Analytics, Baltic, Real Estate

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 00:17

Real estate market still active in Baltics - CBRE

BC, Riga, 20.11.2019.Print version
The Baltic real estate market is still active thanks to developers' modern projects, expansion of global companies and successful exports, real estate firm CBRE informed LETA.

CBRE Head of Research in Continental Europe and Head of Thought Leadership and Data Strategy in Europe, the Middle East and Africa, Jos Tromp points out that global economic growth pace is slowing down, while risks are increasing. In addition to slow economic growth, there is low inflation, ageing societies and low immigration intensity. Therefore interest rates are not expected to increase at the moment - on the contrary, the question is how low the interest rates can go, and what the effect thereof will be on savings and pensions, believes Tromp.


On the other hand, activity on the real estate rent market and basic indexes remain high, CBRE representatives explained. This is because of the increasing number of modern projects, expansion of global companies, higher salaries and more active export industries.


According to CBRE Baltics Associate Director Denis Rein, office space occupancy in Tallinn and Vilnius is steady and growing as a result of increasing demand. Riga, however, is in a different phase of the cycle - office space occupancy is lower and developers' activity is gaining momentum as Lithuanian and Estonian developers look for new opportunities beyond the Baltic countries.


The demand for new office space in the Baltic countries will increase overall, taking into consideration that renters' requirements are increasing on the industry's ecosystems, rent agreements and user experience. The ongoing struggle for qualified personnel will put pressure on rentors of older premises, and give advantage to the newer projects, believes Rein.


The real estate market is changing in all three Baltic countries, says CBRE Baltics Senior Analyst Ignas Gostautas, adding that greater capital expenditures and closer relations with retailers are required not only in the context of new projects, but also older office space that needs to be restored according to present-day requirements. However, some local and international investors who are able to see more opportunities can use this to expand their presence in the Baltics, notes Gostautas.


The Baltic hotel market is also moving into the next development phase, said the CBRE experts. Thanks to better mobility, higher incomes and knowledge of the region, the number of nights tourists spend in hotels has been steadily growing.






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