Baltic office market sees the biggest deal so far this year
Dexcom, one of the largest U.S. medical technology companies, has signed a lease on an office in the Business Stadium business quarter currently under development on Rinktinės Street in the Lithuanian capital. The company will lease 6,000 sqm of space – or more than a third of its building. The international real estate consulting firm Newsec advised Dexcom on the complex office lease transaction, which is the biggest to date in the Baltic region this year.
Construction work on the Business Stadium North East office building at Rinktinės Street 3 in Vilnius began in mid-2020. It is set to open its doors in the first quarter of 2022. The 15,000-sqm office building will be part of the Business Stadium mixed-use development in the centre of the city, just 700 metres from Cathedral Square.
Martynas Babilas, Head of Tenant Representation in the Baltics at Newsec, says Dexcom considered several potential properties, choosing Business Stadium North East for its central location and flexible leasing conditions that accommodate growth. The office complex is being developed in a convenient area between the old town, the central business district and residential neighbourhoods – a dynamic point of attraction offering well-developed infrastructure and easy accessibility by both private and public transportation and by bicycle.
“While focused on providing services of the highest quality for our customers, we also have to think about our employees and the environment we create for them. We are pleased to be able to offer our current and future team members an office that is well-suited to both their life and their work,” says Jessica Shields, Vice President for International Business Services at Dexcom.
She says the Vilnius office is Dexcom’s main base for operations and customer service across the EMEA region. The new branch is multifaceted and will focus first of all on smooth customer service and technical support related to Dexcom products, also providing business administration services for the company.
“We offered tenants extremely flexible terms and unrestricted possibilities for expansion at the business centre we’re developing where the company will be moving in gradually. We believe this modern office will provide comfortable working conditions for Dexcom’s employees,” says Arvydas Avulis, Chairman of the Board of developer Hanner UAB.
Hanner is emphasizing the creation of functional and modern spaces at the mixed-use business quarter, continually enhanced by a broad range of services in the very same complex: restaurants, shops, a hotel, sport, health and beauty centres, and other services needed for everyday life. The business district will feature public space that is unique in the city, with fountains and cascades of water as well as greenery and recreation areas.
The Business Stadium North East is the third office building in the Business Stadium business quarter which Hanner is developing. Two others – Business Stadium West and Business Stadium North – are now in operation, with over 31,000 sqm of space.
Martynas Babilas explains that when international companies expand to a new city, the amount of office space available and the selection of quality buildings is an extremely important criterion. It is a common practice on the Vilnius market for developers to assume the risk and build speculative space for which tenants are found during construction. That makes a city more attractive to new companies allowing them choice for occupancy scenario planning.
This is the largest office lease transaction in the Baltic countries so far this year. Newsec’s head of tenant representation notes the deal will be a strong impulse for the Vilnius office market, since the recent significant office lease transaction in Vilnius took place last autumn, when Devbridge signed a lease for 5,000 sqm in the New Skansen building which is under development.
“The Dexcom deal demonstrates that offices remain relevant in the context of the pandemic and companies plan to return to them. We can see that companies are not significantly reducing the amount of space they lease, with some even leasing more space to ensure comfort for employees and, when needed, to maintain distances. Where previously the amount of space leased per employee was at average of 10 square meters, now it can go as high as 16 square meters per workstation” Mr Babilas says.