QUARTER 2 2019 | Baltic States 1 Research & Forecast Report | Colliers International

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QUARTER 2 201 2 QUARTER SNAPSHOT PROPERTY BALTIC STATES QUARTER 2 2019 | Baltic States 2

Research & Forecast Report | Colliers International INVESTMENT MARKET

remained stable, remained though slight Primeacquisitions. of half yields responsiblesegment development for with million the officeEUR 40 volumetransaction amounting to continues with active to also be total The process. development market the insolvencythrough acquired was bynowHotel, Mogotel, operated while RIJA Estonian operator), VEF (anmanaged byfurther Hestia Estonian to sold investors and will be deals t Additionally, (5,900LC DHL sqm). the Latvia by purchasing acquisitions in Lumi Capital and continued EUR6.15 Hotelfor Elizabete million Radisson nextbuilding the to Blu Linstow.Linstow historic a acquired Baltic Horizon to million Fund by sqm) SC (GLA 20,000 by theGalerija sale driven of Centrs exceeded EUR100Latvia million, 2019, Q2 In investment volume in Affairs Economic and former of acquisition the Ministry of in Pärnu andMaksimarket the of theAudru sale included million).2.8 transaction (average was size EUR and volume) smaller Estonian total of half investment (with segment industrial more than million, driven EURmostly 100 by the Estonia amounted in volume to ca total 1HY In known 2019, investment Source: Colliers International Source: Colliers Q States, Baltic the in Figures Key Investment Industrial Retail Office Yields Prime -

Hotel Radi un was Draugi

Notable Notable in Q2deals 2019 here were two hotel

- Estonia 7.75% 6.4% 6.25% scale deals

for EUR 75

Latvia 7.75% 6.5% 6.45% are putting on pressure are y harder financingalthough conditions rather Q2remained stable in 2019, year. of the beginning Prime yield by closed deal Corumatlarge the volume invested duemostly to one total in capital was behind 55% of 45% of acquisi ca was fordomestic responsible spend In KEK. Town 1HY by Harju 2019, Communications building Oldin remained Q2 stable remained in 201 yieldsmarket,investment prime vibrant. As a more a result of tra theof rest and the islikely year be to activityinvestment temporary,only is to expectthatlowergrounds new propertiesof commercial give negotiations and an attractive supply Looking ahead, ongoingmillion. Capital for Klaipeda by East Furniture and InteriorDeco Centre in auction the NTand of sale Valdos deals in2019 includedlargest Q2 the The EUR170 million). exceeded volume investment total Q1 in 2019 (in scalesmaller deals comparison, million, EURm 50 volume almost stoodinvestment at Total Lithuania. accumulated activity investment slowdown in in to Q2 2019, start 2019 saw a into transferred year which an active particularlyFollowing a last buoyant might expesegment be in theupward retail movement

2

201 tions,while foreign ostly formed by Lithuania 7.75% 6.5% 5.8% 9

cted

ields. 9. .

EUR 2.5

nquil nquil

QUARTER 2 2019 | Baltic States 3 Research & Forecast Report | Colliers International

- B1 B1

wood. om

16.5 - working working 13.5 - -

7% 4% entum gained by by gained entum - - VILNIUS 14.7 9.0 6 3

. tech companies, lawyers companies, lawyers tech

-

speculative office marketvacancy rate -

16.0 13.5 working spaces is likely to spaces likely is working - - - 3% 7% - - rates remained stable, while no no rates stable, while remained have insignificant changes vacancy beenobserved Kapitel announced plans to start start toKapitel plans announced construction on work Elemental (GLA 20,500 complex Skanste office Excellentsqm; certified) BREEAM thissummer, Eastninewhile its Alojasexpand announced to plans WELL a with new office complex certified ‘The building Pine’ office 15,800made(GLA fr sqm) demand low Due rent to relatively IT andIT high continually among areand retailers take up tothe contributors strongest care health by volume, followed providers. mom The co the IWC continue, announcing with opening co Spaces of in3,100 sqm) premises (more than Fahle Park. Rent stable, largely rates remained continued slightly vacancy while to Class tightenand Class in A 6%).buildings (below RIGA 14.0 10.0 2 6 EUR/sqm/month;*

16.8 -

14.0 - 6% 6% - - TALLINN 13.5 9.5 5 5

ucted Telegraph office ucted Telegraph

working space with 230 with space working - 2019 saw completion of the 2019 saw

n the Veerenni area. is n the Demand Veerenni B1 Class Rents B1 Class % Vacancy*, A % B1 Vacancy*, CLASS Rents A Class Source: ColliersSource: International Key OfficeKey Figures in the Baltic States, Q2 2019 office premises (9,000 sqm) in office (9,000 premises Akropole B1 premises Class SC and in reconstr the is sqm half buildingof (3,000 which WorkLand occupied 160 with by working Old places) in Town. secondAdditionally, a Teikums coTeodors Jaunā working in places opened Teika. The Riga office market continues to Riga to continues The market office projects market, deliver the to new due to althoughslower than expected Q2 constructiona process. longer B1 the Class 2019saw of opening construction work on the R6 project project construction on work R6 the in Elektrilevi and Quarter Rotermann i HQ driven and largely relocation by tenants. expansion existing of Development in the Tallinn office inDevelopment office Tallinn the a with totalactive market remains 122,350 sqm area (15 approx. of June in projects) under construction 2019. Q2 in the Töökoja3 building office (BtS) and centre city Veerenni the in area in (BtS) the 9 building Sadama office start Tallinn the of and area harbour

