Riga office stock extends over approximately 590,000 m². New deliveries of speculative modern offices were insignificant during the last five years; they comprised mainly built-to-suit projects for govern- mental institutions. Financially stable tenants are making long term decisions, choosing built-to-suit offices or buying existing buildings outright and vacating leased premises thereafter.
This will cause a short term increase in vacancy for existing modern office buildings in 2016. Overall, vacancy level for prime offices is close to zero, whereas the vacancy of grade B offices stood at 7.5% at the end of 2015. Given the insufficient new sup- ply, the vacancy rate is expected to de- crease slightly in 2016, as space is absorbed by office demand.
A number of prime office buildings are currently under construction, including Z-Towers and office centre in the Skanstes Business district.
The construction of several projects, including Business Garden Riga, Ulmana Office Park, New Hanza City, a grade A Skanstes office building and others are expected to begin soon. In this case, supply could potentially increase sharply in 2017 and 2018.
Source : BNP Paribas Real Estate