OREANDA-NEWS. October 05, 2007. While the growth of residential real estate has slowed, the demand for all kinds of commercial real estate has increased intensively due to rising economic indicators and successful service sector results. The occupancy indicators are close to 100% in high quality objects, especially in the office and retail sectors. This is characteristic for the capitals of all the Baltic States, reported the press-centre of Colliers.
 
In the office market of the Baltic States the demand for modern premises substantially exceeds the supply. Rapidly growing companies are not finding modern premises today in accordance with their needs. The situation should essentially change in 2008–2009 when the supply of modern premises will almost double.
 
The highest rent of class A office space, up to 26 EUR/sq.m., is found in Tallinn, in Riga the highest rent is 22 EUR/sq.m. while Vilnius has the highest rent at 19 EUR/sq.m. In 2008–2009 the prices in all the capitals of the Baltic States will fall slightly and eventually stabilise.
 
The economic growth has caused the development of the consumer market and the ever increasing demand for retail space.

The record holder in the Baltic States for retail space in respect to both area (stock data includes retail spaces over 5 000 sq.m.) and price is Riga. The total retail area in the Latvian capital is 490 612 sq.m. In Vilnius it is 348 896 sq.m. and in Tallinn - 339 339 sq.m
 
During the coming years it is expected that ‘outlet centres’, which will find a niche in the competitive retail space market, will appear in the Lithuanian retail market. It is forecast that more new trademark production will appear in the market, mostly on a franchise basis. The supply of retail space will increase in multifunctional objects. Leisure zones will become popular alongside the main retail trade in new shopping centres. Specialised shopping centres for DIY, repair, and finish goods and other similar shops are rapidly expanding.
 
In the industrial space market most of the modern premises are today concentrated in Vilnius and Vilnius region. But due to its exceptional location and port opportunities, Riga will soon take the leading position. By 2009 it is expected that the Riga market will offer the most industrial premises. The main advantages, which will influence the development of this sector in Latvia, are its convenient transport infrastructure – land roads and even several deep-water ports, which will eventually become the main competitive advantage against Lithuania.
 
The Baltic States can occupy a transit country position in the European logistics chain and become a stop in transporting freight to bigger markets, i.e. Russian and Belarusian. The manufacturing and warehousing in Vilnius will move in the next few years from old premises in the capital’s industrial districts and will concentrate along the main arteries at a distance of 15–25 km from Vilnius. Kaunas, Klaipeda, and especially Panevezys, which is located near the Vilnius – Riga highway and crossroads, where roads from Kaunas and Panevezys intersect, are becoming the most attractive locations in Lithuania logistically. Vilnius and Vilnius region have the lead today in respect to industrial space. According to the planned projects during 2007–2008 the Kaunas and Klaipeda markets will be offered 381 000 sq.m. of industrial space. The most industrial space will be available in Kaunas and Klaipeda regions.