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Baltic : On to expansion - supply catching up with demand - Q1 2014

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In all three Baltic States, stable economic recovery has made a positive impact on consumer confidence and buying behaviour. Although at moderate pace, increase in retail trade turnover is expected to continue also in 2014.

Demand for new occupational prime supply is met differently in the three countries:
In Estonia, new additions mostly come from the expansion of existing schemes. A few large retail schemes are on the future pipeline, but their completion depends on the economic development on the country;

In Latvia, one large scheme is already in its first stage of development. In the meantime, secondary retail schemes exploit windows of opportunity to improve their occupancy rates and tenant mixes;

In Lithuania, several small-scale specialized developments are under way. Similarly as in Latvia, temporary windows of opportunities are open for secondary schemes.

The rents in primary retail schemes are slightly pressed upwards; the trend however is only temporary, until new introductions are accommodated on the market.

In terms of occupiers, the expansion is primarily driven by fashion brands. At the same time, IKEA opened its first Baltic store in Lithuania; H&M, after tapping into Latvian market, expanded also to Lithuania. After a rapid expansion in 2012, food retail chains were mostly optimizing on their portfolios in 2013, with only a few new secondary introductions across the three countries.

Source : DTZ (Groupe UGL)