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Although there is currently only 1 percent of vacant offices in Vilnius’s A and B class business centers, the situation may change significantly in the next two years.
Although currently there is only 1% of vacant offices in Vilnius’ A and B class business centers, the situation may change significantly in the next two years. By 2018, the area of rented offices in the capital will increase by as much as 30%. It is planned to build about 150 thousand sq. m. of new business centers.
“On average, about 30 thousand sq. meters of modern office space are leased in the capital per year. In 2014, 30 thousand sq. meters of modern office space were leased, and in 2015 – about 40 thousand sq. meters. Activity in the market was supported by IT companies and service centers, which currently occupy about 20 percent of modern office space in Vilnius. In 2016, the demand for offices may grow to 45 thousand sq. meters, and the supply will increase by about 50 thousand sq. meters this year. The greatest changes in the office market are expected in 2017, as the supply will jump by another 100 thousand sq. meters, and the development of companies will be limited by the lack of qualified employees, especially in the IT field,” says Giedrius Brūzgė, Head of the Asset Management Department of the company “Eika”.
A real estate expert estimates that by the end of 2017, the capital may have as much as 85 thousand sq. m of unleased offices if all real estate developers adhere to the currently announced plans to build business centers. It is estimated that the current vacancy rate on the market of just 1-2 percent will increase to 12-14 percent. However, unleased areas will be distributed unevenly: in some business centers they will become vacant, in others they will be filled. According to a representative of the company “Eika”, not all previously built business centers will have an increase in vacancy.
“Our experience shows that for those looking for a new office, the efficient layout of premises and workplaces, the ability to use shared conference rooms and meeting rooms are extremely important, as this eliminates the need for investments in less frequently used premises and optimizes costs. Convenient transportation, car parking, restaurants and service companies located in or nearby buildings also remain important,” says G. Brūzgė.
Currently, one of the most important requirements of tenants is the largest possible floor area. Only a small part of already built business centers can offer a typical floor area of 1,000 sq. meters, but in newly built business centers, the average floor area is from 1,000 to 2,000 sq. meters. According to the representative of “Eika”, the possibilities of office expansion in the same business center are becoming increasingly relevant for companies, because otherwise, if needs change, they have to look for other premises, temporarily stop work and invest in relocation. Business center managers who can ensure the company’s office expansion opportunities in the same business center for a period of 2-5 years have a significant advantage.
“Companies established in business centers are increasingly paying attention to employee motivation, therefore, recreation areas, terraces, ergonomic furniture, services in and near the business center, such as a sports club, kindergarten, are becoming a competitive advantage. In order to attract tenants, business center developers are investing in modern building management systems, bicycle storage areas and showers, changing rooms, electric car charging stations, and other advantages that did not previously provide tenants with greater value,” says a representative of “Eika”, which is building the new business center “135”.
The significant growth in office supply is also forcing market veterans to step up. Managers of previously built modern business centers are also actively responding to the changing needs of tenants: they are installing bicycle storage, showers, more convenient parking infrastructure, and investing in modern engineering equipment and building management systems.
About the Eika group of companies
Founded in 1992, the company “EIKA” is one of the largest real estate development and construction groups in Lithuania, successfully developing residential, commercial, public and other purpose building projects, creating a new quality of life and work. The company has already built more than 3,000 apartments and 270 thousand square meters of buildings. “Eika” has been awarded many times as the best real estate developer in Lithuania, and the company’s projects “Santariškių namai” and “EIKOs namai Pilaitė” have also become the best in Lithuania.
More information:
Giedrius Bruzge
Director of Lep Asset Management Department
Phone: +370 686 24619
Email. [email protected]