growth in the M3 money supply, and continued favourable conditions on the stock market.

The most notable change was recorded among managers in the manufacturing sector, who reported a marked improvement in their views of both the general economic situation and the outlook for their own companies. While negative assessments still outweighed positive ones, the gap narrowed significantly—from 10.5 percentage points in December 2025 to 2.6 percentage points in January 2026.

This improvement stands in contrast to other survey indicators. Data show no recovery in new orders, with the pace of decline in orders even accelerating. One explanation may be stronger-than-expected sales results in December 2025, which appear to have influenced expectations at the start of the year. The highest levels of optimism were reported in industries that recorded relatively strong December sales, including manufacturers of computers and electronic equipment, food producers and pharmaceutical companies.

At the same time, companies’ financial assessments did not improve. According to the January survey conducted by Statistics Poland (GUS), negative opinions on firms’ financial conditions deepened, with the balance falling from around minus 9.9 points in December to approximately minus 11.5 points in January. This suggests that the more positive sentiment regarding the overall economic situation is not yet supported by higher turnover or profitability.

Monetary data for December showed a sharp increase in the M3 money supply. In real terms and after seasonal adjustment, M3 rose by 3.3% month on month and nearly 10% year on year. The increase was mainly driven by higher deposits held by companies and households. This development is partly attributed to elevated bonus payments to employees at the end of 2025, which temporarily increased corporate and household liquidity. Analysts note that this effect is likely to be temporary rather than a sustained trend.

Market sentiment has also been supported by the ongoing positive performance of the Warsaw Stock Exchange, which has remained relatively strong for almost three years. Despite occasional short-term fluctuations, there are currently no clear signs of a reversal in this trend.

Source: BIEC

Romania adopts legal framework for EU SAFE programme, opening access to EUR 16.7 bn in funding

Romania has adopted Law No. 4/2026 approving Government Emergency Ordinance No. 62/2025, establishing the national legal framework required to implement the EU’s Security Action for Europe (SAFE) instrument. The legislation aligns Romanian procedures with Council Regulation (EU) 2025/1106 and enables access to EU SAFE financing for defence and strategic investments.

Under the SAFE programme, Romania has been allocated approximately EUR 16.68 billion, representing the second-largest national allocation among EU member states. The funding is intended to support defence modernisation while also financing critical infrastructure projects with strategic relevance.

The newly adopted framework sets out the responsibilities of relevant public authorities and defines the procedural, coordination and procurement rules applicable to projects financed through SAFE. It aims to ensure compliance with EU requirements while facilitating the rapid implementation of urgent and large-scale public investments in the defence sector.

SAFE funding is provided in the form of long-term, favourable loans, featuring extended maturities and grace periods designed to limit short-term pressure on public finances during the defence modernisation process.

As approved by Parliament, GEO 62/2025 introduces several key measures. These include defining the roles of public authorities involved in the planning, coordination and implementation of SAFE-eligible projects; regulating institutional cooperation between ministries, the Supreme Defence Council and other relevant bodies; and establishing specific public procurement rules for defence and security projects covered by SAFE, including provisions reflecting urgency linked to the current security environment.

The legislation also introduces procedures governing industrial cooperation, with the aim of supporting local production and increasing the participation of domestic industry in strategic investments. In addition, it provides for special rules and exemptions applicable to procurement procedures financed through SAFE, including derogations from offset regulations that normally apply under Romania’s defence procurement framework.

Romania’s investment plan under SAFE has already been approved by the European Commission. The authorities plan to allocate the available EUR 16.7 billion across a broad range of defence and strategic priorities, combining military capability development with industrial and infrastructure investment.

A significant portion of the funding is expected to be directed towards the acquisition of advanced defence equipment and the strengthening of national defence capabilities. At the same time, the programme is intended to support the domestic defence industry by expanding local production capacities and strengthening integration into European defence supply chains.

In parallel, Romania plans to channel substantial resources into large-scale dual-use infrastructure projects, particularly strategic highway corridors aimed at improving military mobility and regional connectivity.

