Economics

Transcription

1 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q Economics Office rents in Riga without VAT According to the data, published by the Ministry of Finance (FM), on gross domestic product (GDP) in the st quarter of, the moderate growth has continued in economics and, in comparison with the respective quarter of previous year, the GDP has increased by.% in comparable prices. It is essential that the economics of Latvia has grew already for quarters in a row and in the st quarter of, in comparison with th quarter of, according to seasonally adjusted data, the GDP has increased by.%.,,,,, Finally, although the growth of GDP in the st quarter of this year was moderate, the large increase of investments, as well as rapid industrial growth in April and the decrease of registered unemployment during the last two months indicates on possibly more positive trends in economics in the st quarter of this year and provokes optimistic feelings on economic development in the second half of the year., A Class B Class Source: Ober-Haus Data: Q A total growth does not provide a complete picture on the ongoing in the economy, but the most important is the fact that the investments have increased by.% within a year. In June the average consumer price level, in comparison with May, increased by.%. The prices for goods increased by.%, but prices for services by.%, according to the information gathered by Central Statistical Bureau (CSB). In June in comparison with May the average consumer price level increased by.%, which was mainly affected by rapid price decrease on vegetables by.%. One of the reasons may be decrease in demand for vegetables due to the wave of diseases caused by E.coli bacteria in Europe, reports the Ministry of Finance. Up to sq.m. - sq.m. Over sq.m. During the latest months the average consumer price level, in comparison with previous months, has increased by.%. Source: Ober-Haus Data: Q In June, in comparison with respective period of the previous year, the consumer price increased by.%, prices for goods increased by.%, but prices for services by. %. In June the price increase of products and services related to housing, spirit liquids, as well as price decrease of footwear and food left the biggest impact on changes of consumer prices., In the housing segment the increase of heating rate on average by.% left an impact due to the natural gas price increase for large consumers. Solid fuel prices grew by.%, but liquefied gas in cylinders became by.% cheaper, effected by discounts.,,, In July consumer prices are expected to decrease mainly due to seasonal factors, with the decrease of prices on food and clothing.,, Source:Ober-Haus Dat: Q Tel. +, aija.abolina@ober-haus.lv

2 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q Office space In the nd quarter the office rental market is persistently active in comparison with previous quarters. In general the average price for office rent had remained stable, in the nd quarter of rents for A-class office segment ranged from EUR - EUR/m, the highest rent for A-class office was EUR /m, while prices for B-class office ranged from to EUR /m. Rental prices for C-class office segment ranged from to EUR/m. Also the average housing management costs remained stable. The average housing management costs for A-class offices was from. to. EUR/m, for B-class offices - from. to. EUR/m and for C-class offices - for up to. EUR/m. With the beginning of summer season, more active interest in office rental market is noticed in office premises with total area from to m in the center or quiet center of Riga. It is very important for clients to have a parking lot right to the office. There are still new international companies considering the possibility to enter the market of Latvia. The interest has been observed about both the rent of office premises, as well as acquisition of property. Mainly the interest on acquisition of the building is noticed for the need of the company, in the area from up to m. There are several factors important for the choise of office, particularly the location of the office premises, infrastructure, the quality of decoration and communications, parking availability, public transportation, housing management costs and the level of service provided is taken into account. Companies are interested in both open space offices, as well as offices with the system of cabinets. It mostly depends on the corporate policies and specialization of the company. New offers have appeared in office space segment already now short-term office space solutions are available in several office buildings fully equipped offices, as well as other services are provided, such as, virtual office rent, conference room rent, secretarial services etc. Before now such services were available only in Valdemāra Centrs, but currently they are available also in Duntes offices, as well as the biggest provider of office rental solutions Regus, with the office on Tērbatas street, offers such services. The development of services can be explained by interest from other international companies to enter the market of Latvia, using the short-term office premises solution for the development of business, or offering them as beneficial shortterm solution for small companies until they have a need to rent an office space in long-term. Office rents in Riga without VAT,, Source: Ober-Haus Data: Q Source: Ober-Haus Data: Q,,,, A Class B Class Up to sq.m. - sq.m. Over sq.m., With the succesfull development of Duntes offices, the Duntes Business Lounge (on nd floor of Duntes offices) is opened, offering ergonomical and functional workplace for companies and office space rent both for short-term, as well as long-term solutions for the succesfull development of business, as well as provides premises for organizing conferences and negotiations, a virtual office rent is also possible. The main purpose of Duntes Business Lounge is to perform a representative functions of the company, realizing the development of status, individuality and competence, as well as demonstrating the taste, values and working style of the company. Quality service and individual, Source:Ober-Haus Dat: Q,,,, Tel. +, aija.abolina@ober-haus.lv

