Lithuanian real estate investors are making a dent in the real estate market

Lithuanian companies that are investing into commercial real estate (RE) projects, are not limited solely to the local market, so says the „Newsec Property Outlook” review. Although the competitive environment of the Lithuanian RE market, especially in the capital, is rather tense and still stimulates the local investment, domestic investors are actively looking for the attractive RE projects in the neighboring Latvia. The currently planned Lithuanian investment in the RE market of the neighboring country amounts to more than half a billion euros.

Lithuanian investments in Latvian RE are over the roof

According to Gintaras Toločka, who is an analyst at the international RE counseling company “Newsec”, Lithuanian capital companies that are investing in the development of RE projects are increasingly bolder to entering the other markets with their capital and experience. Firstly, choosing Latvia and its capital Riga, which are the closest markets not only in a geographical point of view, but also in a legal, fiscal and a competitive sense. In total, Lithuanian real estate companies have already planned projects in Riga that are worth more than half a billion euros.

“At present, Lithuanian companies look at the Latvian real estate market with great interest. The volume of projects that are already started or planned by Lithuanians in Riga amounts to hundreds of thousands of square meters. The maximum planned single investment is 200 million euros in total, and the total value of the development projects is about half a billion euros. It is a signal that Lithuanian companies in Lithuania are growing financially, and in order to diversify their investments, they are increasingly looking for opportunities abroad”, – says G. Toločka.

The largest RE project in Latvia is planned by the investment management company UAB “Lords LB Asset Management”, which will build up to 100,000 square meters of area with hotels, offices and shopping malls, which have an estimated cost of 200 million euros. “M.M.M. projektai” plans to develop a block of 70,000 sq. meters of offices and apartment buildings for 150 million euros. The investment management company “Capitalica Asset Management” has acquired a piece of land that will allow a development of an office buildings block which is estimated to have a surface area of approximately 40 thousand square meters and is evaluated at 50 million euros.

The company named “Vilniaus prekyba”, which is known for the development of an 100 million euros worth and 98 000 square meters surface area shopping mall “Akropolis”, has also made investments in the neighboring Latvia. The company “Hanner” with its 150 million euros investment in multi-purpose property in Riga, is another huge investor in the Latvian real estate.

Vilnius, the leader of real estate of the Baltic countries

Due to the rapid growth of the RE markets, the first half-year of 2018 was especially successful in all capitals of the Baltic States. During this period, the total value of investments in commercial RE transactions amounted to 435 million euros which is 85% of all the business contracts signed in 2017 in the capitals of the Baltic countries.

G. Toločka observes that the capital of Lithuania continues to maintain a leading position in the Baltic States in 2017. The value of investments in the commercial RE transactions in Vilnius amounted to 227 million and significantly exceeded the volume of transactions in Riga (146 million euros) and Tallinn (141 million euros). In 2018, the situation remains similar: in the first half of the year, the total value of investments in commercial real estate transactions in Vilnius amounted to 208 million euros which is 50% more if compared to Riga and 42% more if compared to Tallinn.

It is estimated that in the second half of the year 2018, there will be even more new real estate deals in the capital cities of the Baltic States, however, Vilnius is believed to remain the leader of the region.

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