Baltic Logistics & Industrial Outlook, 2023 Q2

Building: Solo Stock office Logistics & Industrial Developer: Restate Outlook Baltic States, 2023 Q2

Vilnius Logistics & Industrial The rental market is very quiet. 2023 Q2 Is it temporary? Key Indicators Q-o-Q Y-o-Y Forecast Supply 951 200 sqm - New supply during Q2 2023 was very low, labour market and negatively affect export. 4 000 sqm so tenants can only sign future leases for - The supply of stock offices is not growing Stock now. Individual subletting opportunities very fast, and vacancy stands at around New supply 178 600 sqm are emerging in the market, but there are 12%. Developers are continuing to take on Under construction still very few options available. stock office projects and determined to 1.0 % - Very low warehouse vacancy and a small boost supply more rapidly. Concepts for Vacancy 0.5 % number of new leases are holding back new projects may change notably during changes in rental prices. construction, in line with the rental Prime 4.8-5.7 €/sqm - Construction prices have stabilized but process and tenant mix. Total remain high and continue to pressure 7.00-7.50 % developers to find creative approaches. \"Different industrial Rent rates 8.00-8.50 % Modern solutions, meeting sustainability market segments show requirements and a choice to \"invest now Prime and get a return later\" are reflected in new varying business projects investment budgets. development paths\" Yields - While general export statistics are not encouraging, Lithuanian exports and Prime imports of consumer goods are still Secondary growing, at a pace of slightly more than 13% in Jan-May. Consumer sentiment remains among the best in the region with very little variation. Unfortunately, the slowing of manufacturing, especially in the furniture segment, will bring anxiety to the Kristina Zivatkauskaite Senior Analyst [email protected]

Tallinn Logistics & Industrial 2023 Q2 Key Indicators Industrial sector is facing hard times Q-o-Q Y-o-Y Forecast Supply 1 452 400 sqm - Production volumes have been declining - Ericsson is planning to build a new 0 sqm for almost a year now. In this time, technology centre by the beginning of 2026 Stock numerous companies have stopped to bring all its units under one roof. The New supply 60 700 sqm production either temporarily or centre, with a total of about 50 000 sqm of Under construction permanently. Companies that export to space, will be in Ülemiste City. 2.0 % Nordic countries are having the hardest Vacancy 4.4 % time. \"Industrial sector faces tougher times Prime 5.1-6.5 €/sqm - Vacancy levels for logistics properties amid freeze of Nordic Total rose slightly in Q2 and further increases 6.75-7.25 % are expected as consumption and export market\" Rent rates 8.00-9.00 % production volumes are down. Prime - The stock office segment is still active despite a longer sale time and higher Yields vacancy. In H2 2023, about 22 000 sqm of new space will be constructed. Prime Secondary - The Gate Tallinn technology park is developing quickly. Three logistics and industrial projects are due to be completed in 2023-2024. Companies newly relocating to Gate Tallinn include Makita, Rimi and Solina. Mihkel Männik Analyst [email protected]

Riga Logistics & Industrial 2023 Q2 Key Indicators Industrial space is in demand Q-o-Q Y-o-Y Forecast Supply 1 491 600 sqm - Almost 57 000 sqm of high-quality - Q2 2023 saw three investment 56 700 sqm industrial space was delivered to the transactions, of which two were in the Stock 70 560 sqm market in Q2 2023. VGP delivered a industrial segment. Capitalica bought the New supply built-to-suit logistics centre with Eugesta as Ulbrokas 42G stock office from a local Under construction 1.0 % the main anchor tenant, while Sirin developer. The size of the property exceeds 3.2 % finalized the third phase of the Rumbula 5 500 sqm. Meanwhile, an East Capital fund Vacancy Logistics Park with about 28 000 sqm of acquired the U30 stock office from Hepsor. 4.7-5.7 €/sqm space. That now brings the total area of the The stock office with over 3 600 sqm was Prime Rumbula park to over 80 000 sqm. built last year. Total 7.00-7.25 % - A few large developers are handling most 8.00-9.00 % industrial space development. One reason \"A few strong Rent rates for that may be the limited availability of industrial players are land and those players large initial Prime investments to acquire land well in developing the advance of the start of construction on market\" Yields projects. - Built-to-suit projects are in demand and Prime increasing in popularity. That is beneficial Secondary in many ways for both developers and tenants. - The overall level of vacancy on the industrial market fell a slight 0.2%-points to 3.2%. Vacancies at the best properties remain low, usually not exceeding 1%. Inita Nitiša Real Estate Economist [email protected]