Recently, more and more new office space is being developed in Riga, and as the number of objects to be developed increases, more lease agreements are becoming available, according to the Riga office market report for the third quarter of 2021 of the international real estate consulting company Newsec.
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The activity of the office rental market in the third quarter of this year was maintained by small and medium-sized transactions, as well as one large preliminary lease agreement – “SEB Bank “concluded a transaction for 11,000 square meters of office space in the business center” Gustavs “to be developed by Galio Group, which is planned to be commissioned in 2023. In total, more than 24,000 square meters of office space was leased in Riga in the third quarter.
Dace Priede, Newsec’s office rental expert in Latvia, explains that as the impact of the pandemic diminishes, the rental office market has become more active. Companies in Riga currently have two possible options – choose one of the existing vacant areas or wait for new projects and sign preliminary lease agreements. Newsec analysts have noted that large companies that can wait and plan to relocate in advance are most interested in new, modern, sustainable projects, with many looking to relocate from older office buildings.
Priede continues that in 2022, more than 40,000 square meters of new office space will be offered to the Riga office market. Some of them will be leased within the framework of preliminary lease agreements, which will expand the offer of vacant premises in existing projects. New, high-quality and sustainable projects will be attractive to companies that are ripe to relocate once they enter the market.
However, while the supply of new office space in the Riga office market has not yet increased, the share of vacant premises is gradually decreasing – during the quarter it dropped from 13.2% to 12.5%. Recently, the demand for both Class A and Class B offices has remained at a similar level, and prices have been stable – the rent for a Class A office per square meter is about 14-18 euros, but for Class B – nine to 16 euros.
According to the report, in the third quarter of 2021, Galio Group entered into a transaction with “Merks“One of the three business centers in the project will be leased to SEB banka. Like many other new business centers, the buildings in the complex are being built to BREEAM Excellent certification and will also offer entertainment and leisure facilities. to spend time.
Active development continues in the Skanstes Street area as well – real estate developer Pillar Capital has started construction of an office building “New Hanza”. This Class A facility, with a leasable area of more than 12,000 square meters, is expected to be environmentally neutral. Kapitel, one of the largest real estate companies in the Baltics, has also signed an agreement with the construction company Merks on the development of the Elemental Skanste business center. It is planned to be completed in the first quarter of 2023. This business center will be built in accordance with the requirements of the “BREEAM Excellent” certificate and will offer more than 20,000 square meters of Class A office space to the market.
“Thanks to the active development of offices, tenants in the city have recently had more opportunities – they can choose more modern premises and agree on more favorable rental conditions. At the same time, changing tenants’ needs are becoming clearer – companies are paying more attention to a safer and healthier environment. meeting rooms, lounges, quality catering and other services, “says Priede.
Newsec is a full-service real estate company in Northern Europe offering a full range of property management and consulting services to property owners, investors and tenants. Founded in 1994, Newsec is now a partner company with approximately 2,000 employees in seven markets. Newsec manages around € 65 billion and signs leases of around 1.6 million square meters each year. The transactions managed by Newsec amount to 7.6 billion euros and the total value of real estate appraisal services is 188 billion euros.
Newsec is a partner of BNP Paribas Real Estate Alliance.
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