OFFICE MARKET OFFICE QUARTER 2 2019 | Baltic States 4

Research & Forecast Report | Colliers International

Vacancy Yield Office Office RETAIL International Colliers Source Stable Decreasing Increasing Trends Construction Rent

Demand Supply whole S7 BC (stage IV). BC(stage whole S7 sqm 13,000 by was concluded The quarter. largest lease agreement at thethe construction end of rema161,700 sqm propertiesoffice with GLA total of anchorA pipeline tenants. as 13 of (flexible workspace Spaces concept) CBDwith SorainenVilnius and BC(GLA 6,370 of Square sqm) in the Liverecorded completion of the2019, Q2Vilnius In office market store Estonia due toin store open is in Estonia.Deichmann’s across first planning new further and openings Lasnamäe Centrumin store in May expandopening aggressively, newa household and to chain, continues PEP restaurant) the Vapiano in centre. bowling,trampoline large centre, with O’LearysCinema sports bar, entertainment amenities (Apollo more and catering include of sqm leasable 13,200 space to Centre byextended Ülemiste ca opening sawQ2an 2019 the of Source: Colliers International Source: Colliers * Key EUR/sqm/month Vacancyin SC Rents* HighPrime Street Prime Rents*SC CO, a Polish low CO, Polish a Retail Retail

; SC; ‒ Figures in the Baltic States, Q2 2019 Q2 States, Baltic the in Figures

a a pre –

shopping centre shopping Danske for Bank ined under under ined - lease of the 1 30 24 TALLINN - . cost clothing clothing cost 8

- - % 48 48

1 35 35 RIGA . 8 unchanged rentremained while rates segment, levelvacancy properties newerincreased office the relocation Tenant to fromolder Talent VilniusGarden and for Street. Quadrumfor signing BC(stage III) with Vilnius, expand in WorkLand The co Incor BC Dana Stadium and West (2,300 atMcKesson sqm) Business were by New opened SSCs especially smaller smaller especially ones. retailers’ affecting profitability, redistributionfootfall in of and resulting rivalry, industry intensified CentreÜlemiste of sharply T1Tallinn Mallthe and extension of shopping as theof opening centre of is expectedfurther rates in all type Downward 2020. on rent pressure at autumn Porto Franco Estonia in indepartment sqm) first (3,600 store Cloppenburg & will openPeek its Porto announced2019, Franco that Nautica Centre.GLA in Mayof In mid - - % 5 55 0

- August2019, co porated (1,270porated at sqm) Alfa BC. - working working tomarket continues .

in A the Class 1. 25 25 VILNIUS 4 - - vering 380 sqm % 60 50

s

QUARTER 2 2019 | Baltic States 5 Research & Forecast Report | Colliers International

5.0 5.0 - o new new o

5.0 - % 5 . VILNIUS 3.8 0

e Baltic States opened opened Statese Baltic ontinue to initiate and/or initiate toontinue commerce services. commerce -

tuate within the existing range. within existing the tuate 7

sales through Barbora, Rimi throughsales Barbora, 4. - - % parish, and completion of several completionof parish, and tee Kesk Stock Offices BP, (Priisle 4, 21). 10a,Liimi 19, Härgmäe Artelli Although Stock for Office demand continues several space soften, to c developers the projectsmostlyplan within new to continue city limits.rates Rent 3.8 fluctuate between largely standing atEUR/sqm, vacancy with 4.0% Q2 2019. end at Lithuania opened at Ozas shopping atLithuania opened Ozas selection centre. 2019, of In Q2 vacantVilnius prime in premises tight, shopping centres remained to rent continuedwhile rates fluc e are to announced planning that they e expand Vilnius remained The market retail constructionseeing calm Q2 2019, in theof Nevertheless, Outlet. Vilnius t interestingmarket remains homeentrants. garden and Estonian the goods Hortes announced retailer at sqmstore 13,600opening a of Business VNO Retail (stage Park & shoppingII). centres Existing mix continuedimprove their tenant to London ‒ Malone theJo first boutiquein th while centre, at shopping Panorama in pharmacy the first Apotheca 5 0 . RIGA 3. 3

h,

in Riga in in Riga in

5.0 - %

0 . TALLINN 3.9 4 shopping centres shopping Figures in the Baltic States,Q2 2019 with a total area of total area a with

