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LITHUANIA

OFFICE MARKET IN VILNIUS

FLEXIBLE OFFICE SHARE HAS DOUBLED IN THE LAST FEW YEARS

After the significant new office supply increase in 2016, the Vilnius market for modern offices continued to grow rapidly in 2017. In total 13 new projects/stages were completed in 2017 bringing 72,200 sqm of office space to the market. After completion of these projects, the total area of usable modern office space (A and B class) grew by almost 12% to 699,600 sqm at the end of 2017 (see all projects on OHMAP). Currently Vilnius has 1.28 sqm of usable office space per capita. By floor space, A class constitutes 36% of the total modern office premises in Vilnius, and B class – 64%.

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RETAIL MARKET IN VILNIUS

LARGER NEW TRADITIONAL SHOPPING CENTRES EXPECTED NO EARLIER THAN 2019-2020

In 2017, no large traditional shopping centres were opened in Vilnius; the capital has not seen any new projects since the second stage of the NORDIKA shopping centre was opened in May 2016. At the end of 2017 there were 25 shopping centres in Vilnius (counting those over 5,000 sqm GLA with over 10 tenants) with a total leasable retail area of 453,000 sqm. Currently Vilnius has 0.83 sqm of shopping area per capita.

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INDUSTRIAL MARKET IN VILNIUS

WAREHOUSING PREMISES SECTOR FINALLY WAKES UP

Improving financial performance of companies directly related to the warehousing premises sector, and increasing demand for modern warehousing premises in recent years have determined faster development of this real estate sector. In particular, financially stronger companies continue to implement projects themselves that meet their needs.

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RESIDENTIAL MARKET IN VILNIUS

CONSTRUCTION OF 12% MORE NEW APARTMENTS AND 54% MORE HOUSES

The year 2017 saw moderate growth in apartment prices in all five largest cities of Lithuania (Vilnius, Kaunas, Klaipėda, Siauliai, and Panevezys). However, the assessment of the results in individual cities shows changing trends. If in 2010–2016 Vilnius was the leader in terms of apartment price growth in Lithuania, so in 2017 the biggest percentage rise in prices was recorded in Kaunas. In 2017, apartment prices increased by 4.8% on average in the second largest city in Lithuania and this was the biggest percentage rise in the major cities in Lithuania. It can be said that Vilnius has already experienced its momentum of the fast rise in apartment prices and is now giving way to Kaunas, which has a significant economic growth potential and lower price levels (compared with Vilnius or Klaipėda).

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LAND MARKET IN VILNIUS

LAND MARKET ACTIVITY INCREASES BY OVER 6% IN LITHUANIA IN 2017

In 2017, the activity in the market of larger parcels of land for development was quite weak. There were far fewer publicly announced transactions than there were, for example, in 2016. Parcels of land located in strategically attractive places of the city continue to attract developers, but acquisitions occur only after taking into account all risk factors (general outlook of the commercial and residential property market, location characteristics of the parcel, legal conditions for acquisition of a land plot, etc.).

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land prices for homes in vilnius

LATVIA

OFFICE MARKET IN RIGA

GROWING DEMAND PUSHED VACANCY RATE DOWN IN 2017

The vacancy rate of modern offices in Riga decreased from 7.0% to 5.5% in 2017. The vacancy rate in 2017 for B class offices decreased to 7.0% and decreased to 3.0% for A class offices. Ober-Haus forecasts that vacancy rates will keep falling and could even reach around 4.0-4.5% at some point of 2018.

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RETAIL MARKET IN RIGA

NEW INTERNATIONAL BRANDS IN LATVIA: IKEA, LIDL, PEPCO

For the second year in a row no new shopping centres (counting those over 5,000 sqm of GLA with over 10 tenants) or other retail schemes were opened in Riga in 2017. At the end of 2017, Riga had 649,000 sqm of total leasable space in shopping centres or 1.01 sqm of shopping area per capita. The vacancy rate of shopping centres in Riga at the end of 2017 was around 6%.

