European Outlook 2026

Unlock the Future of Real Estate

Our latest report, "Czech Republic Real Estate Market Outlook 2026," provides key insights and trends to help you understand the market.

After a period of heightened uncertainty, GDP growth is expected to accelerate, inflation to stabilize within the CNB's target range, and unemployment to remain exceptionally low, among the lowest in Europe. Domestic demand remains robust, and with the recovery of foreign demand, the outlook for the industry is also improving.

This combination of macroeconomic factors creates a solid foundation for the real estate market, which is entering 2026 with different dynamics across individual segments.

Investment Market 

After a record-strong 2025, investment activity is expected to weaken slightly in 2026 and return to more sustainable long-term levels. Prime yields should remain largely stable in the coming months, with the possibility of slight compression in hotel assets, where demand remains strong.

Prague Office Market 

The Prague office sector enters 2026 with historically low new supply, a result of elevated construction costs and cautious development activity. Vacancy rates continue to fall, intensifying competition for high-quality space. Prime office rents are expected to rise further in central and inner city locations, supported by strong occupier demand, limited pipeline, and a growing emphasis on sustainability, energy efficiency, and workplace quality.

Industrial Market 

Industrial demand remains resilient, though the market is transitioning into a more balanced phase. New supply remains high, and vacancy is expected to increase slightly to around 4.5% in 2026. While prime rents in Greater Prague are expected to remain stable, some oversupplied submarkets may experience downward pressure on average rents. Development activity is likely to become more selective, focusing on established high-demand hubs.

Retail Market 

Prague’s Pařížská Street continues to rank among the world’s most prestigious luxury retail destinations, with strong brand demand and stable prime rents. Retail parks remain the dominant driver of new supply, reflecting occupiers’ preference for flexible, cost-efficient formats. Shopping centres are increasingly shifting toward refurbishment, mixed-use concepts, and experiential upgrades. Prime rents across all retail segments are expected to grow moderately in 2026, supported by stable macroeconomic conditions and recovering consumer spending.

Hotel Market 

Prague’s hotel market continues its post-pandemic recovery, with occupancy, ADR, and RevPAR all showing solid year-on-year growth. Supply remains constrained, with only modest additions planned for 2026—primarily in the upscale segment. International visitor numbers are expected to continue growing thanks to improving air connections, leading to an overall increase in demand for paid accommodation above 2025 levels.

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