3 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q approach helps companies to find the most appropriate solution for the succesfull development. Office rents in Riga without VAT The recovery of economics encourage the company Regus to start its operations in Latvia. Regus is expanding its operational network up to countries and helps companies to benefit from economical recovery in the Baltic region. The opening of the new Regus business center in Latvia will provide companies with possibility to use the optimism created by economical growth in this important place for business in the Baltic states. The new center in Riga is the first office of the company in Latvia. The global workplace provider Regus is now supporting companies in all three Baltic states: Lithuania, Estonia and now also Latvia. Generally Regus is currently operating in countries all around the world. Latvia is again a perfect place for companies looking for growth potential. Low salary costs make the Latvian export possibilities very competitive, and it is definitely an important component of Scandinavian/Baltic region sales, finance and transport, explains Michael Bart, Regus Regional Vice President of Baltic States, Germany and Scandinavia. We have observed the increasing demand from customers, who would like to use the flexible workplaces in Latvia in order to explore the market opportunities or expand the operations. The opening of business center in Riga is an answer to growing demand and interest showed. Michael Bart from Regus added: In globalized economy companies have to be mobile. They need skills to quickly detect new production or recovery possibilities and combine them with ever increasing cost effectiveness. Regus provides such an opportunity with the biggest video conferencing studio network and BusinesWorld a special loyalty program, providing the access to Regus business lounge premises all around the world. Such customers as Google, GlaxoSmithKline and Nokia are joining thousands of growing small and medium-size businesses, which benefit by selecting the services offered by Regus, allowing companies to concentrate on their main business activities. More than, customers daily use services provided by Regus in more than centers, cities and countries. Regus was founded in in Brussels, Belgium. The main office of Regus is located in Luxembourg. The company counts among UK Stock Exchange. Retail In terms of commercial areas, in the nd quarter of a demand remains for smaller retail spaces in the active center, with intensive pedestrial flow, and in Old Town on most favourite streets of tourists. The highest demand was observed for areas from to m suitable for clothing, souvenir trade, as well as for food and beverage trade. While due to the fact that the catering companies are expanding their operations, the demand for cafe and restaurant premises in Old Town, City center of Riga, as well as quiet center has increased. It would not be right to say that with the beginning of summer season the demand has increased, because most of businesmen search for premises started in the beginning of the year to be able to start operations right from the beginning of the season.,, Source: Ober-Haus Data: Q Source: Ober-Haus Data: Q,,,, A Class B Class Source:Ober-Haus Dat: Q Up to sq.m. - sq.m. Over sq.m.,,,,,, Tel. +, aija.abolina@ober-haus.lv

4 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q The number of vacant retail space with area from m has increased. Office rents in Riga without VAT In biggest housing estate centers of Riga (Purvciems, Pļavnieki, Ziepniekkalns, Āgenskalns, etc.) a demand for retail space exists with area from to m, suitable mostly for sale of food and beverage. The interest from investors for commercial areas in Latvia, mostly Riga, is increasing. Currently the more active interest from investors is observed about shopping centers, small premises for shops with stable tenants and provided cash flow. Mostly investors from East are interested in possibility to invest in Latvia, but also an interest from Central Europe and Western Europe exists. Investors are interested in cash flow in the center of Riga with a yield of at least % or % in suburbs of Riga or other towns.,,,,,, A Class B Class Source: Ober-Haus Data: Q In September the Canadian real estate developer Homburg Group is planning to finish the st stage of the project in Zolitūde, Priedaines street. In the st stage the Maxima XX shopping center and underground parking lot will be constructed, but in the nd stage -floor residential building. Total investments of the project will consist of million EUR (. million LVL), but in the st stage about million EUR (, million LVL) will be invested. A shopping center in the area of m and underground parking lot in the area of m will be constructed during the st stage of the project. Homburg Group is planning to obtain a construction permit for the development of two more shopping centers in Riga in Purvciems and Mežciems. In September the real estate company Imanta Retail Park is planning to finish the st stage of the project in Imanta, in the territory of former factory Radiotehnika. Within the st stage of the project, the building will be renovated with Prisma hypermarket in it, which will occupy slightly more than m. A parking lot will be built up, area will be landscaped, a pedestrian road and a park will be constructed. Until the end of the year it is planned to finish also the nd stage of the project and renovate the whole st floor of the building with total area of. m. In perspective it is planned to develop the building of Radiotehnika and create a shopping and entertainment center. Rents for commercial areas in the nd quarter remained practically in the level of previous quarter. Rents for small commercial areas in Old Town as well as in the active center are on average EUR/m, in some areas reaching even EUR/m, while rents for larger premises ranges from to EUR/m. Rents for commercial space situated further from the center are EUR/m for small areas and EUR/m for larger premises. At the end of lease agreements, rents usualy are increased, thus the owners often are looking for new, more solvent tenants. Up to sq.m. - sq.m. Over sq.m. Source: Ober-Haus Data: Q,, Source:Ober-Haus Dat: Q,,,, Tel. +, aija.abolina@ober-haus.lv

