Baltic States Logistics & Industrial Outlook_print

Baltic States, 2022 Q3

Vilnius Logistics & Industrial Industrial and logistics space is currently 2022 Q3 scarce Key Indicators Q-o-Q Y-o-Y Forecast Supply 930 800 sqm - The industrial segment was temporarily buyers is expected to benefit the logistics 25 200 sqm impacted by changing logistics patterns sector amid continuing geopolitical Stock between East and West, bringing a uncertainty and supply chain issues. New supply 105 900 sqm short-term increase in the market vacancy. - Construction costs and project Under construction - Supply increased mainly through timescales have increased. Financing is 1.1 % built-to-suit or built-to-own development in harder to get as well. Still, experienced Vacancy 0.8 % Q3 2022, with only one project – the J55 developers are showing the courage to Logistics Centre – completed on a purely continue building new speculative Prime 4.7-5.5 €/sqm speculative basis. That project s first phase projects, which remain in demand. Total was leased to large and medium-sized 6.75-7.25 % tenants, and details were announced to \"Rising costs are Rent rates 7.50-8.50 % develop the project further. making tenants - Small industrial tenants who often feel Prime left out in the market have gotten a new rethink warehousing supply of “stock offices” recently. Thus options\" Yields companies looking for retail, office and warehouse space in one place, with good Prime visibility and access, have options to Secondary choose from. Actual demand and price levels will be determined next year, when more new space is set to become available. - As the economic situation worsens, a pause in retail and e-commerce demand is expected. But the trend of moving closer to Kristina Zivatkauskaite Follow us Senior Analyst [email protected]

Tallinn Logistics & Industrial After the initial shock of war, strong 2022 Q3 companies have continued business as usual Key Indicators Q-o-Q Y-o-Y Forecast Supply 1 442 600 sqm - By the end of Q2 2022, sales in the - After an initial shock when the war 5 550 sqm manufacturing sector were up 28% year on against Ukraine began in February, Stock year. Similarly, revenues in the storage and well-managed companies that are not New supply 40 600 sqm warehouse sector were up 16%. Still, given affected by sanctions have continued Under construction the significant price increases in the business as usual. 1.3 % period, the real growth rate was slower Vacancy 3.6 % than those high nominal figures suggest. \"The looming winter - Amid rising construction prices, the and energy crises have Prime 4.8-5.5 €/sqm average rent for modern warehouse space made some developers Total increased in Q3 compared to 2021. 6.75-7.25 % - Recent years have seen the construction more cautious\" Rent rates 7.50-8.50 % of new buildings with small industrial and storage areas. Demand for such premises Prime existed for years, while supply was extremely small. Yields - E-commerce has been developing very quickly in recent years, which has Prime increased demand for warehouses and Secondary especially stock office type buildings. E-commerce sales almost doubled from H1 2019 to H1 2022. Mihkel Männik Follow us Analyst [email protected]

Riga Logistics & Industrial Development has slowed but not stopped on 2022 Q3 the logistics and industrial market Key Indicators Q-o-Q Y-o-Y Forecast Supply 1 380 000 sqm - The market has slowed and is quieter - In an industrial market investment deal 51 400 sqm than it was last year, though previously in Q3 2022, Sunshine Comma Baltic sold Stock 80 000 sqm planned projects continue to develop. Two the M rupe Smart Park stock office to New supply projects completed include stage II of the Capitalica Asset Management. Under construction 1.0 % Ulma a Parks, which Piche started in 2021, 3.8 % and stage II of the Rumbula Park, which \"Old, highly Vacancy Sirin started in 2019. These projects added energy-consuming I&L 4.2-5.0 €/sqm more than 50,000 sqm of warehouse and Prime logistics space to the total supply even as objects face high risk Total 6.75-6.90 % demand for non-essential goods is of a significant rent 7.50-7.90 % decreasing. decrease\" Rent rates - Like in other segments, demand is strongest for properties with high energy Prime efficiency and low utility costs. This factor is even more critical for the industrial and Yields logistics (I&L) segment, where utility bills are getting closer in size to rent payments. Prime Thus, demand for properties with no or Secondary low heating consumption will not be affected by a downturn. - Two large and one small facility are now under construction, for a total of about 80,000 sqm of modern I&L space which will be supplied already this year and next. Inita Nitiša Follow us Real Estate Economist [email protected]