Riga Office Outlook, 2021 H1

RIGA OFFICE OUTLOOK 2021 H1 Project: Z-Towers Developer: S.P.I. Group

RIGA OFFICE MARKET RIGA OFFICE OUTLOOK, 2021 H1 YOUR PARTNER IN THE BALTICS Newsec, the Full Service Property House in Northern Europe, is the solid choice of partner within Advisory and Property Asset Management. With sharp analyses, hard facts and just the right skill set, we’ve got you covered. Project: Z-Towers 2 Developer: S.P.I. Group Office: Amber Beverage Group

RIGA OFFICE OUTLOOK, 2021 H1 RIGA OFFICE MARKET RIGA OFFICE MARKET REMAINS STABLE INSIGHTS MACRO INDICATOR FORECAST Nearly Zero Energy consumption will FOR 2021 be complemented with a food court, co- • The latest Bank of Latvia forecast working space, shops, sport facilities and provides a positive view of the economy. +3.3% more. GDP is projected to grow by 3.3% and 6.5% in 2021 and 2022 respectively. GDP • Eastnine has been making progress on Kimmel Quarter, namely by identifying • By the end of June, as much as 28% of +2.0% the best design project, which proposes the total population was fully vaccinated. a holistic transformation of the former HICP Kimmel brewery into a lively public • 2021 will bring almost 10k sqm of new destination with inspiring offices. office space. 8.3% Demolition works are already underway. The total area set aside for the new • Despite the long work-from-home Unemployment project is roughly 38,000 sqm, including period, the office market experienced approximately 4,000 sqm space for an uptick, leading to a 2% points drop in +6.9% heritage protection. total vacancy, which reached 13.2%. Wages • Amber Beverage Group chose • In the first six months of 2021 Z-Towers for their new office, believing there were 7 significant investment OFFICE MARKET 2021 H1 that a new working environment will transactions in Riga, including one office motivate employees and ensure the transaction whereby Eastnine acquired 757,000 sqm company continued success. two offices from Vastint – the Zaļā 1 office building in Riga and the UNIQ Total supply • Draugiem group almost doubled business centre in Vilnius. The total its number of employees during the transaction value stood at 35.5 million 13.2% pandemic. This prompted the opening of EUR. a new office located in the Icon on Raiņa Vacancy Bulvāris, which now joins the company’s • In March 2021 Lords LB Special Fund V current offices in Pārdaugava, Mārupe has started construction works of the 1st 46,000 sqm and Cēsis. stage of Preses Nama Kvartāls with an aim to finish the stage in the beginning Under construction of 2023. A convenient, pleasant and healthy working environment for 240,000 sqm 2,500 employees will be created. The BREEAM Excellent certified office with Planned stock “When designing the new space, it was important for us to involve our employees in the development of the office concept, the main priorities being creating an ergonomic, comfortable and aesthetic work environment, as well as providing optimal lighting, acoustics, and ventilation,” said Jekaterina Stuģe, CEO of the Amber Beverage Group. 3

RIGA OFFICE MARKET RIGA OFFICE OUTLOOK, 2021 H1 ”Our long-term goal is to create a multifunctional city quarter located in one of the most promising areas in the centre of Riga,” said Frode Gronvolds, Chairman of the Board at Linstow Baltic. THE DEVELOPMENT OF SKANSTE focusing on office premises, but including CHANGES DURING LOCKDOWN CONTINUES retail, services and residential functions, The City Development Department of About 40% of next year’s office as well as premises designed for public Riga has secured a long-term lease development is planned to take place entertainment. of the Riverside Offices, which offer a in the Skanste area. In addition to that, Linstow Baltic confirmed its long-term great view of the Daugava River. The Linstow Baltic has concluded a 10.5 strategic goal to be the consolidation of lease term is set for 5 years, with the million EUR deal with NP Properties Group, its position in the Latvian market and possibility of extending that period to acquiring the Sporta 2 quarter with the continued development of real estate 12 years. The Class B Riverside Offices aim of developing a modern, high quality, projects in various segments. was commisioned in 2020. Most of the multifunctional urban environment, premises are currently leased out. Project: Z-Towers Developer: S.P.I. Group Macro Indicators of Latvia Source: Statistics of Latvia Social Indicators of Latvia Source: Statistics of Latvia Percentage 6, 5 Percentage 8, 1 8, 3 97, 3 10 3, 32, 0 2, 9 6, 2 6, 5, 0, 1 25 7 5 -3 ,6 20 0 15 10 -5 5 -10 0 -15 -5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F GDP HICP F - forecast Central Bank of Latvia Unemployment Gross Wage F - forecast Central Bank of Latvia 4

