Riga Office Outlook 2022 Q1

RIGA OFFICE MARKET 2022 Q1 Short overview www.newsec.lv FOLLOW US

RIGA OFFICE MARKET, 2022 Q1 DEVELOPMENT CONTINUES IN RIGA OFFICE MARKET SUPPLY Total Stock 2022 Q1 2022F New Area Q/Y 766 000 m2 787 000 m2 - 21 000 m2 2022 Q1 2022F VACANCY Class A 12.7% 12.4% TAKE UP Total 11.6% 12.9% 2022 Q1 2022F Area 16 000 m2 52 000 m2 RENT RATES, CLASS A CLASS B 2022 Q1 ECONOMIC 14-18¤ 9-16¤ INDICATORS 2021 2022F www.newsec.lv GDP 4.8 % 1.8 % Unemployment 7.6 % 8.1 % HICP 3.2 % 9.5 % Wages 11.7 % 9.7 % Source: Statistics of Latvia, Bank of Latvia 2 FOLLOW US

DEVELOPMENT CONTINUES IN RIGA Although in Q1 2022 no new office space was delivered, many sizable objects continued their development. Meanwhile existing office objects improved their office quality as with rising prices the aspect of maintenance costs becomes essential. NEW DELIVERY TAKE-UP IN RIGA Source: Newsec The coming two years will bring a substantial Thousand, sqm amount of new office space to the market, both class A and class B. That will allow tenants to 70 choose among high-quality offices constructed in 60 keeping with the latest standards. 50 The new offices will attract new companies to 40 Latvia although will also increase vacancy in the 30 market for existing office space. 20 Take-up in 2022 is forecast to reach almost 52 10 000 sqm, with pre-lease transactions accounting for a significant part of that. 0 2016 2017 2018 2019 2020 2021 2022F VERDE IS IN DEMAND RISING COSTS SPOTLIGHT ENERGY-SAVING BUILDINGS The construction of Verde's first stage is going speedily and the second stage was already started in Consumer prices were 11.5% higher in March January 2022. The project is highly attractive with 2022 than a year earlier – the biggest increase in its green, office-oriented location and adherence to prices in 26 years, driven largely by skyrocketing BREEAM Excellent and nZEB (nearly Zero-Energy energy prices. Building) standards. Its two buildings will have a total In that light, advanced energy-efficiency solutions net leasable area of around 30 000 sqm. The first for new and existing offices are coming into sharp building is scheduled for delivery in June 2022, with focus. Tenants increasingly are seeking not just more than 8 000 sqm already pre-leased in Q1. affordable rental rates but also reasonable utility bills and management fees. PRESES NAMA KVARTĀLS IS ON SCHEDULE STRIVING TO IMPROVE The first stage of the BREEAM Excellent-certified Preses Nama Kvartāls developed by Lords LB Amid the increasing focus on being green and remains on schedule. Its fantastic views of the city energy-efficient, existing office projects are also and the Daugava, as well as proximity to the city striving to enhance the quality of their buildings and centre will be irresistible for tenants. Special the well-being of tenants. In 2022 Q1 Citadele attention is being paid to energy efficiency, the use Business Center owned by Lords LB Asset of sustainable, nature-friendly building materials, Management, has been awarded with the BREEAM and the creation of a healthy and accessible In-Use standard “Excellent” level certificate. The environment. By the end of Q1 2022, the office obtained standard shows that the Class A office building had reached a height of 5 floors and glazing building meets the highest requirements for energy had started. It will be ready to welcome new tenants efficiency and sustainability. Since the purchase of already next year. Meanwhile, in early 2022 a the business center in 2020, improvements in the building permit was received for the second stage of water supply and ventilation system have been the Preses Nama Kvartāls. implemented. Closed electric scooter sheds and car charging stations have been installed. www.newsec.lv 3 FOLLOW US