The modern retail market in Central and Eastern Europe has been evolving for three decades. A significant portion of retail real estate has now reached an age where it requires new investment. According to Colliers’ latest report, ExCEEding Borders Retail 2026, the region’s six major countries and the Baltic states have a combined total of approximately 33.3 million sqm of modern retail space. Approximately 20 million sqm of this volume, or roughly two-thirds, is over 15 years old. In the Czech Republic, this share is even higher at 69%.
“The advanced age of the retail portfolio does not mean that the Czech market is becoming obsolete across the board. On the contrary, it is entering a new phase. This is one where the focus is shifting from new construction to investment in existing properties. Owners are increasingly modernising their properties, changing their tenant mix and expanding their range of services offered. Comprehensive renovation or demolition followed by new construction occurs only in exceptional cases,” explains Josef Stanko, Director of Market Research at Colliers.
Prague in the middle of the regional rankings
Ageing retail space is most heavily concentrated in capital cities. Budapest has the highest share of modern retail property older than 15 years at 84%, followed by Riga at 76% and Warsaw at 70%. With a 63% share, Prague ranks mid-range alongside Bratislava, just ahead of Vilnius (62%) and Bucharest (59%). Only Sofia has a significantly younger portfolio: space older than 15 years accounts for just 39% there.
“The Czech retail market ranks among the most mature in the region, but a building’s age alone does not mean that a centre will cease to function. Most Czech centres continue to attract tenants and visitors, so owners are much more likely to opt for partial modernisation, a new tenant mix and expanded services rather than demolition. A property’s specific location, catchment area and technical condition will always determine which approach makes sense,” comments Josef Stanko.
Cities with up to 100,000 residents have the largest share of retail space
Smaller cities with up to 100,000 residents have the largest volume of retail space in the Czech Republic: nearly 1.95 million sqm. Medium-sized cities with over 100,000 residents have approximately 1.17 million sqm, and Prague has roughly 1.1 million sqm.
Medium-sized cities have the oldest retail portfolio: approximately three-quarters of the space there was built more than 15 years ago, and supply has expanded only minimally over the past decade. In contrast, smaller cities and Prague have seen the most new construction over the past decade, with each adding approximately 0.35 to 0.4 million sqm of retail space.
Kotva, Máj and Spektrum: three different paths
Three examples from Prague and the surrounding area illustrate what a second life for ageing retail properties might look like. The Kotva department store, built in the 1970s, was one of the largest retail buildings of the communist era. After the transition to a market economy, it changed hands several times and operated as a shopping centre with mixed success. The current owner, Generali, is now comprehensively converting it into a modern department store modelled on European establishments such as KaDeWe and Selfridges, while preserving its architectural value. It is scheduled to reopen in 2028.
The former Máj department store, also opened in the 1970s, took a different path. After several changes in ownership, the current owner transformed it into a Fun House, an entertainment destination centred on dining, leisure and experiential shopping. The building now features restaurants, bars and dining concepts, including the first Czech branch of Five Guys.
The third model is the Spektrum Shopping Centre in Čestlice, one of the few cases of demolition and new construction on the Czech market. The original centre was demolished in 2019 due to structural problems and replaced by a modern retail park that better meets the current needs of both retailers and customers. Colliers’ previously mentioned report highlights the Czech Republic and Poland as markets where older centres (often built around a hypermarket) are being converted into retail parks as an alternative to complete reconstruction.
Customers are ageing, and their purchasing power is growing
The transformation of shopping centres is closely linked to demographics. The region’s population is ageing and, in some countries, even declining. Household purchasing power, however, continues to grow as wages and productivity converge with Western European levels. Adjusted for price differences, incomes in Prague and Warsaw are already comparable to those in Brussels and Lyon. According to the Colliers report, Prague’s consumer market will grow mainly due to higher incomes, while population growth will play only a minor role.
At the same time, the ageing population is shifting its spending toward healthcare, leisure and services. As a result, shopping centre owners are supplementing traditional retail with dining, entertainment, fitness, wellness, healthcare facilities, coworking spaces and community services. These offerings give people another reason to visit such retail spaces and are less exposed to competition from online shopping.
The Colliers report concludes that the next phase of retail in the region will be about adapting better to the changing needs of customers and tenants rather than adding new space. Demographics, digitalisation and sustainability requirements will intensify the pressure for change, although the specific approach will vary from property to property. The current cycle therefore does not signal the end of shopping centres. Rather, it is reshaping the idea of what a successful retail destination looks like: one where shopping is integrated with dining, services, entertainment and community life.
