Real estate investment activity across Central and Eastern Europe (CEE) is gaining momentum, with total volumes reaching €11.3 billion in 2025, up 34 percent year-on-year and 24 percent above the five-year average, according to the latest Investment Report CEE 2025. The increase reflects stronger activity from domestic and regional investors, highlighting the growing role of CEE markets within the European investment landscape.
The rebound is supported by improving macroeconomic conditions and growing activity from domestic and regional investors, positioning CEE as one of Europe’s most resilient investment regions.
Poland leads regional economic growth
Macroeconomic performance across CEE remains uneven, but growth is expected to accelerate across the region toward 2027. Poland continues to lead both regionally and within Europe, with GDP growth projected at 3.4 percent in 2025 and rising to 3.7 percent in 2026, significantly above the EU average of 1.4-1.5 percent.
The Czech Republic is forecast to maintain stable expansion at 2.6 percent in 2025 and 2.9 percent in 2026–2027, while Hungary is expected to rebound from 0.4 percent growth in 2025 to 2.3 percent in 2026. Romania is projected to grow by 0.7 percent in 2025 and 1.1 percent in 2026, before accelerating to 2.1 percent in 2027, while Slovakia’s economy is expected to slow from 0.8 percent in 2025 to 0.6 percent in 2026, followed by a recovery to 2.3 percent in 2027.
Economic growth and improved financing conditions are translating into increased investment activity. Poland stands out thanks to strong GDP growth and a resilient occupier market.
Record investment growth driven by regional capital
The 2025 recovery was led primarily by domestic and regional investors. Domestic capital accounted for 86 percent of total investment volume in the Czech Republic, 37 percent in Romania, 18 percent in Poland, a record level, and 12 percent in Slovakia.
Czech funds emerged as the dominant regional capital source, deploying €3.8 billion domestically, nearly €1.1 billion in Poland, and more than €430 million in Slovakia, making them the largest source of investment capital in Poland during 2025.
In 2025, 48 percent of investment volume in Poland originated from CEE capital, the highest share ever recorded on our market. We also observed a notable rise in domestic activity, with Polish investors increasing their share to 18 percent, up from 9 percent a year earlier. The scale of only Czech capital deployment, nearly €1.1 billion invested in Poland alone, clearly illustrates that regional investors are now shaping liquidity across CEE markets. Cross-border capital flows within the region have become a structural feature rather than a cyclical trend,” commented Krzysztof Cipiur, Managing Director, Head of Capital Markets at Knight Frank Poland.
Czech Republic and Slovakia drive market rebound
Investment growth varied significantly across markets. The Czech Republic recorded transaction volumes of €4.39 billion, representing a 137 percent year-on-year increase, while Slovakia achieved 138 percent annual growth, surpassing €900 million in investment volume.
Poland saw a moderate correction after a strong prior year, with volumes declining by 12 percent to €4.5 billion, while Romania experienced a 27 percent decrease, reaching €540 million.
Large-ticket transactions returned to the market, including the acquisition of Prague’s Palladium mixed-use scheme for over €700 million, the largest single-asset transaction in CEE in 2025, alongside the €253 million sale-and-leaseback of Eko Okna’s logistics assets in Poland.
Offices regain dominance as investor strategy shifts
The office sector reclaimed its position as the largest investment segment, accounting for 32 percent of total CEE investment volume. Offices represented nearly 50 percent of transactions in Hungary, 39 percent in Poland, and 36 percent in Romania.
Investor focus is gradually shifting toward core and core+ assets, supported by rental growth expectations and limited development pipelines across regional office markets.
Industrial and logistics assets remained the market’s structural backbone, attracting €2.8 billion in investment volume in 2025, while retail accounted for €1.9 billion, or 17 percent of total activity, driven primarily by retail park transactions.
Czech market remains pricing benchmark
Prime yields in the Czech Republic remained the lowest in the region, compressing to 5.0 percent for office and industrial assets and 5.75 percent for shopping centres, reflecting strong liquidity and intense investor competition.
Across other CEE markets, prime yields stabilised within ranges of: 6.0 percent–7.25 percent for offices, 6.0 percent–7.5 percent for industrial assets, 6.25 percent–7.25 percent for shopping centres.
In the CEE context, the Czech Republic effectively acts as a liquidity anchor. The depth of domestic capital and predictable pricing dynamics provide stability for the wider region, especially at times when international capital is more selective,” said Josef Karas, Head of Investment at Knight Frank Czech Republic.
Outlook 2026: stabilisation and renewed international interest
Investor sentiment across CEE is expected to remain positive in 2026. Poland is forecast to see strengthening activity supported by office recovery and stable industrial demand, alongside expanding domestic capital, which tripled year-on-year.
Hungary’s investment market is expected to stabilise with selective investor re-entry focused on prime ESG-compliant assets.
“Enhanced pricing transparency and more compelling yield premiums are anticipated to progressively restore investor confidence in Hungary, with capital flows likely to concentrate on prime office and logistics assets,” said Erika Loska, National Director at Knight Frank Hungary.
Romania may benefit from the potential return of a 380,000 sqm industrial portfolio to the market, which could significantly increase transaction volumes.
“Romania is forecast to see a rebound in investment activity following a weaker year. Large-scale logistics opportunities could materially change Romania’s investment dynamics in 2026 and strengthen its industrial positioning within CEE,” said Horatiu Florescu Papakonstantinou, Chairman & CEO at Knight Frank CSEE.
In Slovakia, volumes may decline following a record year, primarily due to limited product availability rather than weaker demand.
Rental growth to drive value increases
“Prime yields across CEE are expected to remain broadly stable throughout 2026, with capital value growth increasingly driven by rental increases rather than further yield compression. Strong occupational markets in Warsaw, combined with limited new supply, are expected to support rental growth in prime office assets,” said Charles Taylor, CEO at Knight Frank Poland.
With regional GDP growth projected to significantly exceed the EU average by 2027, CEE markets are positioned to remain among Europe’s most attractive investment destinations.
