CEE-6 OFFICE MARKET Q1 2026
CEE Office Market Overview: Limited New Supply Supports Vacancy Compression and Firm Prime Rents
Office market conditions across the CEE-6 capitals (Warsaw, Prague, Budapest, Bucharest, Bratislava, Sofia) remained broadly stable in Q1 2026. The region continued to benefit from improving growth momentum and easing inflation, while occupiers maintained a selective approach to decision-making. With development delivery still low, vacancy continued to trend downward at the regional level, supporting rental resilience in the best-performing submarkets and the most modern, well-located buildings.
CEE macro conditions improved at the start of 2026. Regional GDP growth increased to 2.7% in Q1 2026, with growth forecast at 2.5% in 2026 and 2.8% in 2027. Inflation continued to cool, with average harmonized inflation at 3.5% in Q1 2026, while unemployment remained low at 4.4% across the CEE-6. Consumer activity strengthened, reflected in 2.7% real retail sales growth, although industrial production still declined by 0.8% year-on-year in Q1. Overall, the macro backdrop supported steady office occupier conditions, but with continued focus on cost control and space efficiency.
Supply conditions remained the defining theme for the CEE office market. Total office stock across the CEE-6 capitals reached 22,225,100 sq m at the end of Q1 2026. With only 98,100 sq m delivered during the quarter, new development continued to lag historical norms. As a result, average vacancy eased to 10.3%, extending the downward trend seen since early 2024.
Construction activity showed early signs of rebuilding from a low base. A total of 1,377,900 sq m was under construction across the CEE-6 at quarter end, 12% higher than the same period last year. Roughly half of the pipeline is being developed speculatively, although risk profiles vary materially between markets, with 12% speculative share in Budapest versus 92% in Warsaw.
Leasing demand remained active but normalized quarter-on-quarter. Gross take-up across the CEE-6 capitals totaled 512,000 sq m in Q1 2026, down 44% versus the previous quarter, but 4% higher than Q1 2025. Net absorption was positive in all six capitals, and occupied office stock increased by almost 550,000 sq m over the past 12 months.
Occupier behavior continued to reflect a flight to quality. Tenant requirements remained focused on modern, efficient, well-connected office space, with demand differentiation strongest in central locations and in buildings aligned with evolving sustainability expectations. This is consistent with broader European patterns, where leasing is increasingly concentrated in higher-quality space and core locations.
Rental conditions remained firm in prime submarkets, supported by tightening vacancy and limited near-term deliveries. In March 2026, prime office rents in Warsaw stood at EUR 24.00–29.00/sqm/month in central locations and EUR 15.00–19.00/sqm/month in non-central areas. Prague’s prime rents held at EUR 30.00/sq m/month in the city center.
Budapest CBD prime rents remained stable at EUR 25/sq m/month, with occupier preference continuing to favor new or refurbished ESG-aligned assets. In Bucharest, prime headline rents in the CBD remained stable at EUR 21.00–22.00/sq m/month, while upward rental movements were also evident in selected central and semi-central submarkets amid limited CBD availability.
Outlook
- Vacancy likely to remain under downward pressure in markets where completions stay limited and availability in prime areas remains constrained.
- Leasing demand should stay selective, not absent, with renewals and quality-led relocations continuing to drive activity, particularly for well-located Class A buildings.
- Prime rents are expected to remain resilient in CBD and top submarkets, while non-prime locations may require more competitive incentive positioning to capture demand.
- Development risk will remain uneven across the region, with speculative exposure differing significantly by market and project, reinforcing the importance of pre-leasing and financing discipline.
