CEE Summit: EU stability and governance attract global real estate capital

European Union countries are increasingly attractive to international capital seeking long-term investments in real estate, delegates heard at the CEE Summit 2026, organised by Real Asset Media and The Poland Observer, which took place in Warsaw recently.

“When I look for a democratic, liberal area in which to invest with good political and macroeconomic governance, the European Union looks pretty attractive right now, as it is maybe the only grown-up left in the world”, said Sabina Reeves, Chief Economist & Head of Insights & Intelligence, CBRE Investment Management, in her keynote speech on ‘The CEE Region – a Global Investor’s Perspective’.

Speaking from the perspective of a long-term core real estate investor managing assets typically held for eight to ten years, Reeves offered a compelling framework for navigating the current environment.

“We are now in a G-zero world”, she said. “Geopolitical shocks are going to keep coming, but our investors are not paying us to be on hold until things calm down. Things are not going to calm down.”

When investing for the long term, the big picture really matters. We are used to the G7 group of nations that come together to figure out the solution to exogenous shocks. However, things have changed recently, Reeves said: “Whenever something goes wrong, the US comes in and puts the fire out. But this year it feels like the US is more like a flamethrower than a fire extinguisher.”

She identified de-globalization and structurally higher, more volatile inflation as the two defining global trends reshaping real estate fundamentals, from construction costs to tenant supply chains to the cost of materials. In this ‘new normal’ inflation shocks are the norm and interest rates will therefore trend higher.

As investors have to continue to be active in the market in this new “G-zero” world, they need to look at countries where, whatever geopolitical shocks they have to deal with, “there are grown-ups in charge that will do their best to sensibly mitigate those shocks”, she said. “So I do think that all of this political and geopolitical chaos, while very difficult to underwrite as an investor, actually does give an advantage to EU countries, provided they can get their act together. We are very positive on the region now.”

CBRE IM is forecasting higher total returns in Europe than in the US or Asia Pacific, which is highly unusual, she said: “Traditionally, we said to our global investors, you go to the US for growth and you come to Europe for steady income, low interest rates”, she said. “But now you come to Europe for higher returns too. And interestingly, not just higher returns as a core investor, but for a higher income premium over the local cost of borrowing.”

International investors are seeing the opportunities, Reeves said: “When you go to Japan now, or Australia, Singapore, Malaysia or Canada, people are talking about Europe in a way they did not two years ago. And they want to get into the detail of where the markets are, not just Paris and German markets and London. They want to know more about Spain and northern Italy and CEE.”

The UK and France are the largest real estate markets in Europe, but they are anchored to uncomfortably high interest rates due to fiscal fragility, “which makes it very hard to allocate capital there”, Reeves said, while Southern Europe has been performing well.   

As for Central and Eastern Europe, “historically for us CEE has been Poland, the Czech Republic, and small allocations to places like Slovenia”, she said. “We have not invested in Hungary but are now looking at the Hungarian market with a great sigh of relief. We are desperate to reallocate to this region and to be more diverse within the region. And I bet there are many other investors who are looking at Hungary again, just like us.”