Due to high inflation and construction costs, some owners have withdrawn their properties from sale, seeing no alternative to capital placement. Due to high and unpredictable construction costs, companies that had planned to build their own buildings are increasingly opting to purchase existing buildings, which they can then adapt to their own needs.
The greatest interest of investors is observed in modern and energy-efficient high-quality buildings, and the demand for such investment objects significantly exceeds the supply. It is expected that in the coming years the Latvian commercial property market will not be able to satisfy the demand of investors for such objects, as relatively few buildings intended for sale have been built in recent years. Better financing conditions are also available for such properties.
Due to the decline in the number of tourists, investors are very cautious about the hotel segment, and several hotel development projects have been suspended indefinitely or retrained for other uses, such as office or apartment development. As usual, the main priority for investors was the purchase of retail space, offices and warehouses. Since the adoption of the new rental law, rental houses have also been requested. This year, Estonian pension funds LHV have purchased five rental houses in the center of Riga.
The largest amount of investments this year has been made in the acquisition of shopping centers. The most significant transactions are the sale of the Damme shopping center in Imanta and the sale of the Rimi supermarket in Stirnu Street, Purvciems.
The market of various development objects is showing high activity, with property developers purchasing land plots and buildings under reconstruction. The most significant transactions are the sale of the shopping center “K-3” in Imanta, the sale of the territory of “Rīgas piensaimnieka” in Valmieras Street, the sale of a 5 ha plot of land in Skaistkalnes Street and the sale of a 13,000 m2 building in Bērzaunes Street, VEF quarter. There is also a high demand for houses to be reconstructed in the city center with the aim of turning them into rental houses or selling apartments separately.
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