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

9

QUARTER 2 201 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 responsibsegment development with million the officeEUR 40 transaction volume amounting to continues with active to also be total The development process. market the insolvencythrough acquired operatedwas by Mogotel, now Hotel, Estonian o (anmanaged by Hestia further Estonian to besold investors and will deals there werehotel Additionally, two (5,900LC DHL sqm). the Latvia by purchasing acquisitions in Lumi Capital and continued Hotel Elizabete Radissonto next building the Blu Linstow acquired Linstow. historic a Baltic Horizon to million Fund by for sqm) EURSC (GLA 20,000 75 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 was(average size EUR and volume) smaller Estonian total of half investment (with segment industrial more than million, driven EURmostly the 100 by Estonia amounted in volume to ca total 2019, investment 1HY known In Source: Colliers International Source: Colliers 2019 Q2 States, Baltic the in Figures Key Investment Industrial Retail Office Yields Prime -

Hotel Radi un was Draugi

perator), while RIJA perator), VEF Notable Notable in Q2deals 2019

for EUR6.15 for million - Estonia 7.75% 6.4% 6.25% scale deals

le for Latvia 7.75% 6.5% 6.45% are putting on pressure are y harder financingalthough conditions rather Q2remained stable in 2019, of the beginning Prime year. yield by closed Corumatdeal large the volume invested duemostly to one total in capital was behind 55% of 45% of acquisi ca was fordomestic responsible spend by HarjuIn KEK. 2019, Town 1HY Communications building Oldin remained Q2 stable remained in 2019. market,investment prime yields As a vibrant. more a result of tranquil theof rest and the islikely year to be activity investment temporary,is only tot expect grounds new propertiesof commercial give negotiations and an attractive supply Looking ahead, ongoingmillion. Capital East forKlaipeda by EUR 2.5 Furniture and InteriorDeco Centre in auction the NT Valdos and of sale deals largest EUR170 million). exceeded The volume investment Q1 total in 2019 (in scalesmaller deals comparison, million, formedEURmostly 50 by almost stoodvolume investment at Total Lithuania. accumulated inactivity investment in slowdown to Q2 2019, start 20 which into transferred year an active particularly Following a buoyantlast might expected.segment be in theupward movement retail

in2019 included Q2 the tions,while foreign Lithuania 7.75% 6.5% 5.8% hatlower 19 saw a

ields.

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

- m wood.m

vacancy rate

S

16.5 100 sqm) in sqm) 100 - working working 13.5 - -

7% 4% - - VILNIU 14.7 9.0 6 3

tech companies, lawyers companies, lawyers tech

-

speculative office market -

16.0 13.5 working spaces is likely to spaces likely is working - - - onstruction work on Elemental on work onstruction Elemental 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 c 20,500complex Skanste (GLA office sqm; BREEAMcertified) Excellent thissummer, while Eastnine Alojasits expandannounced to plans aoffice WELL with new complex certified ‘The building Pine’ office 15,800made(GLA fro sqm) Duelow rent to demand relatively IT high and continually among areand retailers take up tothe contributors strongest care healthvolume,by followed by gained providers. momentum The co thecontinue, IWC announcing with opening co Spaces of 3, premises (more than Fahle Park. Rent stable, largely rates remained slightly whilecontinuedvacancy to Classtightenand Class B1 in A 6%).buildings (below RIGA 14.0 10.0 2 6 EUR/sqm/month;* (BtS) in (BtS)