Source: CMS

Cordia UK secures Lloyds CGFI financing for Bradford Works redevelopment

Cordia UK has secured a £5.25 million Clean Growth Financing Initiative (CGFI) loan from Lloyds to support the redevelopment of Bradford Works in Birmingham. The financing will fund the conversion of a former industrial building into a shared living scheme as part of the developer’s wider Great Hampton Street Masterplan.

Bradford Works is located at the junction of Harford Street and Barr Street on the edge of Birmingham’s Jewellery Quarter. The project will redevelop a vacant industrial property into a 54-unit shared living scheme targeting postgraduate students and young professionals.

The CGFI facility is designed to support projects demonstrating measurable environmental performance, including improvements in energy efficiency, carbon reduction and responsible material use. According to the lender, the loan reflects the project’s retrofit-led approach and low-carbon design strategy.

The redevelopment includes the removal of a mansard roof, conversion of existing floors and basement space, and the addition of two new storeys clad in black terracotta with perforated metal detailing. The design aims to integrate contemporary materials while retaining the building’s historic structure, which dates back to the early 20th century when it was occupied by Fattorini & Sons Ltd.

By reusing the existing structure, the project reduces embodied carbon compared with full demolition and rebuild. The energy strategy includes a central air source heat pump system, localised ventilation, and a 37 kW rooftop solar photovoltaic installation, expected to generate approximately 34,600 kWh annually. Cordia estimates this will reduce carbon emissions by around 6.1 tonnes per year. All residential units are expected to achieve EPC A ratings.

Communal amenities will include co-working and wellness spaces in the basement, shared kitchens and lounges on residential floors, and a rooftop terrace. Rents will be all-inclusive, covering utilities and council tax, and are expected to be approximately 20% lower than average one-bedroom build-to-rent units in the area.

András Kárpáti, CEO of Cordia UK, said the project demonstrates how historic buildings can be adapted for contemporary residential use while improving energy performance.

Nigel Johns, Relationship Director at Lloyds, commented that projects such as Bradford Works support Birmingham’s regeneration objectives by reducing embodied carbon and delivering new housing within existing urban fabric.

Bradford Works forms part of Cordia UK’s broader development pipeline in Birmingham, where the company is focusing on refurbishment-led schemes and sustainability-driven residential projects.

Czech industrial market records third-strongest demand year as vacancy rises

The Czech industrial real estate market recorded its third-strongest year on record in terms of net demand in 2025, while vacancy rates increased and construction activity remained broadly stable, according to data released by the Industrial Research Forum (IRF) .

Total modern industrial stock in the Czech Republic reached 13.28 million square metres by the end of the fourth quarter of 2025. During Q4 alone, 229,000 sq m of new space was delivered across 11 industrial parks, representing a 75% increase quarter on quarter. For the full year, new completions totalled approximately 813,500 sq m, up 53% compared to 2024.

Gross take-up in Q4 2025 amounted to 642,000 sq m, reflecting a 47% year-on-year increase. For the full year, gross take-up reached nearly 2.1 million sq m. Net take-up for 2025 exceeded 1.2 million sq m, making it the third-strongest year ever recorded on the Czech market. Manufacturing companies accounted for more than 49% of annual net demand, followed by retail and e-commerce operators with 25% and third-party logistics providers with 16%.

Jan Hrivnacky, Head of Industrial Leasing at CBRE, noted that manufacturing demand, particularly from the automotive sector, remained the primary driver of leasing activity, while demand from retail and e-commerce recovered during the year .

At the end of Q4 2025, a total of 1.25 million sq m of industrial and logistics space was under construction, broadly unchanged quarter on quarter but 22% higher year on year. Around one-third of this volume is expected to be delivered in the first quarter of 2026. Speculative development accounted for 27% of space under construction, while approximately 341,500 sq m remains in shell-and-core condition awaiting tenant commitments.

The national vacancy rate rose to 4.77% by the end of 2025, up 101 basis points year on year, with nearly 634,000 sq m of space available for immediate occupancy. Vacancy remained below the national average in Prague and the Central Bohemian Region at 2.6%, while Moravia-Silesia recorded the highest vacancy rate at close to 14%.

