"Tenants are more and more frequently faced with limited options when searching for offices fulfilling their requirements," says Mr. Guntis Kanenbergs, Head of the Commercial Space Department of ARCO REAL ESTATE, adding that along with the improvement of the economic situation it has been observed that the entrepreneurs want to improve their working conditions, which has contributed to the commercial market activity.
As stated in the ARCO REAL ESTATE commercial space market overview, in the 3rd quarter of 2014, the supply in the office rental market in Riga contained more than 600 000 m2 of the A and B Class lease space in 71 office centres. Since most of the Class A buildings are used for commercial banking needs, opportunities to lease space of this class are limited, so tenants are offered Class B office space with high level technical equipment as an alternative. However, Mr. G. Kanenbergs predicts that in the future the supply of high-class commercial space will increase, taking into account the construction of the Z-Towers project in Pārdaugava, as well as erection of a new office building in the Skanstes Street area.
Decrease of the percentage of vacant Class A and B office premises is still continuing, with the sole exception of Class B office space outside the city centre, where the share of vacant space has increased from 12% to 15.5%. According to Mr. G. Kanenbergs, this can be explained by the fact that moving of the State Revenue Service to its new office building has resulted in new vacant areas of this class. The expert also admits that the vacant premises may be soon occupied by companies who want to move from Class C office space.
Mr. G. Kanenbergs specifies the main factors that influence the choice of the potential office space tenants: “Most frequently, the customers adopt decision on lease of commercial space taking into account the technical condition of the office, its location, rent level, management price and quality, as well as compliance of layout and car parking possibilities. Similarly, the choice is influenced by several secondary factors, such as ad placement options, façade condition, neighbouring institutions and transport.”
According to the data provided by the ARCO REAL ESTATE commercial space market overview, the most popular places in the 3rd quarter where office space was searched, was the Near Centre, office areas of Skanstes and Duntes Street as well as the Near Pārdaugava.