16.8 -

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

ucted Telegraph office Telegraph ucted

working space with 230 with space working -

B1 Class Rents B1 Class % Vacancy*, A % B1 Vacancy*, CLASS Rents A Class Source: ColliersSource: International Key OfficeKey Figures the in 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 occupied 160 WorkLand with by working Old places) in Town. secondTeikums Additionally, a coTeodors working Jaunā in places opened Teika. The Riga office market continues to to continues The market office Riga market, deliver the projects to new due to althoughslower than expected Q2 constructiona process. longer B1 2019Class saw of opening the construction work on the R6 project project construction on work R6 the in Elektrilevi and Quarter Rotermann inarea. is HQ the Demand Veerenni largely and relocation by driven tenants. expansion existing of Development inDevelopment Tall the a with totalactive market remains sqm area 122,350 approx. (15 of June in projects) under construction of the 2019. 2019 completion saw Q2 in the Töökoja3 building office (BtS) andcentre cityVeerenni the in area 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 IV). BC(stage whole sqm 13,000 concluded by was The quarter. largest lease agreement at thethe construction end of rema161,700 sqm propertiestotaloffice with GLA of anchorA pipeline tenants. as 13 of (flexible workspace Spaces concept) CBDwith Sorainen andVilnius 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 aggressively,expand opening new a household and to chain, continues PEP restaurant) the Vapiano in centre. bowling,trampoline large centre, O’Learys with Cinema sports bar, entertainment amenities (Apollo more and catering include of sqm leasable 13,200 space to Centre by Ülemiste extended ca the opening saw Q2an 2019 of Source: Colliers International Source: Colliers SC *EUR/sqm/month; Key Vacancyin SC Rents* HighPrime Street Prime Rents*SC CO, a Polish low CO, Polish a Retail Retail

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

a a pre –

shopping centre Danske for Bank ined under under ined - lease of the 1.8% 30 24 TALLINN - cost clothing cost clothing

- - 48 48

1.8% 35 35 RIGA unchanged. rentremained while rates segment, levelvacancy office properties newer increased the relocation toTenant fromolder Talent VilniusGarden and for Street. Quadrumfor signing BC(stage III) inwith Vilnius, WorkLandexpand co The Incor BC West Dana Stadium and (2,300 atMcKesson sqm) Business opened by were New SSCs especially smaller smaller especially ones. retailers’ affecting profitability, redistributionfootfall in of and resulting rivalry, industry intensified CentreÜlemiste of sharply of T1Tallinn and Mall extension the shopping as theof opening centre of is expectedfurther rates in all type Downward 2020. pressure on rent at autumn Porto Franco Estonia in indepartment sqm) first (3,600 store Cloppenburg & will openPeek its Porto announced2019, Franco that Nautica Centre.GLA in of In May mid - - 50 55

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

in A the Class 1.4% 25 25 VILNIUS - - vering 380 sqm 380 sqm vering 60 50

s

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

at

5.0 5.0 - o new o

Härgmäe 21). 21). Härgmäe

5.0 - VILNIUS 3.8 0.5%

e Baltic States opened opened Statese Baltic commerce services. commerce -

tuate within the existing range. within existing the tuate

sales through Barbora, Rimi throughsales Barbora, 4.7 - - parish, and completion of several completionof parish, and tee Kesk Stock Offices BP, (Priisle 4, 10a,Liimi 19, Artelli Although Stock for Office demand continuesseveral space soften, to and/or initiate continuedevelopers to themostlyplan within new projects to continue city limits.rates Rent 3.8 fluctuate between largely standing vacancyEUR/sqm, 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 towhile continued rates rent fluc e to areannounced planning that they expand e remainedThe market Vilnius 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 whilecentre, at shopping Panorama in pharmacythe first Apotheca RIGA 3.5 3.0%

in Riga in in Riga in

5.0 -

TALLINN 3.9 4.0% shopping centres shopping in June 2019, driven by by driven Junein 2019,

