Office market overview, 1st half of 2023

Download Office market overview, 1st half of 2023

Current events:

• Several new office buildings were commissioned: the first building of the Gustavs Business Centre (anchor lessee – SEB Global Services), new building at Brīvības iela 155 k-4, renovation of building at Citadeles iela 9A.
• The Elemental Business Centre (Skanstes iela 25) demonstrated excellent performance, reaching over 70% occupancy (more than 14,000 sq.m.). When choosing these premises, the lessees appreciated the class A quality, high energy efficiency and sustainable technical solution, as well as the Lessor's pragmatic approach when agreeing on the conditions. Almost the entire office building “Zeiss” in the Mūkusala Business Centre was also very successfully filled.
• The rent level has remained stable, in the range of 14–17 EUR/sq.m in class A and 8–15 EUR/sq.m in class B.
• The construction of new office buildings continued actively, the commissioning of several new projects is planned for the second half of 2023 and the beginning of 2024.

• In general, the filling of the new class A office projects can be assessed as relatively slow, however, after the occupancy of the new buildings, a period without new leasable areas is expected, and the completion of the office building projects on Antonijas iela and in Ķīpsala is planned only at the end of 2024 and the beginning of 2025. It is expected that both this year and in 2024, lessees will still have a good choice between new buildings, although the amount of vacant premises will gradually decrease.
• Market pressure is increasing on class B office buildings and older class A office buildings, where lessors have to fight to retain existing lessees and expect slower filling of already vacated spaces.
• Except for the scheduled opening of the office of the Roche pharmaceutical company in Riga, as well as the opened office of RFE/RL (Radio Free Europe/Radio Liberty), no significant new offices of foreign companies in Latvia have been announced.
• Taking into account only the announced lease transactions, at least 17,000 sq.m were leased in the first half of the year in new office buildings, but the real amount is significantly higher, which confirms that the rental market is moderately active.