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„Compared with the same period of the previous year, significant features of the spring 2011 are both the limited supply of retail space in the active central and the Old Town streets, and the faster decision-making from the part of tenants seeking new premises”, informs Mr. Guntis Kanenbergs, Head of the Commercial Department of ARCO REAL ESTATE.
Share of retail space offered for rent in the
central part of Riga does not exceed 12%, in the Old City - 8%
Retail space
„Compared with the same period of the previous year, significant features of the spring 2011 are both the limited supply of retail space in the active central and the Old Town streets, and the faster decision-making from the part of tenants seeking new premises", informs Mr. Guntis Kanenbergs, Head of the Commercial Department of ARCO REAL ESTATE. Due to the approaching tourist and summer season, most demanded premises in the retail space sector in April were just premises suitable for catering business, which, according to the data available to ARCO REAL ESTATE, corresponded to 71% of the whole number of the retail space demands. Most demanded locations of premises suitable for catering business are the most active pedestrian streets in the Old City and locations nearby tourist attractions. Rent levels for the most demanded premises in one of the lowest rental market points – the most active pedestrian streets of the Old City – vary from 15 to 36 EUR/m². Share of retail space offered for rent in the central part of Riga does not exceed 12% (in the Old City - 8%) of the total retail space.
Two thirds of all commercial space purchase demands are relating to retail space located in the central part of Riga or in the Old City. The most common retail space purchase price is from 1300 to 1500 EUR/m² that corresponds to the average rental yield of the central part of Riga City.
Office space
There are now indications of increased interest in high-quality small-size offices, which may be still explained both by budget cuts and the need for a higher class space. Along with gradual decrease of supply of B+, A-class office premises with relatively small areas, i.e., up to 100m², and in addition to the existing full-service office space rental, new market players are entering the rental market, such as the international company Regus, who offers a broader product, such as reservation of the needed office space in any of the offices provided by the company and located in more than 80 countries worldwide.
Interest in office space acquisition in April was relatively low. Buyers are mostly interested in relatively large office space purchases, exceeding 1000m². Interest in purchase of office space is shown by companies that have financial resources available and that wish to save money in the long-term prospective on the account of potential rent increases. Today, when real estate prices have a slight upward trend, is the right time to evaluate properties being offered for sale.
Warehouse and industrial space
In Riga and vicinity the non-heated storage space rental supply significantly exceeds the demand. Rents actually have not substantially changed since the previous year's relevant period. „The heated warehouse space market has improved, the number of vacant warehouse areas is declining", says Mr. G.Kanenbergs. Typical demands are often combined with the need for a nearby office. Important factors for industrial facilities are their location and quality of access roads. Vacant space is often sought in a place not far from business partners or objects in order to allow save on transport costs in the future. It must be said that offer of vacant high-quality warehouse facilities located between Riga and other larger Latvian cities on the strategically advantageous roads is insufficient.
Commercial land
Despite the warmer weather, demand is not significantly increased in the commercial land market segment. „Currently we have observed consistently high interest in land plots with area of 3000-5000m² intended for construction of up to 5-storey apartment buildings", informs Mr. G.Kanenbergs. Most demanded land in the territory of Riga City is the land intended for construction of apartment buildings with well-kept and green surroundings and developed infrastructure - kindergartens, schools, food supermarkets in the immediate vicinity. Price level of demanded properties depends on the location of the land in the city, the environmental situation, existence of improvements and engineering systems construction costs.
Additional information:
ARCO REAL ESTATE
Mr. Guntis Kanenbergs
Brīvības Street 39, Riga, LV 1010, Latvia
+371 6736 5555
+371 2863 2211
www.arcoreal.lv
26.05.2011.