How Government Incentives Shape Industrial & Office Real Estate in CEE
MIPIm report
INDUSTRIAL
OFFICE
Scroll down to see the market overview
Economy
Macro
Despite these positive trends, risks remain due to economic challenges in Germany, the main export market for the region. Eurozone GDP growth is projected to exceed 1%, but rising global protectionism, especially under U.S. President Donald Trump's policies, could impact trade dynamics. While direct effects on CEE are expected to be limited, indirect effects through Germany could be significant. The CEE region has seen a resurgence in commercial real estate investment, with Poland recording a 138% growth. Investment volumes increased in various sectors, unlike in Western Europe where they declined. The region offers competitive advantages like lower labor costs, skilled workforce, strong infrastructure, and proximity to major markets. Simultaneously, CEE countries are making significant investments in R&D, AI, digitalization, and automation, with robotics already extensively integrated into various industries.
Economic activity in Central and Eastern Europe (CEE) has rebounded, with the region's average growth rate tripling from 0.6% in 2023 to 2.0% in 2024. According to Colliers' forecast, regional growth will accelerate further in 2025 and approach 2.9% in 2025, with Poland taking the lead at 3.5%. Household consumption is anticipated to remain the primary driver of growth across the region. After significant rises in 2022–2023, inflation dropped to central banks' target ranges by mid-2024. This was accompanied by historically low unemployment rates and strong labor market conditions, pushing wages higher. Legal reforms, such as Poland's 55% minimum wage increase over three years, also boosted wages. Lower financing costs are expected to enhance household spending and corporate investment, supporting GDP growth. Central banks may continue easing interest rates, although gradually, especially in non-eurozone countries.
01
see map
CEE-6
Map
Poland
GDP growth 2024
GDP growth 2025 forecast
GDP per capita (EUR)
Inflation 2024 (per year)
Unemployment rate 2024
2.9%
3.5%
19,900
3.6%
3.0%
Czech Republic
1.0%
2.0%
29,180
2.4%
2.8%
Slovakia
2.1%
22,520
5.4%
Hungary
0.5%
1.9%
20,500
3.7%
4.6%
Romania
0.9%
2.2%
17,020
5.6%
Bulgaria
14,690
4.5%
Source: Eurostat, Colliers
hover over a country to see data
Interactive Map
incentives
CEE
Incentives in Europe are predominantly available in the Eastern and southern parts of the EU. Many companies do not realize the potential of regional aid which can reach even up to 70% of qualified costs The map presents maximum incentive levels approved by the European Commission every 7 years. However, it is to the member states if they will provide incentives, to which projects and in what amount within those limits. Landlords are often disregarding incentives but: In some locations they can benefit from incentives directly e.g. in forms of property tax exemptions In most locations across CEE their tenants will be taking incentives under consideration when selecting locations. The difference could be reaching 5x even on municipality level. Our team can analyze potential of achieving incentives across your portfolio and support your tenants in securing incentives.
Why should you care about the incentives? CEE offers highest state aid limits in the EU
Overview
Investment
At €8.8 billion, 2024 saw CEE investment volumes increase by ca. 70% YoY. The total CEE volume for 2024 is just below the 5- year average for the region. According to preliminary results, on a regional level, this year’s rebound in activity is higher than most European preliminary results, where closing activity is still subdued. Similarly to other markets in Western Europe, after pricing corrections recorded in CEE over the past 12-18 months, the prime yields have stabilised in the second half of 2024 and no significant movement was recorded. 2025 might bring only small corrections as more evidence of prime activity resurfaces across the CEE markets.
Investment volumes in 2024 confirm that the CEE region is back on track, with Poland leading the recovery. The country recorded an impressive 138% acceleration in investments compared to the previous year. This rebound follows a challenging 2023, when both the CEE region and Western Europe experienced weak investment results.
I&L Investment volume (EUR)
1,262m
1,637m
Office Investment volume (EUR)
Prime Office Yield
5.75%
Prime Industrial & Logistics Yield
6.00%
168m
459m
5.50%
5.25%
239m
110m
42m
100m
6.50%
6.75%
293m
150m
7.50%
7.75%
71m
192m
Me!
Contact
Reach out to me to analyse your portforlio for incentives availability!
