CEE commercial real estate market sees strong recovery

According to Knight Frank, the CEE commercial real estate market experienced a strong recovery in the first half of 2025, with investment exceeding expectations.

Prague

Across the Czech Republic, Poland, Romania, Slovakia, and Hungary, almost €5 billion was invested, representing 60% of the previous year's total. 
The Czech Republic led the way at €2.1 bn, edging out for the first time Poland (€1.7 bn), with the two nations dominating regional investment (77%). 
Logistics properties were the most sought-after, securing 32% of all investments, particularly in the Czech Republic, Poland, and Slovakia, driven by stable income streams, low risk, e-commerce growth, and nearshoring.
Offices (23%), retail (16%), hotels (11%), and residential properties (8%) followed in popularity. 
Key deals included Blackstone's acquisition of Contera assets in the Czech Republic and Slovakia, PPF Real Estate’s purchase of luxury hotels in Prague, and a €253 mln sale-and-leaseback deal in Poland. 
Furthermore, the report noted a significant rise in domestic investors, especially in the Czech Republic (78% of volume), Hungary (80%), and to a lesser extent, in Romania (35%) and Poland (15%).
The forecast for the latter half of 2025 is optimistic, bolstered by a strong pipeline of deals, stable prime yields, and decreasing interest rates. Office properties across all CEE countries are expected to drive market activity, along with industrial assets in Poland and Slovakia, and retail properties in the Czech Republic and Romania.
Dorota Lachowska, head of Research at Knight Frank Poland, said: “In Poland, a return of major institutional investors is being observed, thus far predominantly within the warehouse sector. Equally noteworthy is the robust expansion of domestic capital activity - a trend that, as recently as five years ago, remained marginal within commercial real estate, yet today accounts for 15% of total transaction volume, and we anticipate that its share will continue to increase.” 
Lenka Šindelářová, head of Research and Consultancy at Knight Frank Czech Republic, added: “The Czech investment market stands out for the strong presence of domestic capital, which continues to dominate the largest transactions. Solid economic fundamentals, stable demand in the logistics sector, and rental growth prospects for prime offices make our market particularly resilient.” 
Ileana Stanciu-Necea, head of Research at Knight Frank Romania, said: “Romania continues to offer the most competitive yields in the region, reinforcing its position as an attractive destination for international capital. In the first half of 2025, the office sector made a remarkable comeback, accounting for nearly one-third of total investments, while retail assets led the way with 42% of the market, with activity concentrated primarily in retail parks, which remain a preferred format for both investors and tenants due to their adaptability, strong performance in secondary cities, and consistent consumer demand. This balanced sectoral performance highlights Romania’s resilience and its capacity to deliver sustainable growth opportunities across asset classes.”