● THE LATVIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • SPRING 2022
THE LATVIAN PROPERTY MARKET
Photo: ADM Holding
RIGA’S INVESTMENT MARKET IN 2021 WAS ACTIVE AS NEVER BEFORE
At the start of 2021, the Latvian economy continued its 2020 trend of relative sluggishness and unpredictability, with above-average unemployment. But Q2 was more active: a GDP jump of 10.3% from the year before contributed to inflation of 2.7%, while unemployment decreased slightly to 7.9%. In Q3, GDP grew by 5.1% and inflation was 4.2 %, while unemployment fell notably to 7.2%. For Q4, preliminary figures put GDP growth at 3.4% and unemployment at 7.6%. Average inflation for the year was 3.2%. Forecasts for 2022, as updated in December 2021, are slightly less optimistic than before. Overall, however, 2021 was better than initially expected. While some segments remained weaker than in pre-Covid times (hotels,
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catering), others like logistics, grocery and healthcare improved, spurring economic growth and employment. Rising energy prices gave some sense of uncertainty at the end of the year. Nevertheless, the latest forecasts for 2022 envisage GDP growth of 4.1% with a 6.6% inflation rate and 6.8% unemployment. The office market remained active despite the popularity of working from home, with decreasing vacancy rates and new projects. Some of the large office developments put on hold in 2020 began construction in 2021, making the city of Riga more attractive to international companies. The real estate investment market in Latvia, meanwhile, was in record
territory. Deal value of about EUR 610 million in 2021 was the most ever in Latvia and exceeded the figure for 2020 by 144%. There were 15 significant investment transactions in various sectors in the year, led by retail, with deals for one-fifth of the total value signed in the last quarter. It will be difficult to maintain similar levels of investment in the coming years, though the number of investment transactions may grow further and maintain development momentum.
Contact: Inita Nitiša i.nitisa@newsec.lv
