Vilnius Office Outlook, 2021 Q2

VILNIUS OFFICE MARKET, 2021 Q2 CALMER Q2 GENERATES STRONG TAILWINDS FOR THE SECOND HALF OF THE YEAR SUPPLY Total Stock 2021 Q2 2021F New Area PQ/PA VACANCY 871 300 m2 955 500m2 TAKE UP Growth yoy 2 600m2 111 800m2 RENT RATES, 2021 Q2 Class A 16.6% 13.3% ECONOMIC INDICATORS Total 2021 Q2 2021F 4.9% 5-6% www.newsec.lt Area 6.6% 10-12% Vs.5y ave 2021 Q2 2021F 14 300 m2 90 000 m2 62% 102% CLASS A CLASS B 16-17.5¤ 10-14¤ GDP 2020 2021F Unemployment HICP -0.9 % 4.1 % Wages 8.5 % 7.6 % 1.1 % 2.6 % 10.2 % 7.9 % Source: Ministry of Finance; F - forecast 1 FOLLOW US

TAKE-UP REACHES THE MIDWAY OF THE ANNUAL FORECAST With the area of concluded leases during the second quarter reaching 14 300 sqm, 2021’s half-yearly result of half-year already amounts to more than 45 thousand sqm. Two-thirds of that leased area consisted of deals of 500 sqm or more. AVAILABILITY WILL INCREASE TAKE-UP IN VILNIUS Source: Newsec Due to extended lease decision-making processes, short-term year-end vacancy may Thousand, sqm HALF-YEAR AVERAGE reach as much as 10-12%. Estimates of future 120 supply indicate that landlords – especially those managing older buildings – will be forced 100 to accept long-term vacancies. 80 60 40 20 0 2017 2018 2019 2020 2021 2016 Q1 Q2 Q3 Q4 Forecast RESCHEDULED DELIVERY TERMS FOR ANNUAL SUPPLY OFFICE PROJECTS The first half of 2021 saw the introduction of The supply of office space planned for 2022 only 25% of the supply expected to arrive this has been decreasing due to changes in year. Following the delivery of the larger part construction and development schedules. of this year’s supply in the summer and About 30,000 sqm of office space that’s autumn, we expect to see the completion of currently under construction will be delivered the new projects and the settlement of later, in 2023 tenants. LARGE AREA AGREEMENTS AT THE VACANCY DECREASED NEGOTIATION PHASE Overall market vacancy fell from 7.1% to 6.6% Even though major office tenants have plans to during the second quarter, while vacancy in expand, decision-making processes will only Class A offices declined more significantly, turn into signed leases in late summer. from 5.9% to 4.9%. POSITIVE TRENDS FOR THE SECOND HALF OF THE YEAR Although not all projects planned for 2021 have been fully leased, on-going negotiations and current market demand indicate the emergence of more positive trends. www.newsec.lt FOLLOW US 2 2