Vilnius Office Outlook 2023 H1

Deadline Approaches: Tenants Delay Renting Spaces in New Business Centres

In the office market, rental activity has been slower than expected, with a rise in overall vacancies. Notably, there is a surge in quick leasing deals in recently enlarged sublease areas. Rental prices have increased due to indexation at the start of the year. Despite the economic challenges, developers believe in market opportunities and are actively planning new office projects.

• Office rental activity in H1 2023 was slower than expected, with only 33,700 sqm of office take-up, including 14,300 sqm in Q2. Tenants are approaching relocation plans more cautiously due to the slowing economy.
• The overall level of vacancy in the office market rose from 6.5% to 7.9% in Q2. Class A vacancy decreased, but class B vacancy increased, affecting the overall vacancy rate. The market is expected to stabilize at an average vacancy level of 6-7% by year-end.
• Few major lease transactions took place in H1, with decisions on office leases being postponed until the economic environment stabilizes.
• H1 2023 saw increased activity in office construction and project planning. Several big projects are in progress or planned, showing developers’ belief in market opportunities.