MINDAUGAS KULBOKAS

03/07/2018

NT SRITYJE?KIEK PAMATUOTAS OPTIMIZMAS

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• The global economy is churning along at good speed. But asset markets are nervous as the peak of the business cycle is passing in some economies while support from central banks will be gradually withdrawn. This creates a new situation in which the long bull market will fade.

• A similar story holds in Sweden, where the Riksbankwill slowly prepare to exit from the ultra-easy monetary policy, while the housing sector is losing steam, turning a previously strong driving force into a brake on the economy.

THE END OF THE PARTY?

MACROECONOMIC DATA

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OUTLOOK FOR THE NORTHERN EUROPEAN

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OFFICE MARKET OF THE BALTICS

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Towards the end of 2017, the largestoffice complex in Riga, Place Eleven,entered the market. The propertyhas a total area of 24,000 sqmdivided over 14 storeys. The totalamount of investment exceeds EUR20 million. Prime office propertiesare currently yielding 6.8 per centwith an average price of EUR 10–15/sqm for A-class offices.

In the past few years, the Vilniusarea has been the prime market foroffice properties in Lithuania. TheKaunas office market was almostnon-existent until 2017, when 11new office properties with a totalarea of 44,000 sqm were inaugurated.Moreover, 17 new propertieswith a total area of 99,000 sqm arecoming to the market in the nearfuture. The city’s office marketis changing remarkably and isexpected to be classified as A-classpremises in 2018–2019.

RETAIL MARKET OF THE BALTICS

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In December 2017, an agreementfor the co-financing of the constructionof the Akropolis shoppingcentre was signed, worth EUR106.5 million. This is the largesttransaction in Latvia and in theBaltics during 2017. Total project investmentis EUR 177 million and thecentre will be the first newly constructedmultifunctional shoppingand entertainment centre in Rigasince 2009. The centre will havea total area of 100,000 sqm, with10,000 sqm intended for offices.

The construction of two large shoppingcenters, T1 and Porto Franco,is currently under development inTallinn. Due to delays in the constructionphase, the inauguration isexpected to take place Q4 2018 for T1and in 2019 for Porto Franco.

LOGISTICS MARKET OF THE BALTICS

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Lithuania has six Free EconomicZones operating in the regionalcities of the country. In 2017, theseFEZ’s attracted significant foreigninvestors such as Continental,Hella, Devold, IMG and Dovista.Over the next few years, theseinternational companies areplanning to invest more than EUR100 million, creating thousands ofnew jobs in the regional cities ofLithuania.

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