CEE real estate faces decarbonisation dilemma as pressure mounts on landlords
Real estate owners across Central and Eastern Europe are under mounting pressure to decarbonise as regulatory scrutiny and investor demands intensify. Speaking at the CEE Summit, held from 4 to 5 June in Warsaw, industry leaders warned that sustainability is no longer optional — but significant barriers remain, including cost, accountability, and the lack of consistent benchmarks.
Leading figures in sustainability, law, and logistics debated whether Central and Eastern European (CEE) markets can keep pace with EU climate policy and tenant demands.
“It’s not about ambition anymore. It’s about accountability,” said Francesca Galeazzi, head of sustainability and decarbonisation in real estate at KPMG Deutschland, the German arm of the global consultancy. “You need to have a plan, you need to measure, you need to show performance — otherwise, you’re going to be left behind.”
Galeazzi said clients were increasingly linking climate performance with financial outcomes. “Valuations are already being affected by ESG risks. We’ve had cases where the valuation was slashed by 20% because of stranded asset concerns.”
Patryk Figiel, head of the energy and infrastructure practice at Addleshaw Goddard, a UK-headquartered law firm, said the regulatory push was only just beginning. “It’s becoming very clear that the regulatory environment will do the heavy lifting — especially in CEE where capital markets have not been as strong in punishing or rewarding green performance.”
Ian Worboys, the CEO of European Green Logistics Space, a sustainable industrial property developer, said that occupier behaviour was changing rapidly. “Tenants are now asking real questions — ‘What’s the embodied carbon of this building?’ ‘What’s your operational performance like?’ — not just the EPC rating.”
But challenges persist. “Retrofitting at scale is expensive and complex. We’re seeing a huge gap between what’s technically possible and what’s commercially viable,” said Mariusz Witkun, co-founder of Trebbi Polska, a Poland-based project and cost management consultancy.
Figiel added that new lease structures are being tested. “Green leases are moving from symbolic to substantive — tenants want data access, performance clauses, and alignment of incentives.”
CEE’s pace of adoption remains uneven, panellists agreed. “There’s progress, but the gap with Western Europe is still wide in terms of standards and enforcement,” said Galeazzi. “And we don’t yet have a consistent benchmark for what a low-carbon portfolio really looks like.”
Worboys pointed out that even sustainability-minded investors were struggling with the lack of standardisation. “Everyone says they want ESG-aligned assets — but what counts as alignment? Is it about targets, disclosure, or actual delivery?”
Despite the complexity, the direction of travel is clear. “Change is coming, whether you’re ready or not,” said Figiel. “Better to be proactive than reactive — because regulation will catch up quickly.”
The panel was moderated by Alicja Kuczera, CEO of the Polish Green Building Council (PLGBC).