Prime headline rents remained stable for the fifth consecutive quarter, standing at €7.00–€7.50 per sq m per month in Prague. Prime rents in selected regional locations ranged between €5.60 and €6.60 per sq m per month, while rents for mezzanine office space stood between €9.50 and €12.50 per sq m per month .

Hart Logistics leases space at MDC2 Park Gliwice

Hart Logistics has leased 8,100 sq m of warehouse space at MDC2 Park Gliwice, located in Upper Silesia at the junction of the A1 and A4 motorways. The park is owned by a fund managed by Invesco Real Estate and developed by MDC².

MDC2 Park Gliwice comprises three buildings with a total leasable area of approximately 59,000 sq m. The facility has received a BREEAM New Construction certification at the Outstanding level, with a score of 92.6%, placing it among the highest-rated industrial buildings in Poland.

Hart Logistics, which provides freight forwarding, contract logistics, warehousing and e-commerce services, is expanding its operations in response to business growth. The new location marks the company’s entry into southern Poland for contract logistics, complementing its existing operations near Poznań and Warsaw.

According to Hart Logistics, the selection of MDC2 Park Gliwice was influenced by the site’s transport connectivity and the environmental performance of the buildings. The company indicated that ESG considerations and working conditions for employees and drivers were factors in the location decision.

The buildings at MDC2 Park Gliwice incorporate a range of energy- and resource-efficiency measures. These include enhanced thermal insulation, passive design solutions, and systems aimed at reducing energy and water consumption. The developer reports that final energy demand is significantly lower than reference buildings, while water-saving fixtures and leak detection systems have been installed. The construction process also included a high level of waste recycling and the use of FSC- and PEFC-certified timber.

The park includes supporting infrastructure such as bicycle facilities, electric vehicle charging stations and landscaped areas designed to support local biodiversity. Additional amenities include outdoor spaces intended for employee use.

MDC² stated that the location and technical specifications of the park are intended to support logistics and distribution operations while meeting current environmental standards. Hart Logistics has indicated that it is continuing to evaluate further expansion opportunities as part of its development plans for 2026.

Viladomy Voborského residential project in Prague’s Modřany reaches structural completion

The Viladomy Voborského residential project developed by FETTERS management has reached the stage of structural completion. Construction is proceeding according to schedule, with final delivery planned for the fourth quarter of 2026.

The project comprises two villa-style residential buildings with a total of 12 apartments, offering 3+kk and 4+kk layouts. The development is located in a residential area of Prague 4 – Modřany. According to the developer, approximately half of the units have already been sold.

At the current construction stage, windows have been installed in both buildings, while interior partition walls and plastering works have been completed. The project is now moving into the phase of installing technical building systems.

The two buildings have three and four above-ground floors and are equipped with elevators. Apartment sizes range from 78 to 116 square metres. Each unit includes a terrace, balcony or private garden, as well as a cellar and a parking space in the underground garage.

The architectural and interior concept was developed in cooperation with LOXIA. The design makes use of natural materials, including solid wood on terraces and balconies, large-format windows, brick fencing and stone-paved access walkways. Landscaping is planned for the shared outdoor areas.

Standard equipment includes a camera and chip access system, video intercoms and electrically operated exterior blinds. The project is designed with a focus on energy efficiency, privacy and functionality, according to the developer.

Viladomy Voborského is located within walking distance of the Vltava riverbank and approximately 15 minutes by car from Prague’s city centre. The surrounding area offers basic civic amenities and access to green spaces, including nearby parks and natural areas.

EU and India agree comprehensive free trade agreement

The European Union and India have concluded a comprehensive free trade agreement, marking a significant step in strengthening economic relations between the two markets after negotiations that began in 2007 and were repeatedly suspended.

According to Sonali Chowdhry, trade expert at DIW Berlin, the agreement comes at a strategically important moment for both sides. India is expected to maintain strong economic growth in the coming years and is projected to become one of the world’s three largest economies by the end of the decade, increasing the importance of EU access to the Indian market.