5 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q The high proportion of the fill remains in the most popular shopping centers. T/C Spice has completed all the retail space, the vacant space in T/P Alfa is.%, in T/C Origo.%, T/C Mols.%, T/C Dole.%, Galerija Centrs.%, Olimpija.%, while in Riga Plaza % of all retail space. In August the first Mohito clothing store will be opened in Latvia in the fashion and entertainment center Riga Plaza. Rents for retail space in shopping centers remains in the level of previous quarter and the average rent ranges between to EUR/m, in some centers the rent reaches up to EUR/m for smaller premises. Warehouse/Industrial space Office rents in Riga without VAT,,,,,, A Class B Class The nd quarter of as in all industries has been relatively more active and productive in comparison with the beginning of year. Looking at the small, but still the economical growth in the country and resumption of crediting by banks, an interest has been observed not only from foreign businessmen, but also from local producers, who are expanding and thus looking for bigger production and warehouse facilities. There is still an increased interest from businesmen from former CIS countries on production facilities and the purchase of investment properties. In the nd quarter the biggest demand were for warehouse and production facilities with the area till m - both for lease as well as for purchase. There are specific requirements for areas bigger than m, especially production premises for lease, the requirements are very specific, and most of the owners of premises are not ready to adjust premises for the need of tenants, because currently the rents are still relatively low. Businessmen begin to evaluate the most beneficial options whether to rent premises or allocate the amount of rent for a credit to cover. There have been cases when banks offer more favourable conditions for the purchase of the property, thus tenants refuse to lease and purchase properties and adjust them for their needs. Source: Ober-Haus Data: Q Source: Ober-Haus Data: Q Up to sq.m. - sq.m. Over sq.m. Many businessmen are ready to purchase commercial land plots and construct warehouses and production facilities on their own, because each of them is having individual requirements and buildings of Soviet times are difficult to addapt. The demand for Soviet time commercial premises has decreased, which contributes a little in price increase for properties built within the last five years. A shortage of new type commercial properties has got moving the market of commercial land plots. oth the demand for purchase,as well as available offers of land plots for sales has increased. The biggest demand for commercial land plots remain in the areas close to Riga. The average price level remained in the level of previous quarter. Rents for old commercial hangars without heating is in average. EUR/m, rents for certain facilities has been slightly Source:Ober-Haus Dat: Q Tel. +, aija.abolina@ober-haus.lv,,,,,,

6 L A T V I A N C O M M E R C I A L R E A L E S T A T E Q increased; prices for renewed shops in old industrial areas are in average from to. EUR/m, for recently launched A-Class complexes with adequate quality equipment in all locations within Riga from. to EUR/m, for certain the rent has increased by. EUR/m. The average management costs ranges from. to. EUR/m. Office rents in Riga without VAT, The average selling prices have remained in the level of previous quarter, for certain new commercial properties the selling price has slightly increased. Price for small secondary warehouses, industrial and service constructions in the area till m is in average EUR/m. Prices for sheds with the total area from m ranges from EUR/m. Price mostly depends on shed condition and specific features. Average prices for land plots suitable for commercial buildings are from EUR/m.,,,,, A Class B Class Source: Ober-Haus Data: Q Up to sq.m. - sq.m. Over sq.m. Source: Ober-Haus Data: Q,,,,,, Source:Ober-Haus Dat: Q Tel. +, aija.abolina@ober-haus.lv