Investment activity in the Central and Eastern European (CEE) real estate market has clearly shifted into expansion mode. In 2025, the total investment volume reached €11.3 billion, representing a 34% year-on-year increase and a level 24% above the five-year average, according to the latest Investment Market CEE 2025 report.
The growth reflects rising activity from domestic and regional investors and highlights the increasing importance of CEE markets within the broader European investment landscape.
The recovery has been supported by improving macroeconomic conditions and stronger engagement from domestic and regional capital, reinforcing CEE’s position as one of the most resilient investment regions in Europe.
Poland Leads Economic Growth in the Region
Macroeconomic conditions across the CEE region remain varied, but overall growth is expected to accelerate across the region by 2027. Poland continues to hold a leading position both regionally and in comparison with the rest of Europe.
Poland’s GDP growth reached 3.4% in 2025 and is projected to rise to 3.7% in 2026, significantly above the EU average of around 1.4–1.5%.
In the Czech Republic, economic growth is expected to remain stable at 2.6% in 2025 and 2.9% in 2026–2027, while Hungary is projected to rebound from 0.4% in 2025 to 2.3% in 2026.
Romania’s GDP growth is forecast to reach 0.7% in 2025 and 1.1% in 2026, before accelerating to 2.1% in 2027. Meanwhile, Slovakia’s economy is expected to slow from 0.8% in 2025 to 0.6% in 2026, followed by a recovery to 2.3% in 2027.
Stronger economic growth combined with improved financing conditions is translating into increased investment activity across the region.
Against this backdrop, Poland stands out thanks to its strong economic performance and resilient occupier market.
Record Growth Driven by Regional Capital
The rebound in 2025 was primarily driven by domestic and regional investors. Domestic capital accounted for 86% of investment volume in the Czech Republic, 37% in Romania, 18% in Poland—a record level—and 12% in Slovakia.
Czech investment funds emerged as the dominant source of capital in the region, investing €3.8 billion domestically, nearly €1.1 billion in Poland, and more than €430 million in Slovakia. In 2025, they became the largest source of investment capital in the Polish real estate market.
“In 2025, 48% of investment volume in Poland originated from CEE capital, representing the highest share ever recorded in our market. We also observed a clear increase in domestic investor activity, with the share of Polish capital rising to 18% from 9% a year earlier. The scale of Czech capital alone—nearly €1.1 billion invested exclusively in Poland—clearly shows that regional investors are increasingly shaping liquidity across CEE markets. Cross-border capital flows within the region are becoming a permanent feature of the market rather than merely a cyclical phenomenon,” commented Krzysztof Cipiur, Managing Director and Head of Capital Markets at Knight Frank Poland.
Czech Republic and Slovakia Drive Market Recovery
Investment dynamics varied significantly across individual markets.
In the Czech Republic, transaction volumes reached €4.39 billion, representing a 137% increase year-on-year, while Slovakia recorded a 138% increase, surpassing €900 million.
Poland experienced a moderate correction following a particularly strong previous year, with investment volume declining 12% to €4.5 billion. Romania, meanwhile, saw a 27% drop to €540 million.
Large transactions also returned to the market, including the acquisition of the Palladium mixed-use complex in Prague for more than €700 million, which became the largest single-asset transaction in the CEE region in 2025. Another notable deal was the €253 million sale-and-leaseback transaction of Eko Okna’s industrial and logistics assets in Poland.
Office Sector Returns as the Largest Investment Segment
The office sector regained its position as the largest investment segment, accounting for 32% of the total investment volume in the CEE region.
Office assets represented nearly 50% of all transactions in Hungary, 39% in Poland, and 36% in Romania.
Investor strategies are gradually shifting toward core and core+ assets, supported by expectations of rental growth and the limited supply of new projects across regional office markets.
The industrial and logistics sector remains a structural pillar of the market, attracting €2.8 billion in investments in 2025. Meanwhile, the retail sector accounted for €1.9 billion, representing 17% of total activity, largely driven by transactions involving retail parks.
Czech Market Sets the Benchmark for Pricing
The lowest prime yields in the region were recorded in the Czech Republic, where yields declined to 5.0% for office and logistics assets and 5.75% for shopping centres, reflecting strong market liquidity and intense investor competition.
Across the rest of the CEE region, yields stabilized within the following ranges:
- 6.0%–7.25% for office assets
- 6.0%–7.5% for industrial and logistics properties
- 6.25%–7.25% for shopping centres
“Within the CEE region, the Czech Republic serves as a kind of liquidity anchor. The depth of local capital and the predictability of valuations provide stability for the entire region, particularly during periods when international capital becomes more selective,” said Josef Karas, Head of Investment at Knight Frank Czech Republic.
Outlook for 2026: Stabilisation and Return of International Capital
Investor sentiment in the CEE region is expected to remain positive in 2026.
In Poland, investment activity is likely to strengthen, supported by a recovery in the office sector, stable demand for logistics space, and the growing role of domestic capital, which tripled year-on-year.
Hungary’s investment market is expected to stabilize as investors gradually return, focusing selectively on high-quality assets that meet ESG standards.
“Greater transparency in pricing and more attractive risk premiums should gradually rebuild investor confidence in the Hungarian market, although capital flows will likely concentrate on prime office and logistics assets,” said Erika Loska, National Director at Knight Frank Hungary.
Romania could benefit from the potential return of a 380,000 sqm logistics portfolio to the market, which could significantly increase transaction volumes.
“After a weaker year, we expect investment activity in Romania to rebound. Significant opportunities in the logistics sector could materially change market dynamics in 2026 and strengthen Romania’s position within the regional industrial segment,” said Horatiu Florescu Papakonstantinou, Chairman and CEO at Knight Frank CSEE.
In Slovakia, investment volumes may decline following a record year, mainly due to the limited supply of investment products rather than weaker demand.
Rental Growth to Drive Asset Value Increases
“We expect prime yields across the CEE region to remain largely stable in 2026, while capital value growth will increasingly be driven by rental increases rather than further yield compression. Strong occupier markets in Warsaw, combined with limited new supply, should support rental growth in prime office assets,” said Charles Taylor, CEO of Knight Frank Poland.
Considering economic growth forecasts for the region—which are expected to significantly exceed the EU average by 2027—CEE markets remain among the most attractive investment destinations in Europe.