g the success of Maxima successof g the Prime Rents* Vacancy *EUR/sqm/month ColliersSource: International Key IndustrialKey Figures in the Baltic States,Q2 2019 construction of the new LCconstructionthe Eugesta of parish, LCand in Rae ACE Logistics theand Module Tech Repston Jõelähtmein production facilities The industrial segment remains The segment industrial remains its and activeinreasonably Tallinn newsuburbsin of terms of totaldevelopments area a with approx. sqm under 86,000 construction Followin 6th Lemon Gym in Akropole follows6th 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 ofMaxima, as the two Rimi and already players,strongest market are shopping centre.located next to the April considerableattracted 2019 million reaching 1interest,already since daysvisitorsfirst the40 in of existing opening.Whilethe few inSCs experienceddecrease theon significant effectfootfall,no so been observedmarket hasoverall has far. vacancy though Even 2% below the increased, still is it Apollo first level.the of opening The the cinema,first the O'Learys and The Akropole of opening 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 2019. fastest Q1 in The growth in grow GDP (+5.0%). manufacturing The and (+7.6%) communication information and(+5.6%), (byy 7.4% construction Latvia (driven byin growth in GDP has 3.0% 2018, increased by to asQ1 compared 2019, Q1 wholesale trade. and retail and In andscientific technical ac professional, and communication; also growth came from information toSignificant contributions the the most driven by manufacturing. tocompared Q12018, 2019 Q1 4.5%Estonia GDP increased of in Statistics Estonia, to According th in Lithuaniath was 4.0% y Construction Increasing Stable Decreasing Rent Trends

Demand Supply

- o - tivities y), trade

- o - y • •

In Q2 2019, the2019, Q2Riga industrialIn closer to been there Riga,has closer some newercomplexestenants to moving over million years.EUR2 45 to Due warehouse and space by investing sqm develop 80,000 to planning around Rumbula.Sirin Development in is well Sirin as as Ādaži Logistics Park facilityOrkla production for Latvija in work construction on a of new Q2 2019 the quarter). next saw start the part second willBepco; follow Printful, BeautyforGroup, by Latvia MGI (occupied Tech, Elko ofParks I and Lidostas stage A; (Class fully VGP leased) project ofthe part of second opening the was active,the market seeing – percentagein points, 0.3 Lithuania rate increasedunemployment by Estonia, in quarter, the 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 2018. decreasedLithuania to from Q4in2019 2.9% in 2018; declined Q1 to slightly 2.8% in 3.7%in2018; Q4Latviawith in stood at Estonia 2.3% compared 2019, Q1 in (HICP): In inflation (5.0%). and communication and (5.5%) informationactivities a accommodation transportation and storage;

increased increased by 0.5 percentage

of leasable Aof Class industrial – a it it a st

in Estoniawhile (4.7%), in ood atOver 6.5%. a nd foodservice

2.1% in Q1

– and 74 was

• •

below the 1%In level.rent below 2019, Q2 properties existing shrank further demand, strong meet as vacancy in warehouse space is expected to New basis. speculative modern being a sqm developed54,800 on is end ofof the the quarter, which sqm) 71,700 under construc three new (total properties with GBA was development the market active unchanged.remained Nevertheless, Vilnius warehouse2019, Q2 In stock rent rates vacancy, are increasing. In where Riga, road. there is no locat objects rentrates in decrease in thesome of in vacancy slightincrease and a to fluctuate within range. fluctuate theto same war for rates amounted to EUR 1,263. to amounted i gross monthly average earnings Q1 2018, against Q1 2019, – risen have 2019 by 7.8% in Latvia and wages gross in Q1 salaries Compared to2018, Q1 7.9%. gross monthly earnings grew by Q1 to thecompared 2018, average Est in EUR 1,341 and wages gross weresalaries the2019, Q1average In monthly toaccording Eurostat. y (+7.1% registered was inStates Lithuania among the EUMember trade increases in retail total annual One Latvia. the 3.7% in highest of 5.5% Estonia and by by rose in the2019, Q1retailIn salesindex unchanged. while Latvia, remained points, in it ncreased by 9.4%in ncreased Lithuania and

from EUR 961 EUR1,036.from EUR961 to In - o ed Riga ring on the ehouse space continued - y in2019), Q1 y

onia, and onia,

tion at

FOR MORE INFORMATION

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