RIGA OFFICE OUTLOOK, 2021 H1 RIGA OFFICE MARKET “92% of the Printful team expressed their wish to return to the o ce on a full or part-time basis. An o ce located in the city centre will allow a large number of employees to work closer to their places of residence,” said Printful CEO and co-founder Dāvis Siksnāns. Office Stock Source: Newsec Vacancy Rate Source: Newsec Thousand, sqm Percentage 25 900 13 % 800 20 700 11 % 6% 1% 5% 600 15 10 500 400 300 200 5 100 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 F 2 022F 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Q2 Existing Stock Additional Stock A Class B Class 5

RIGA OFFICE MARKET RIGA OFFICE OUTLOOK, 2021 H1 “After the pandemic, physical offices will continue to play an important role in terms of collaboration, mutual learning, and creating value together,“ said Rūta Jasiulionienė, SEB’s manager of business services centres in Riga and Vilnius. OFFICE DEVELOPMENT IN RIGA IN 2021-2024 SEB Group’s business services centre in Riga has signed an agreement with the Period Developer/Owner Project Office area, sqm real estate developer GALIO Group to 2021 move its office to a newly constructed 2022 Baltic RE Group The Icon 9 150 business centre GUSTAVS at Gustava Barona Kvartāls Brīvības 155 3 000 Zemgala gatve 73 in the first half of 2023 Vilia Investments Hallo 4 500 2023. SEB will occupy roughly the same 1 650 area as it does now at Valdlauči (11,000 2024 Lords LB Preses Nama kvartāls, Stage I 99 000 sqm), which accommodates more than Kapitel ELEMENTAL Skanste, Stage I 25 000 a 1,000 employees. SEB claims the deal Confidential Office Building 20 500 was long-anticipated and hopes that Capitalica Verde Rīga, Stage I 20 000 it will facilitate bringing its Riga teams Pillar Capital New Hanza 15 000 under one roof in a modern, highly LNK Properties Valdemāra Biroji 12 000 motivating work environment. 6 500 Galio Group Gustavs 134 300 Local investor Vilia Investments has Vastint Business Garden Rīga, Stage II 40 000 commenced renovations on the historical Novira Capital Novira Plaza 27 500 telephone exchange building at Barona Eastnine The Pine 20 000 69 with the aim of transforming it into Capitalica Verde Rīga, Stage II 15 600 a modern 1,600 sqm boutique office Confidential Balasta dambis 15 000 complex. Prior to renovation, the building Mukusals Biznesa Centrs Zeiss Biroji 12 000 was home to a commercial gym. The 4 200 new office will be easily accessible by Vastint Business Garden Rīga, Stage III 61 100 all types of public transportation from Kapitel ELEMENTAL Skanste, Stage II 28 200 various locations in the city. In addition, Eastnine Kimmel Quarter, Stage I 20 900 Vilia is currently working on three other 12 000 investments – two residential projects and one industrial-retail project. Source: Newsec Average Rental Rates Source: Newsec Office Stock by Class Source: Newsec EUR/sqm/month Thousand, sqm 14.0-16.0 9.0-16.0 14.0-18.0 900 EUR/sqm/month EUR/sqm/month EUR/sqm/month 800 700 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F A Class B Class Prime A Class B Class 6

RIGA OFFICE OUTLOOK, 2021 H1 NEWSEC ANALYSIS PRODUCTS Project: Z-Towers Developer: S.P.I. Group Office: Amber Beverage Group

