CEE region Poland and Hungary lead the way with investment

The slowdown was driven primarily by weaker quarterly results in the Czech Republic and Slovakia after last year’s record performance, rather than any meaningful decline in investor appetite.

Against a backdrop of renewed geopolitical tensions, elevated energy prices and fading expectations of monetary easing, capital has not retreated from the region. Instead, investors have become more selective, increasingly relying on domestic and regional capital to drive transactions and maintain liquidity.

Hungary and Poland Lead the Momentum

Hungary emerged as one of the strongest performers in the first quarter of 2026, with investment volumes in excess of EUR 325 mln—nearly double the level recorded a year earlier and marking the country’s strongest start since 2018. This rebound comes amid a politically significant election year, which has reignited discussions about institutional direction and relations with European partners.

Rather than deterring investment, this environment has encouraged selective risk-taking. Domestic and regional investors, in particular, have taken a more active role, leveraging long-term strategies to re-enter the market, support price discovery and restore liquidity. Early signs suggest that parts of the market are positioning for medium-term opportunities rather than remaining on the sidelines.

Poland, meanwhile, reaffirmed its status as the region’s core investment market. First-quarter volumes approached EUR 1.1 bln, representing an increase of over 40 pct year on year and the strongest start since 2022. The market stood out not only for its scale but also for the diversity and quality of transactions.

Logistics assets led activity, while retail regained prominence through large portfolio deals. The office sector also showed signs of recovery, particularly for well-located assets. A key structural trend underpinning Poland’s resilience is the growing role of domestic capital, which has evolved into a stable and reliable source of demand, improving execution speed and reinforcing overall market confidence.

Selective Growth Across the Region

Elsewhere in the region, Bulgaria recorded a notable increase in activity, with investment volumes surpassing EUR 100 mln—more than double the level seen a year earlier and the strongest start to a year since 2007.

Other CEE markets experienced year-on-year declines, particularly the Czech Republic and Slovakia, where volumes fell significantly compared to their exceptionally strong first quarter in 2025. However, this moderation reflects base effects and transaction timing rather than weakening fundamentals. Romania saw only a mild slowdown.

Retail Leads, but Other Sectors Remain Active

Retail assets attracted the strongest investor interest across the region, continuing trends observed in 2024 as recovering household consumption supported economic growth. Nearly EUR 630 mln was invested in retail in the first quarter alone.

At the same time, offices attracted over EUR 600 mln, while industrial and logistics assets accounted for approximately a quarter of total volumes. Despite the continued rise of e-commerce, physical retail remains resilient, with retail parks expanding rapidly while older shopping centres increasingly require repositioning and redevelopment.

Shifting consumer preferences toward services—such as leisure, entertainment, gastronomy and sports—are also reshaping the retail landscape across CEE.

Macro Challenges Persist, but Markets Adapt

The broader macroeconomic environment remains challenging. Rising energy prices, partly driven by geopolitical instability in the Middle East, are pushing inflation expectations higher and delaying anticipated interest rate cuts in 2026. Central banks have adopted a cautious, wait-and-see approach, with the possibility of modest tightening by the European Central Bank later in the year.

However, current inflation dynamics differ significantly from the post-pandemic period. Demand is more subdued, monetary conditions are already restrictive and the risk of overheating has diminished. As a result, markets are adjusting rather than stalling.

Cautious Optimism for 2026

A defining feature of the current market cycle is the growing importance of domestic and regional capital. Investors are increasingly focused on long-term fundamentals, income stability and execution certainty rather than short-term market timing.

While geopolitical risks and economic uncertainty remain, they have not halted capital flows into CEE commercial real estate—only reshaped them. The region’s ability to adapt to sustained uncertainty is emerging as a key strength.

As the year progresses, Central and Eastern Europe is expected to remain an attractive destination for investment, supported by resilient market structures, improving liquidity and a more mature, locally anchored investor base.