g the success of Maxima successof Maxima g the month Industrial Prime Rents* Vacancy *EUR/sqm/ ColliersSource: International Key Key construction of the new Eugestanew LCconstructionthe of parisLCand in Rae ACE Logistics andthe Tech Repston Module Jõelähtmein production facilities The industrial The segment remains its and active inreasonably Tallinn new suburbsin of terms developments 86,000approx. sqm under by driven construction June in 2019, Followin 6th Lemon Gym in Akropole follows follows 6th in Gym Lemon Akropole the globalincreasing in trends shopping inentertainment area centres of 44% (ca gyms).in have already Riga A sqm) has (3,500farmer's market Retailopened Park, Imanta in premises occupyingformer Prisma of as the two Rimi Maxima, and already players,strongest market are toshopping the centre.locatednext April considerableattracted 2019 million reaching 1interest,already since daysvisitorsfirst the40 in While of existing opening.the few inSCs experienced decrease theon significant effectfootfall,no so observed been market hasoverall has far. vacancy though Even the 2% below increased, still is it Apollo first level.the of opening The the cinema,first the O'Learys and The opening The Akropole of Supply Demand

Rent Construction Trends Decreasing Increasing Stable Colliers International

: Yield Retail Retail INDUSTRIAL Source

Vacancy Quarter | Region 6

Research & Forecast Report | Colliers International Vacancy Yield • Industrial Industrial

ECONOMY International Colliers Source vehicles and vehicles motorcycles; retail repair trade; and motor of (+13.4%), construction wholesale engaged enterprises in was value observed added the in 201 Q1 in Lithuaniagrowth was in y 4.0% The GDP (+5.0%). manufacturing and (+7.6%) communication information and(+5.6%), (by y 7.4% construction Latvia (driven byin growth in GDP has 2018, increased by 3.0% to asQ1 compared 2019, Q1 and andscientific technical activities professional, and communication; also growthfrom information came toSignificant contributions the the most driven by manufacturing. tocompared Q12018, 2019 Q1 GDP of Statistics Estonia, to According wholesale trade. and retail Construction Estonia 4.5%Estonia increased in Increasing Stable Decreasing Rent Trends 9. The fastest9. growth in

Demand Supply

- o - y),trade

- In In o - y • •

In Q2 2019, the2019, Q2Riga industrialIn closer to been there Riga,has closer some newertenants to moving complexes over million years.EUR2 45 to Due a leasable Aof sqm Class industrial develop 80,000 to planning around Rumbula.Sirin Development in is well Sirin as as Ādaži Logistics Park facilityOrkla production for Latvija in workconstruction on a of new Q2 2019 nextsaw thequarter). start the part second willBepco; Printful, BeautyforGroup, and by Latvia MGI(occupied Elko Tech, ofParks I and Lidostas stage A; (Class fullyVGP leased) project ofthe part of second opening the was active,themarket seeing nd warehouse nd space by investing – percentagein points, 0.3 Lithuania rate increasedunemployment by E in quarter, Lithuani lowest inthe Latvia (6.9%), recorded of 15 aged persons rate the 2019, highest unemployment offices, Q1statistical States' in the data to theAccording Balticof from Q42019 2.3% in 2.1% decreasedLithuania to in Q1 from Q4in2019 2.9% in 2018; declined Q1 to slightly 2.8% in in2018; Q4Latviawithin 3.7% stood at Estonia 2.3% compared 2019, Q1 in (HICP): In inflation (5.0%). and communication (5.5%) activities and foodserviceaccommodation transportation and storage;

increased increased by 0.5 percentage – a it at it Overa stood 6.5%. a

in Estoniawhile (4.7%), in stonia, the stonia, the

and in 2018 formation formation – 74 was follow

.

• •

below the 1% level.Inrentbelow the 2019, Q2 properties existing shrank further demand, vacancystrong meet as in warehouse space is expected to New basis. speculative modern being a sqm developed54,800 is on end ofo the the quarter, sqm) 71,700 under construction at new (totalwith GBA three properties was development the market active unchanged.remained Nevertheless, Vilnius warehouse2019, Q2 In stock rent rates vacancy, are increasing. In Rigaroad. Riga ring on located objects the rentrates in decrease in thesome of vacancy in slightincrease and a fluctua to warehouse for rates space continued amounted to EUR 1,263. to amounted by 9.4%in Lithuaniaincreased and gross monthlyaverage earnings Q1 2018, against Q1 2019, – risen have 2019 by in 7.8% Latvia and wages gross in Q1 salaries Compared to2018, Q1 7.9%. gross monthly earnings grew by Q1 to th compared 2018, Estonia,and in EUR 1,341 and wages gross weresalaries the2019, Q1average In monthly toaccording Eurostat y (+7.1% wasinStates registered Lithuania among the EUMember trade increases in retail total annual One Latvia. the 3.7% in highes of Estonia and bybyrose in 5.5% the2019, Q1retailIn salesindex unchanged while Latvia, remained points, in it

from EUR 961 EUR1,036.from EUR961 to In te within range.te the same - o - , where, there is no . y in2019), Q1

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FOR MORE INFORMATION

Maksim Golovko Toms Andersons Diana Lebedenko Research & Forecasting | Estonia Research & Forecasting | Latvia Research & Forecasting | Lithuania [email protected] [email protected] [email protected]

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