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INDUSTRIAL MARKET IN RIGA

MOST PROJECTS WERE POSTPONED TO 2018

In 2018, at least five projects in Riga, (including expansion stages) with a total warehousing area of around 75,000 sqm, are scheduled to be implemented. These projects are being developed by Balt Cargo Solutions, VGP, UA Investor, Elipse BLC and Piche.

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RESIDENTIAL MARKET IN RIGA

WEAK SUPPLY PUSHING PRICES UP

In 2017 prices increased both in old construction buildings as well as in new construction apartments located in residential districts and city centre of Riga. Apartment prices in Riga increased by 6.1% in 2017. Prices for apartments in Soviet-era buildings increased by 6.6% and stood at an average of €744 per sqm at the end of 2017. Prices per sqm in old Soviet–era buildings are usually 30-50% cheaper than prices in new projects in the same locations and mostly range from €600 to €850 per sqm.

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residential prices in city centre in riga latvia
residential rent prices in city centre in riga latvia

LAND MARKET IN RIGA

INCREASING INTEREST FROM LITHUANIAN AND ESTONIAN DEVELOPERS FOR LAND PLOTS

In both the residential and commercial land market, most of the large existing developers like Bonava, YIT, Merks, NCH, Vastint and others do have sufficient stocks of land, which were acquired during pre-crisis times and in the past few years. As the real estate market goes up, many new foreign or smaller local developers are looking for opportunities to buy land for development purposes.

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ESTONIA

OFFICE MARKET IN TALLINN

WITH STABLE RENTS AND VACANCY RATES IN 2017, TALLINN IS PREPARING FOR A DEVELOPMENT BOOM

The most active post-crisis office space developments are taking place in Tallinn due to the demand for higher quality and well-located premises. In total eight new projects were completed in 2017 bringing 41,500 sqm of office space to the market. After completion of these projects, the total area of modern office premises grew by almost 5% to 948,000 sqm of office space at the end of 2017.

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RETAIL MARKET IN TALLINN

COMPETITION AMONG SHOPPING CENTRES KEEPS INCREASING

In 2017, three larger retail projects were opened in Tallinn. In Q2 2017, Bauhaus, a well-known construction and gardening department store, opened a store in a suburb of Tallinn. At the end of 2017, the expansion of the Nautica shopping centre was completed in the city centre and in the suburb of Õismäe, supermarket chain, Maxima XXX, opened a hypermarket.

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INDUSTRIAL MARKET IN TALLINN

OVER 1.2 MILLION SQM OF WAREHOUSING PREMISES IN TALLINN AND IT’S SURROUNDINGS

Six new warehouse projects, with a total warehousing area of 52,300 sqm, were completed in Tallinn and its surroundings in 2017. Most of these projects were developed for own use. These projects increased the total leasable area of modern warehousing premises in Tallinn and Harju County to 1,232,300 sqm.

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RESIDENTIAL MARKET IN TALLINN

NEW APARTMENTS SUPPLY INCREASED BY 50% IN 2017

Reasons behind the increased prices for apartments include: low interest rates, rising income levels, and the purchase of apartments for investment purposes. Another of the reasons behind such purchases is also energy efficiency (lower heating costs). Altogether 40% of the deals took place without a bank loan and overall 10-20% of the apartments were bought as investments.

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LAND MARKET IN TALLINN

LAND MARKET ACTIVITY INCREASED 6% IN HARJU COUNTY

In 2017, the number of transactions involving residential land in Tallinn and Harju County increased by 6%. The average price per sqm increased by almost 2%. In the most popular residential areas in Tallinn the average price of land was €95 per sqm and, near the city, €26 per sqm.

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2018 REAL ESTATE MARKET REPORT

Baltic States Capitals
Vilnius, Riga, Tallinn

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