Jan Kamoji-Czapiński
Director | Incentives Advisory Europe | Strategic Advisory
Market Overview
CEE-6 Office
Tenants prioritize sustainability, pushing investors toward innovation. Hybrid work increases demand for smart technologies and flexible spaces. While some buildings are energy-efficient, older stock struggles with ESG and regulatory demands. The EU's Green Deal accelerates modernization. Despite global trends, CEE markets offer opportunities due to low office supply per capita, low vacancies, and strong demand. Growth is fueled by a cost-competitive, highly skilled workforce. Source: Colliers
The global office sector is evolving due to geopolitical shifts and remote work. While CEE lags behind Western Europe, it has grown significantly. Per capita, even major CEE cities have 2-3 times less office space than Western capitals.
Stock (million sqm)
13.08
Vacancy
14.3%
Under Construction (thousand sqm)
448
Gross Take-Up (million sqm)
1.468
168,080,914
458,713,396
239,000,000
109,735,000
42,150,000
100,200,000
292,950,000
71,400,000
191,845,714
in Poland
Office Markets
CEE capital markets, positioning them as Tier 2 markets. Despite this growth, all regional cities continue to have relatively low office space availability per employee, ranging from 6.2 to 8.5 sqm of existing office stock per office worker.
All regional cities in Poland have experienced significant post-COVID employment growth in the office sector, ranging from 19% in Łódź to 52% in Kraków, with a substantial share of this growth driven by the Business Services Sector. Three major regional office markets in Poland have a larger employment base and office stock than some
Short commentary
Legend
28.5
4.86
7.4%
164
Gross Take-Up (thousand sqm)
645
Prime rent (€)
29
2.08
12.6%
77
199
19
4.45
14.1%
336
502
25.5
3.41
13.0%
58
339
22
2.47
13.3%
280
192
16
for Office Occupiers in CEE
Investment Incentives
Investment incentives across Central and Eastern Europe (CEE) are primarily geared toward R&D and Business Services Sector (BSS) projects, with support levels increasing for more advanced operations. In some cases, incentives can reach up to €30,000 per new employee (e.g., Croatia). Both regional cities and select capital cities—such as Tallinn, Riga, Vilnius, and Zagreb—offer financial aid, including cash subsidies and tax incentives, making them attractive destinations for new investments. With many companies factoring in incentive availability when choosing a location, office landlords can strengthen their leasing proposition by highlighting these opportunities to potential tenants.
incentive comparisons across CEE.
Click on the map to explore
Note: Bubble size not proportional across different categories Source: Colliers’ analysis based on ABSL, OxfordEconomics, Eurostat
in Europe
Tier 1: Warsaw, Budapest, and Prague; Tier 2: Bucharest, Sofia, and Bratislava; Tier 3: Vilnius and Riga. However, three cities—Budapest, Sofia, and Vilnius—stand out due to their relatively low office space availability per office employee, with an average of less than 8 sqm of existing office stock per office worker.
Most capital cities in Central and Eastern Europe (CEE) experienced significant post-COVID employment growth in the office sector, with the highest increases recorded in Vilnius and Warsaw (both at 26%). In many cases, this growth was driven by the Business Services Sector, which accounts for between 13% (Budapest) and 27% (Prague) of total office employment. When analyzing office stock, we can categorize CEE markets into three tiers based on size:
Riga
Vilnius
Warsaw
Prague
Budapest
Bratislava
Bucharest
Sofia
Kraków
Wrocław
Tricity
Katowice
Łódź
Poznań
MARKET OVERVIEW
click on a dot with the city name
CEE-6 Industrial
Strategically located at the heart of Europe, the CEE region serves as a key intersection between East and West, with its geographical and topographical characteristics further shaping its appeal. The region benefits from excellent access to international transportation networks, including road, rail, river, seaports, and air terminals. Compared to Western Europe, the CEE region is developing at a rapid pace. With the current per capita industrial and logistics stock at approximately 0.7—significantly lower than the levels seen in some Western European countries, where it can reach 3—the region has substantial growth potential in the long term. Source: Colliers
The CEE-6 region is the most developed industrial and logistics market within the broader CEE-13. It accounts for nearly 90% of the region’s total modern industrial and logistics stock. Several factors influence market demand and decision-making processes.
34.1
Under Construction (million sqm)
1.7
5.8
4.20
12.3
3.1%
1.4
7.45
4.1
4.9%
0.2
0.5
5.05
5.6
7.6%
0.6
0.8
5.50 - 5.75
7.6
5.0%
4.50 - 5.00
2.3%
0.1
5.50
for Industrial & Logistic Projects in CEE
