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LITHUANIA

OFFICE MARKET IN VILNIUS

HIGH OFFICE ABSORPTION LEADS TO FURTHER SECTOR EXPANSION

After a significant increase in new office supply in 2016–2017, the Vilnius market for modern offices continued to grow significantly in 2018. In total six new projects were completed in 2018 bringing 43,000 sqm of office space to market. After completion of these projects, the total area of usable modern office space (A and B class) grew by almost 7% to 718,300 sqm at the end of 2018 (see all projects on OHMAP). Currently, Vilnius has 1.30 sqm of usable office space per capita. By floor space, A class constitutes 39.8% of the total modern office premises in Vilnius, and B class – 60.2%.

RETAIL MARKET IN VILNIUS

FOCUS ON SMALLER SCALE RETAIL SCHEMES AND DIY STORES

The total retail space in larger traditional shopping centres in Lithuania at the end of 2018 amounted to 1.1 million sqm or 0.39 sqm of shopping area per capita. Altogether 41% of shopping space of traditional shopping centres are based in Vilnius. The retail space in such shopping centres in the past five years has increased by over 9% in Lithuania but the population of the country in the same period shrank by 5%. Statistically, the retail space per capita indicator has increased by around 15% in the past five years.

INDUSTRIAL MARKET IN VILNIUS

TOTAL WAREHOUSING STOCK INCREASED BY 11%

A strong performance by transport and logistics companies continues to support buoyancy in the warehousing sector. Although the overall number of speculative projects is not growing rapidly, there is a certain level of activity in regards to own-use projects. There is a demand for modern premises for existing and expanding businesses.

RESIDENTIAL MARKET IN VILNIUS

HIGH HOUSING DEMAND CONVERTED TO THE RECORD SUPPLY

Although in 2018 an increase in apartment prices was recorded in all five major cities of Lithuania (Vilnius, Kaunas, Klaipeda, Siauliai, and Panevezys), the rate of increase varied in individual cities. The smallest relative increase in apartment prices was recorded in Vilnius and was determined by a high reference point, that is, a big price gap between Vilnius and other cities in the country. Meanwhile in smaller cities a higher increase in prices (from 4% to 11%) of apartments was recorded and it is likely that similar trends will remain in the near future.

LAND MARKET IN VILNIUS

ALL TIME HIGH ACTIVITY IN VILNIUS LAND MARKET

Despite an increase in the interest in the parcels of land in the central part of the city, there was hardly any noticeable increase in the prices of such parcels, but the negotiating positions of the owners of such sites remained really strong throughout 2018. Asking prices for plots in the central part of the city or other prestigious districts suitable for residential and commercial development (with detail plans or construction permit) are now €400–€1,500 per sqm of land, or roughly €300–€1,000 per gross buildable square metre of residential or commercial space.

LATVIA

OFFICE MARKET IN RIGA

AS TENANTS FACE SHORTAGE, DEVELOPERS HAVE FINALLY STARTED BUILDING

The completion of three new office projects in 2018 added 24,900 sqm of office space to the market in Riga. Total office area at the end of 2018 stood at 793,400 sqm.

In the course of 2019–2020, eleven new office buildings are scheduled to come to market in Riga, with a total office space of up to 140,000 sqm.

However, one of the new Skanste CBD projects, New Hanza City an area of 24 ha for office and residential development, was put on hold during 2018, as their main shareholders were connected with ABLV bank, which ceased trading.

RETAIL MARKET IN RIGA

AKROPOLE WILL ADD SUFFICIENT RETAIL
SPACE TO THE MARKET IN 2019

For the fourth year in a row (except for the expansion of existing shopping centres) no new traditional shopping centres (counting those over 5,000 sqm of GLA with over 10 tenants) were opened in Riga in 2018. At the end of 2018, Riga had 649,000 sqm of total leasable space in shopping centres or 1.02 sqm of shopping area per capita. The vacancy rate of shopping centres in Riga at the end of 2018 was around 4%.

INDUSTRIAL MARKET IN RIGA

ALMOST 60,000 SQM OF NEW WAREHOUSING SPACE WAS COMPLETED IN 2018

Three projects with total warehousing area of 59,800 sqm were completed in Riga in 2018. The total amount of modern warehousing space in Riga and its immediate surroundings reached 708,800 sqm by the end of 2018.

In 2019, at least three major projects in Riga and its vicinity (within 20 km) – and including expansion stages – with total warehousing area of around 70,000 sqm, are scheduled to be implemented. These projects are being developed by VGP, Piche, and Sirin Development.

RESIDENTIAL MARKET IN RIGA

NUMBER OF COMPLETED APARTMENTS INCREASED BY 65%

Apartment prices in Riga increased by 2.5% in 2018, after an increase of 6.1% in 2017. In 2018, prices increased both in old construction buildings as well as in new construction apartments located in residential districts and Riga city centre.

Prices for apartments in Soviet-era buildings increased by 4.6% and stood at an average of €782 per sqm at the end of 2018. Prices per sqm in old Soviet-era buildings are usually 30–50% cheaper than prices in new projects in the same locations.

LAND MARKET IN RIGA

RESIDENTIAL AND COMMERCIAL PROPERTY DEVELOPERS WERE ACTIVE IN LAND PURCHASE

Prices for plots for residential development (multi-apartment buildings) are generally in the range of €50–€300 per sqm in Riga neighbourhoods and for mixed commercial and residential development €300–€1,000 per sqm in Riga central areas. Commercial land near highways €15–€20 per sqm, commercial land in Riga neighbourhoods €20–€70 per sqm.

ESTONIA

OFFICE MARKET IN TALLINN

Demand and Supply Growing

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 11 new projects were completed in 2018 bringing almost 80,000 sqm of office space to the market. After completion of these projects, the total area of modern office premises grew by almost 9% to 1,030,000 sqm at the end of 2018.

RETAIL MARKET IN TALLINN

Market Becoming Saturated

In 2018, one large retail project was opened in Tallinn. In Q4 2018, Pro Kapital, a well-known real estate developer, opened the shopping centre, T1 Mall of Tallinn. It has 55,000 sqm of leasable space.

At the end of 2018, there were 42 traditional shopping centres (including those with over 5,000 sqm of GLA and over 10 tenants) with a total leasable area of 665,300 sqm. Tallinn currently has 1.54 sqm of shopping centre per capita.

INDUSTRIAL MARKET IN TALLINN

Demand for stock-office type of properties is increasing

Six new warehouse projects, with a total warehousing area of 86,300 sqm, were completed in Tallinn and its surroundings in 2018. 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 1,320,000 sqm.

As these new developments took place exclusively for own needs, the warehousing sector has been fairly balanced in recent years when compared to the office and retail sectors.

RESIDENTIAL MARKET IN TALLINN

Balanced Apartment Market

The average sqm price for an apartment in Tallinn increased by 3.5% in 2018 reaching €1,843 per sqm in December 2018.

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.

LAND MARKET IN TALLINN

Small, but stable growth

In 2018, the number of transactions involving residential land in Tallinn and Harju County increased by 2%. The average price per sqm increased by almost 9%.

In the most popular residential areas in Tallinn the average price of land was €100 per sqm and, near the city, €30-€40 per sqm.

The increase in prices was biggest in Rae, Saku, Kiili, Harku and Saue Parish, which are located in the immediate vicinity of the city of Tallinn and are increasingly popular.

2019 REAL ESTATE MARKET REPORT

Baltic States Capitals
Vilnius, Riga, Tallinn

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