STRONG DEMAND SHOULD STIMULATE DEVELOPMENT OF CLASS A PROJECTS
A third of new supply for the year which is approx. 35,000 sqm was delivered during H1 2022. An additional 88,888 sqm of office space is expected to be added by yearend and put the total office stock on the Vilnius market above 1 million sqm. Another 72,000 sqm will be completed in 2023, implying a slowdown in the growth of supply. Active demand should stimulate speculative development of class A office buildings.
KEY INSIGHTS
- The total leased area was higher than expected in H1 2022 at 78,000 sqm.
- The overall level of vacancy in the market fell in H1 from 7.8% to 6.5%, while the vacancy rate in class A offices fell even more – from 3.4% to 1.8%.
- Asking rents were slightly increased in Q2 due to low vacancies as well as indexation for ongoing leases.
- Due to increases in office maintenance costs, older and less energy-efficient buildings are losing their competitive edge as new developments offer modern highly effective solutions for energy efficiency.