Economic growth prospects remain among the most robust in Europe for 2027, led by Poland (+3.0%), Czech Republic (+2.1%), Romania (+2.1%) and Hungary (+2.0%), outperforming the Eurozone average of 1.5%, according to Oxford Economics. Strong domestic demand and investment volumes underpin the outlook, providing a supportive environment for occupier activity.
CEE offices are benefitting from some of the strongest fundamentals in Europe.
Over the last 12 months, the average CEE office vacancy rate has fallen to 8.1%, below that of the European average of 9.4%, supported by low vacancy rates in Warsaw (8.5%) and Prague (5.8%). In Warsaw, low development completions, and the conversion or demolition of secondary office buildings have kept overall stock broadly stable. Of the office stock built since 2021 in central hubs, only 1.2% is currently vacant. Prague shows a similar pattern - new office completions in H1 2026 were 33% below the five-year H1 average, with upcoming supply ever further limited, while centrally located demand continues to favour high-quality office stock. Higher development costs have squeezed the Czech capital’s development completions, keeping vacancy rates low.
This undersupply of prime office space is applying upward pressure on prime rents. Warsaw (+9.6% YoY), Budapest (+7.1% YoY) and Prague (+3.3% YoY) have all recorded positive rental growth over the last 12 months and the years previous.
Yields remain attractively priced as liquidity returns
A resilient economic backdrop is turning investor attention back to CEE. INREV’s latest survey indicates that Core CEE has risen to the third most favoured location for European investors, after Spain and Italy. This is evidenced by a rise in investment transactions across the region too. In H1 2026, CEE office investment volumes reached €1.5bn, 6% above the five-year average, while European office investment remains 30% below its equivalent average.
New cross-border sources of capital, including SCPIs, are being drawn in by the attractive yields on offer in the region, while Swedish investor, Stena Real Estate AB, acquired the Studio A office development in Warsaw from Skanska during Q3 2026. Czech funds have been particularly active across the CEE region over the last 12-18 months and have become increasingly competitive across commercial sectors in western Europe, buying in the UK and Germany too. Their buying power continues to grow with impressive net fund inflows and their geographical spread continues to widen.
Prime office yields in Warsaw (6.00% but expected to benchmark well below in H2), Prague (5.25%), Budapest (6.75%) and Bucharest (7.20%) are attractive compared to core European markets which remain in the low-mid 4% range. In an elevated risk-free rate environment, characterised by compressed risk premiums, investors can no longer rely on yield compression to drive returns, as they now place more emphasis on income.