Vilnius Office Outlook, 2021 Q3

VILNIUS OFFICE MARKET 2021 Q3 Short overview www.newsec.lt FOLLOW US Photo: Business Garden Vilnius, Lithuania

VILNIUS OFFICE MARKET, 2021 Q3 RECORD QUARTER IN OFFICE LETTINGS HISTORY SUPPLY Total Stock 2021 Q3 2021F New Area PQ/PA VACANCY 884 300 m2 950 000m2 TAKE UP Growth yoy 13 000m2 106 300m2 RENT RATES, 2021 Q3 Class A 10.9% 12.6% ECONOMIC INDICATORS Total 2021 Q3 2021F 4.3% 5-6% www.newsec.lt Area 5.3% 8-9% Vs.5y ave 2021 Q3 2021F 55 560 m2 115 900 m2 249% 132% CLASS A CLASS B 16-17.5¤ 10-14¤ GDP 2020 2021F Unemployment HICP -0.9 % 4.3 % Wages 8.5 % 7.4 % 1.1 % 3.4 % 10.2 % 9.0 % Source: Ministry of Finance; F - forecast 2 FOLLOW US

TAKE UP EXCEEDS FORECAST AND HITS 100K SQM IN Q3 Large lease deals were inked by Girteka Logistics, Teltonika, Asseco Lietuva, 3 institutions subordinate to the Ministry of National Defence, and Enterprise Lithuania, a public institution subordinate to the Ministry of Economy and Innovation. The total area of leases signed during the third quarter reached 55 560 sqm. TAKE-UP IN VILNIUS Source: Newsec Thousand, sqm LOGISTICS COMPANIES AND THE PUBLIC 120 SECTOR DRIVE OFFICE DEMAND Large tenants dominated the market with 100 5-YEAR AVERAGE transactions of more than 1 000 sqm taking up to 60% of leased area. Among the tenants that 80 stand out are logistics companies and public sector institutions followed by finance and IT 60 segment, that continue to remain very active. 40 20 0 2017 2018 2019 2020 2021 2016 Q1 Q2 Q3 Q4 Forecast TWO THIRDS OF THIS YEAR‘S SUPPLY FIT-OUT DELIVERY EXPERIENCES SHORT- DELIVERY IS SHEDULED FOR Q4 TERM DELAYS Three out of five projects planned to be The average office fit-out projects have been delivered in Q4 have reached close to 100% extended from 3 months to 6 months. Delayed occupancy during Q3. The remaining projects supply deliveries may be seen in large, are expected to be leased out gradually. especially single-tenant projects. Therefore, total market vacancy will increase. INCREASING DEMAND AND DEVELOPMENT VACANCY DECREASED, AGAIN COSTS PUT PRESSURE ON RENTS Overall market vacancy fell from 6.6% to 5.3% Increased asking rent rates expected to be during the third quarter, while vacancy across seen in new office lease offers. With growing the Class B segment declined even more tension in the construction market coupled significantly, from 8.1% to 6.2%. with higher demand, landlords feel pressure to increase rent. COMPETITION FOR TALENT AMONG THE MAIN DRIVERS OF RENTAL MARKET Competition for talent and therefore willingness to provide high quality working environments is one of the key drivers accelerating Vilnius office market continuous growth. www.newsec.lt FOLLOW US 3 3