Vilnius office market demand hits new high amid record quarterly take-up
Demand on the office market in the Lithuanian capital rose to a historic high in the third quarter of 2021 as more office space was leased out than in any quarter since monitoring of the Vilnius office market began in 2016.
KEY INSIGHTS
- In the third quarter of this year, office lease agreements were signed for more than 55,000 square metres of space.
- The largest leasing deal of the third quarter was made by Girteka Logistics, which leased 14,000 sqm of space in the Girteka Park business centre at Laisvės Ave. 36. Several noteworthy lease agreements were also signed with state-owned companies: institutions under the Ministry of National Defence will move to a 4,300-sqm office at the Cloud Offices business centre and Enterprise Lithuania will occupy 2,100 sqm at the Technopolis BETA business centre.
- Total vacancies on the Vilnius office market shrank from 6.6 percent to 5.3 percent in the third quarter. Free class A office space decreased from 4.9 percent to 4.3 percent, while that in class B offices fell from 8.1 percent to 6.2 percent.
- The increase in office leasing rates in the future is projected to outpace inflation, which in 2021 could reach about 3.4-3.7 percent. Another reason for the growth of leasing prices is the rising cost of construction materials and labour.
- Tensions in the construction sector are also causing delays in the final fit-out of offices – if previously it was promised that an offices would be ready within 3 months, now it may take 6-8 months.