Hotels Rank Second by Investment Volume in Central and Eastern Europe

The recovery of the Central and Eastern European investment market by the end of the third quarter of 2025 remained slow and uneven, as noted in a Colliers study. Investors continue to act cautiously, although willingness to pursue selective transactions is gradually returning. Geopolitical and macroeconomic risks persist, but the region is no longer perceived solely as a high-risk zone.

Investment volumes

The total volume of investment in commercial real estate across Central and Eastern Europe in the first three quarters of 2025 increased by 38% year on year and exceeded €7 billion, according to The CEE Investment Scene report. More than 70% of activity was concentrated in Poland and the Czech Republic, which attracted €2.6 billion and €2.5 billion respectively.



At the same time, Poland recorded a moderate year-on-year decline of 6%, while the Czech Republic posted growth of 131%. In the Czech market, momentum was driven by several segments at once — offices, industrial, hospitality and mixed-use assets — each showing triple-digit growth. In Hungary, investment volume rose by 237%, in Slovakia by 234%, while Bulgaria added only 14%. Romania was the only market in the region to record a decline, down 38% year on year.

Who is investing

The capital structure remains diversified and includes both local and cross-border sources. US funds are most active in logistics and net-lease strategies, where the key factor is the stability of operating cash flows. Western European investors — from Germany, France and Scandinavia — are returning via indirect structures and individual mandates, focusing on high-quality, resilient assets.

Overall, cross-border capital accounted for around 38% of the market: Western Europe contributed 20%, US investors 11%, and Middle Eastern funds 7%. Capital from the Asia-Pacific region remains minimal, at less than 1%. The largest share, however, was provided by regional investors: the Czech Republic accounted for 34% of all transactions, Hungary 9%, Poland 8%, and other Central European countries around 6%.



The distribution of domestic capital across individual markets is uneven. In the Czech Republic and Hungary, domestic investors account for 63% and 78% of transactions respectively; in Bulgaria, their share consistently exceeds 70%. Poland shows the opposite structure: local investors generate around 23% of the market, reflecting the high share of cross-border capital. However, activity by private investors and family offices reached a record €600 million over the period. In Romania, domestic capital represents about 29% of transactions, while in Slovakia it accounts for just 8%.

Market segments and yield indicators

Industrial real estate remains one of the key drivers of activity. Investments in the first three quarters approached €700 million, including the year’s largest transaction — Blackstone’s acquisition of a stake in the Contera portfolio. Yields in the segment remain low: around 4.25% in Prague, 4.75% in Warsaw, and 5.0–5.25% in Bratislava and Budapest. In Bucharest and Sofia, yields reach 7–7.25%.

The hospitality sector ranked second by investment volume, exceeding €490 million. This figure includes transactions involving Hilton and Four Seasons properties in Prague. In Hungary, investment volume reached €170 million, up 186% year on year.

Offices are showing a gradual recovery. Demand is concentrated on high-quality assets in central business districts, while older buildings are undergoing refurbishment. Prime yields stand at around 4.5% in Prague and Warsaw, 5.25–5.50% in Budapest and Bratislava, and 7–7.25% in Bucharest and Sofia.



Logistics remains stable: demand from tenants with long-term leases persists, and portfolio deals are under discussion. Yields are close to industrial levels: around 4.75% in Warsaw, 5.25% in Bratislava, 6.25% in Budapest, and 7.25% in Bucharest and Sofia.

In retail, the main focus is on assets with repositioning potential. In Slovakia, the retail sector accounted for about half of total investment activity. Shopping centre yields are around 5.5% in Prague, 6.25% in Warsaw, 6.0–6.5% in Budapest and Bratislava, and 7.5–7.75% in Bucharest and Sofia.

Alternative segments are developing gradually. Interest is concentrated on self-storage, data centres, student housing and senior living. For a number of formats, the regulatory environment remains a constraining factor; yield indicators are not disclosed.

Market structure by share — offices lead, accounting for around 30% of transactions versus 28% a year earlier. Industrial real estate maintained its share at 28%. Retail reduced its presence from 25% to 20%. The hospitality segment’s share increased from 6% to 10%, reflecting the recovery of tourism activity. Residential real estate declined from 11% to 7%, while mixed-use assets increased from 2% to 5%.

Outlook

According to Colliers, average GDP growth in Central and Eastern European countries is expected at around 2.4% in 2025 and 2.8% in 2026, compared with 1.3% and 0.8% respectively in Western Europe. Poland will lead, with economic growth of 3.5% in 2025 and 3.4% in 2026. Bulgaria shows comparable momentum at 3.1% and 3.0%. Slovakia and Romania remain below the regional average range, at 0.5–1.9%.
The stability of the outlook is supported by resilient household consumption, monetary policy easing, continued absorption of EU funds and low unemployment. These factors reduce the region’s vulnerability to external shocks and create more predictable conditions for investment activity.



In recent years, the market has shown volatility: after declining to €5.2 billion in 2023, it partially recovered in 2024, when transaction volume reached €8.8 billion. According to Colliers, by the end of 2025 the figure could return to a range of €10.5–11 billion, approaching the levels of 2021–2022. Against this backdrop, the previous “cautious optimism” is transforming into a pragmatic approach: investors are ready to allocate capital, but on the basis of stricter asset selection and sector specialisation. This creates prerequisites for growth, but not for a sharp acceleration of the market.

Analysts at International Investment note increased activity in the hospitality sector, which is becoming a sustainable global trend. The recovery of international tourism, the rise in travel volumes and changes in travel patterns are strengthening investor interest in accommodation assets — especially branded luxury-category complexes. This segment is considered the most stable: it demonstrates fast payback periods and yields that significantly exceed those of traditional real estate formats.

This approach is also confirmed by practice in individual markets. In Georgia, one of the most illustrative examples is the hotel complex Wyndham Grand Batumi Gonio. Guaranteed yields are around 10% per annum, while potential returns, according to the developer and management company, reach 19%. Such assets are in demand thanks to the combination of an international brand, a high level of service and stable tourism demand.

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