Significant volume of projects under construction (180 130 sqm) mainly consists of built-to-suit developments, with largest being LIDL and Rimi Baltic central warehouses. With Piche development project P14 being fully leased only two speculative industrial projects under construction (Sirin Logistics park developed by Sirin development and warehouse developed by Baltic Container Terminal) are currently available for lease. Despite large volumes under construction comparatively high number of projects under planning shows optimism and positive market trend. Currently more than 250 000 sqm are under planning almost equally split in speculative and built to suit projects.
Despite low vacancy and large construction volumes rent rates are expected to remain stable and gap between projects in Riga and Riga region will remain. Trend where new developments are priced at the same level of existing projects continues.
Looking at the nearest future market might remain stable with potential vacancy increase at the end of 2019 and 2020. Taking into account ongoing trends of Western Europe, we might see potential development of e-commerce hubs in Riga as well as increasing volumes of terminal spaces due to expanding last mile delivery and growing parcel delivery business. Using well tested experience from Estonia and potentially high demand from local businesses, Stock office trend will be growing in Riga for upcoming years.