Riga Office MarketView Q4 2018 by CBRE Baltics

Economic upswing, a bolstered labour market and office demand to benefit 2019-2020 developments

  • In 2018, Latvia`s GDP annual growth reached 4.8% y/y and at the end of Q4 it showed a 5% q/q increase; in 2019 and 2020 it is expected to grow at a slower pace of 3.5% and 3.1%, respectively
  • The average after-tax salary in 2018 grew by 8.4% compared to 2017, and constitutes 742 EUR.
  • In Q4 2018, two modern office buildings were completed in Riga with a total GLA of ca. 12,200 sq m with absolute year-round stock completions of ca. 36,600 sq m.
  • Office deliveries slightly increased total office space vacancy, which currently stands at 3.9%.
  • During 2018 a total of ca. 150,900,000 EUR was invested in the Riga office market, a 75% y/y increase .
  • It is expected that during the first half of 2019, the sizeable A class office project  «Z-Towers» will be delivered to market, this will be only  the second A class office building added to stock since 2010.
  • In 2019 , modern stock office stock will increase by ca. 92,000 sq m, representing a 14% stock increase
  • Rent rates both in A and B class office buildings remained stable and stand between 14 – 17 EUR/sq m/month, 8 – 14 EUR/sq m/month respectively.
  • Capital Mill has finished infrastructure works for the office complex Capital City (ca. 32'000 sq m), but construction works have been postponed and planned delivery in 2020 is expected to be suspended.

View full report here.