Real Estate Scene of the Latvian Capital
Shopping centre space of Riga in terms of per capita is still just a fraction of what it is in Scandinavia and West Europe, but the progress has been huge within a couple of years. Riga now has a total of 200 000 m2 of modern retail space, two times than just two years ago. It is estimated that by 2004 hypermarkets space will double again, reaching 424 000 square metres by the end of next year
Norwegian Linstow Varner expanded their popular ALFA Centre, which is anchored by the grocery RIMI. The newly enlarged centre totals 33.400 m2 of leasable area. Linstow Varner is the largest retail developer in Latvia. It plans to expans its other three retail malls of Centrs, Mols and the main railway station.
Stockmann department store of Finland has started a construction of a complex of 38 000 m2. Of this, Stockmann’s share is about half. The complex will also house movie theater and smaller shops and restaurants.
Lithuania’s Prekyba has entered the Latvian market with Maxima chain of groceries. They are building a large centre of 52 000m2, the first phase will be ready by 2003, aslo anchored by Maxima. Developer Pro Kapital is building a first phase of Domina Centre, with 17 000 m2. Modern retail rents of Riga are higher than in Helsinki, at about 25 euros/m2/month.
Office market in troubles
Riga is the most central city of the Baltic states with 780 000 inhabitants, but it still has troubles in office market. The total stock of A class office is estimated at only 15.000-20.000 m2. No new big A class buildings are constructed at the moment. The market for good B class office is quite diverse. Skanska’s A class Valdemara Centre is still 50 % vacant.
Rents of A class offices are less than EUR 20 per month. Latvian developer Domus plans to finish a 3.2602 office building on Gertrudes Street, with 2100m2 of office space. Rent will be set at about Eur 12-13 plus common charges.
All in all, Riga’s office market will not be interesting within a year or so, but Latvia joining the EU already in the spring 2004, the Baltic capital certainly needs to be taken seriously on the real estate market of Northern Europe.
By Rene Levy, facts based on Ober-Haus and Riga City Council information