Trade relations between the European Union and India are already extensive, with more than 170,000 buyer-supplier relationships between companies on both sides. The agreement aims to deepen these ties by reducing tariffs and non-tariff barriers across a range of sectors.

For EU exporters, the deal is expected to improve market access in industries such as automotive, engineering and beverages. At the same time, Indian exports including pharmaceuticals, IT services and textiles are set to benefit from improved access to the EU market.

Beyond direct trade effects, Chowdhry notes that the agreement also has a broader systemic role. By establishing binding commitments on transparency and market access, the agreement is intended to enhance predictability in international trade at a time when global trade rules are increasingly under pressure. In this context, the EU–India agreement is seen as a counterweight to rising protectionist trends and a measure to support the stability of the global trading system.

Source: DIW Berlin

Colliers Romania: 2026 will be a year of adjustment, repositioning and strategic decisions

fletcher@cijeurope.com
27 January 2026
Logistics, Market Report, Office, Residential, Retail

After several years of rapid growth followed by corrections, Romania’s real estate market is entering a phase of slower development amid fiscal pressures and continued geopolitical uncertainty. According to Colliers’ report Top 10 forecasts for the Romanian real estate market in 2026, the year ahead will be defined by adjustment and repositioning rather than expansion, with disciplined investment and strategic selectivity becoming more important than scale.

Colliers sees 2026 as a year of stabilisation and preparation for the next growth cycle, not a rapid recovery. While economic conditions remain challenging, infrastructure investment, a gradual return of private capital and uneven performance across segments may still create opportunities for investors with a medium-term horizon.

Romania’s economy is expected to grow by just over 1% in 2026, broadly in line with 2025, though risks remain elevated. Fiscal consolidation, political complexity and an unstable external environment will weigh on growth, while EU funds and a potential easing of monetary policy from the second quarter could provide limited support. Any improvement in Romania’s sovereign outlook is more likely towards the end of the year, contingent on consistent implementation of fiscal measures.

Transport infrastructure could be one of the main positive drivers in 2026, with over 300 kilometres of motorways and express roads potentially delivered if current timelines are maintained. These EU-funded projects are expected to boost the attractiveness of secondary cities, ease pressure on Bucharest and unlock new development locations, although administrative and political risks remain.

Inflation is expected to resume a downward trend, allowing for a gradual easing of monetary policy. The National Bank of Romania may cut the policy rate by around one percentage point, potentially starting in the second quarter. Colliers notes that lower rates are likely to stabilise market sentiment rather than trigger a sharp rebound in demand.

The budget deficit remains a key vulnerability. Reducing it from an estimated 7.7% of GDP in 2025 towards around 6% in 2026 will be challenging, making fiscal predictability and disciplined implementation critical for investor confidence and financing costs.

The office market enters 2026 in a landlord-favourable position due to limited new supply and high development costs. After no new office deliveries in Bucharest in 2025, projects are gradually returning, but volumes remain insufficient to ease the shortage of high-quality space. Demand is increasingly focused on energy-efficient, well-located buildings, supporting upward pressure on prime rents and widening the gap with older stock.

The industrial and logistics sector is expected to remain resilient, supported by infrastructure expansion and more diversified demand. While leasing volumes may ease from the 2025 peak, interest from manufacturing, strategic industries and Asian investors is increasing. High construction and financing costs may constrain new supply, supporting rents for well-located assets.

Retail is expected to remain stable despite pressure on consumer spending. Romania’s structural undersupply of modern retail space continues to support medium-term growth, particularly in secondary and mid-sized cities. Around 240,000 sqm of new retail space is forecast for delivery in 2026, the highest level since 2011.

Investment activity could begin to recover gradually in 2026 as yields stabilise in Western Europe and risk appetite improves. Prime assets may see modest yield compression, while the gap between high-quality and secondary properties is expected to widen further.

Colliers also anticipates a stronger land market, with renewed interest in plots for residential, industrial and retail developments. Cash-rich investors and flexible structures, including joint ventures, are expected to play a larger role.