NEWSEC ANALYSIS PRODUCTS RIGA OFFICE OUTLOOK, 2021 H1 NEWSEC MARKET REPORTS REQUEST ANY REPORT research@newsec.lt Thanks to Newsec comprehensive knowledge we are able to offer a number of analysis and segment market reports which give you a valuable summary of the property market. Newsec Property Outlook, Vilnius Office Outlook, Riga Office Outlook, Spring 2021 2020 Q4 2020 H2 Kaunas Office Outlook, Tallinn Office Outlook, Baltic Office Outlook, 2020 H2 2019 2019 Baltic Property Outlook, Baltic Investment Outlook, Newsec Property Outlook, 2020-2021 2019 Autumn 2020 Access Newsec’s market report portal here: www.newsec.lt and www.newsec.lv

RIGA OFFICE OUTLOOK, 2021 H1 RIGA OFFICE MARKET THE FULL SERVICE PROPERTY HOUSE IN NORTHERN EUROPE Newsec — The Full Service Property the Baltic countries in 2009 and across the seven Nordic and Baltic House in Northern Europe — is by far Denmark in 2016. The Norwegian asset countries. Newsec has approx. EUR 65 the largest specialised commercial and property management companies billion under management and annually property firm in Northern Europe. First Newsec Asset Management and signs lease agreements of approx. TM Partner were acquired in 2012. In 1.6 million square meters, transactions Newsec manages more properties and 2013, Newsec acquired Jones Lang of some EUR 7.6 billion and does real carries out more transactions, more LaSalle’s Swedish property management estate valuations with an underlying lettings and more valuations than operation. In 2017, Newsec grew property value worth almost EUR 188 any other firm in Northern Europe. with the acquisitions of Norwegian billion. Thanks to large volumes and Through this great volume, and the Basale and Danish Datea, further local presence combined with in-depth knowledge and depth of our various strengthening the position within understanding of a range of operations, we acquire extensive and Property Asset Management. In 2018, businesses, Newsec has a unique detailed knowledge of the real estate Newsec opened a London office to assist expertise of the real estate market market. In turn, we can quickly identify international investors interested in northern Europe. business opportunities that create in the Nordic and Baltic region. added value. Newsec was founded in 1994 and is Our prime market is Northern Europe, today a partner-owned company with but through our alliance membership some 2,000 co-workers, spread with BNP Paribas Real Estate, we offer our services on the global market. This OULU makes Newsec Northern Europe’s only full service property house, and TRONDHEIM provides us with a unique ability to forecast the future. BERGEN TAMPERE A history of growth OSLO HELSINKI Newsec is the result of a unique history STOCKHOLM of growth, characterised by constant originality of thinking. The first TALLINN issue of the comprehensive market analysis, Newsec Property Outlook, was published in 2001. The Group expanded internationally into Finland in 2001, Norway in 2005, GOTHENBURG RIGA AARHUS KLAIPEDA COPENHAGEN MALMÖ KAUNAS VILNIUS 9

CONTACT AND ADDRESSES RIGA OFFICE OUTLOOK, 2021 H1 CONTACT AND ADDRESSES More analytical information at Newsec: Newsec in Latvia: LATVIA Head of Strategic Analysis, Chairman of the Board, Newsec in Latvia Vesetas Street 7 Newsec Advisory in the Baltics Girts Grinbergs LV-1013, Riga Mindaugas Kulbokas Cell +371 2942 4847 Phone +371 6750 84 00 Cell +370 652 10556 E-mail g.grinbergs@newsec.lv E-mail info@newsec.lv E-mail m.kulbokas@newsecbaltics.com www.newsec.lv Office solutions at Newsec: Real Estate economist Tenant Consulting ESTONIA Inita Nitisa Head of Corporate Solutions Roseni str. 7 Cell +371 254 97 060 Martynas Babilas EE-10111 Tallinn E-mail i.nitisa@newsec.lv Cell +370 616 12216 Phone +372 664 5090 E-mail m.babilas@newsec.lt E-mail info@newsec.ee www.newsec.lt/en Office FIT-OUT Service Head of Project Management LITHUANIA Tadas Grincevicius Konstitucijos ave. 21C Cell +370 679 79779 LT-08130 Vilnius E-mail t.grincevicius@newsec.lt Phone +370 5 252 6444 E-mail info@newsec.lt Office Care and Property Management www.newsec.lt Head of Office Management Group Justas Bandza Cell +370 6555 8989 E-mail j.bandza@newsec.lt