● THE LATVIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • SPRING 2020
THE LATVIAN PROPERTY MARKET LATVIA IS ENTERING A NEW PHASE OF MARKET EXPANSION resilience, ability to adapt goods and services to new markets and tenacity working in difficult conditions that they have acquired provide an advantage relative to competitors. The real estate investment market in Latvia performed similarly to 2018 in 2019, with a total invested amount of just over EUR 230 million. Prime office yields compressed to 6.2 per cent, while retail and industrial yields fell to 6.75 per cent and 7.75 per cent respectively. The Riga real estate market is seeing changes it has not seen in at least the last decade, a time when new office projects have been rare and the new office space market
has stagnated. Newsec is finally noting a supply of new office space, though new premises are dominated by class B projects in class B locations. Future supply of quality class A space that could liven up the leasing market is still awaited. There is no clearly delineated central business district in the Riga office market, so planned new projects (like those by Lords LB and Galio Group) are sure to position themselves as alternative CBDs with their attractive business locations. Contact: Kristina Živatkauskaitė k.zivatkauskaite@newsec.lt
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Latvia’s economy displayed slower growth in 2019, as was expected. Annual GDP grew about 2.5 per cent, with forecasts for this year offering hope of faster expansion. The biggest driver of economic growth is domestic consumption, which is what ensures the greatest stability. Employment is rising and the unemployment level should fall below 6 per cent. The situation on the labour market is positively influencing wage growth. Latvia has been among the first in the Baltics to start feeling the negative impact of falling external demand and thus also reduced foreign trade volumes. However, many companies view such challenges as opportunities. The
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