The residential market will remain under pressure due to insufficient supply. High construction costs, financing constraints and administrative delays continue to limit new deliveries, while demand remains resilient in major cities. As a result, price pressure is expected to persist, and interest in PRS projects is likely to increase, driven by strong rental demand and reduced housing affordability.

Stress and physical strain emerge as growing challenges in office workplaces

Employee stress is increasingly being recognised as an organisational issue rather than an individual concern, as companies face the combined effects of fast-paced work environments, constant digital exposure and limited opportunities for recovery. Recent research indicates that almost half of employees in Poland experience stress on a daily basis, with the share rising to more than half among younger workers entering the labour market.

Studies cited by ManpowerGroup suggest that work-related stress now affects a broad cross-section of employees, regardless of role or seniority. Many workers also struggle to regenerate outside working hours, often replacing one form of stimulation with another through prolonged use of digital devices and social media.

Physical strain adds to this pressure. Long periods of sitting, limited movement and constant sensory input are common features of office work and are increasingly linked to health complaints. Research on sedentary work shows that more than two-thirds of office employees experience lower back pain, while a large majority report that such discomfort negatively affects their concentration and productivity.

In response, employers are reassessing the role of workplace benefits. While traditional offerings such as basic healthcare packages or sports cards remain widespread, surveys indicate that many employees consider existing benefit schemes outdated or underused. Data referenced by Pluxee show that a significant proportion of benefit budgets do not translate into meaningful support for staff, despite employees broadly associating benefits with improved wellbeing.

As expectations shift, particularly among younger generations, there is growing interest in solutions that provide immediate and practical relief during the working day. Companies seeking to encourage more frequent office attendance are increasingly experimenting with on-site initiatives such as short massage sessions, yoga classes or organised meals, which do not require additional time outside working hours.

Experts point out that the most effective approaches tend to be part of a wider wellbeing strategy rather than isolated actions. Programmes combining ergonomic advice, stress management workshops and regular micro-breaks are seen as more likely to deliver lasting benefits. Some larger organisations have introduced coordinated wellbeing initiatives that link physical care with broader health awareness campaigns.

Practitioners working directly with companies report that many employees show clear signs of overstimulation. According to Marta Miłosz-Sikorska, owner of the Holi Bali massage studio in Łódź, short in-office treatments often provide employees with their first genuine pause of the day, allowing them to disengage briefly from constant demands and return to work with improved focus.

Surveys indicate that employee benefits play a role in employer perception, with a large share of workers stating they would recommend their workplace based on the benefits offered. While measures such as workplace massage or yoga are not a solution to all stress-related issues, they are increasingly viewed as practical tools that support recovery and resilience. For employers, such initiatives represent a tangible investment in employee health and engagement, while for staff they may serve as an additional incentive to spend time in the office and strengthen workplace relationships.

Panattoni secures €42m loan for Szczecin Trzebusz II logistics project

Panattoni has obtained financing of €42 million from BNP Paribas Bank Polska to support the construction of two warehouse buildings within the Panattoni Park Szczecin Trzebusz II development.

The investment is currently under construction. The first phase includes a warehouse with a total area of 25,500 sq m, of which 15,500 sq m has been pre-leased to Rohlig SUUS Logistics. A second building, providing an additional 36,000 sq m of warehouse space, is planned as the next stage of the project.

According to Panattoni, the financing will support the further expansion of its logistics portfolio in the Szczecin region, where the company has already delivered close to 900,000 sq m of industrial space. The developer views the project as part of its longer-term strategy in Western Pomerania.

Panattoni Park Szczecin Trzebusz II is located in the eastern part of Szczecin, approximately 15 kilometres from the city centre and around 160 kilometres from Berlin. The site benefits from access to the S3 expressway and the A6 motorway, providing connections to both domestic and international transport routes. The proximity of the Port of Szczecin is also cited as a logistical advantage.

The development is planned in line with Panattoni’s standard specifications and is expected to seek BREEAM certification at the Excellent level.

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