«There is a lack of offices for big companies in Vilnius». An expert on Lithuania’s office market 2022

«There is a lack of offices for big companies in Vilnius». An expert on Lithuania’s office market

The world is changing: borders expand, new opportunities turn up, and perspectives are where no one would ever think to look for them. Many companies have now decided to relocate, and Lithuania has become one of the most popular destinations. In spring, we have already prepared a long series of materials on the commercial property market in this country — you can find it here. But time has passed, and now realting.com has decided to ask an expert: What is new about the office and commercial property market? What should companies who are still thinking about relocating should be prepared for?

«Companies have to be prepared for strict inspections»

In May, Julia Tyslenko, head of the Capital Commercial office, mentioned that foreign companies from the European Union and America have practically no difficulties in relocating companies to Lithuania. 

— To register a CJSC (Closed Joint Stock Company) in Lithuania you only need the minimum capital of €2,500. Then, you have to submit the necessary application to the registration centre, hire a CEO and find a commercial property to make an office (where your company will be registered). In this case a company can be started in just 4-5 days. In the end all you need to do is start working. 

At the same time, companies from Russia and Belarus are expected to have a number of restrictions and prohibitions:

— It is no secret that after February 24 it has become much more difficult for companies from Russia and Belarus to register a CJSC and rent premises in Vilnius. However, there are very few truly hopeless cases — just recently we have successfully completed the case of a relocation of a company with Russian and Belarusian capital. Despite numerous inspections and a very scrupulous examination of all the documents, the offices in Lithuania were opened and started operating. 

At the same time, new companies that are just entering the Lithuanian market need to be prepared for strict examinations in order to find out who is the final recipient of dividends. If the capital is directly related only to Russia, it is practically impossible to place such a company in Lithuania at this stage.

«Even projects that had been suspended for a long time due to the pandemic are launched»

However, not only do you need to register a company, you also need to find an office space. According to Julia, the constant flow of foreign companies has changed the market, and it is no longer possible to locate a business cheaply:

— As for commercial rental prices, the market can be roughly divided into two categories: those that have increased rental prices and those that have left prices unchanged or increased them slightly.

Office premises that are located in business centres that have been built a long time ago or are about to be completed can usually be rented for 12-13 euros/sq m. If they are «„B“» class offices, they will cost around 10-12 euros/sq m, and «„A“» class offices will cost 14-16 euros/sq m. B-class offices usually cost around EUR 10-12 per sqm, and A-class offices around EUR 14-16 per sqm.

Those business centres that are now actively being built were forced to increase their rental prices because the prices of construction materials, labour and logistics have gone up a lot. 
For example, the Sky Office project, which is located at the crossroads of the bypass road and Pylaite Avenue, will rent premises for 15-15.5 euro/sqm. Not long ago this price would not have risen above 12-13.5 EUR/sqm, but after all the calculations it became obvious that such rental would simply be unprofitable. 

Also in Vilnius, there are several significant facilities that have already been built but are now actively involved in the GoGreen program: reusing water, converting solar energy into electricity, etc. The cost of renting offices in such locations has increased recently because the demand for them has increased as well. As a result, it is possible to rent an office space in such buildings for 16-18 euros per square metre.

At the same time, more and more offers of offices are appearing on the market at once with renovation and furniture — a kind of universal ’turnkey’ option. For small companies or start-ups, this is a really great way to save time and money, and for business centres it is a way to attract new clients. On the other hand, large companies are already short of offices in Vilnius — almost all of the large premises are already rented by those companies which had to leave their countries for various reasons. To give you an example — the largest Wargaming and IItechart Group moved here from Belarus and they rented offices of 6,500, 2,600 and 1,500 square metres.

Those companies that have been in the market for a long time are being optimised by choosing a hybrid way of working for their employees — now you don’t have to be in the office all the time. This has led to the fact that companies which used to rent several thousand square metres have moved to more modest premises. Those who can move, of course, choose new premises, and those for whom the contract does not give such opportunities have started sub-renting. Right now we are involved in several such deals at once, and it is quite a time-consuming process, because the subtenant has to suit not only the main tenant, but also the owner of the premises directly. 

As a result, high demand has even helped projects that have been paused for a long time due to the pandemic to start working. For example, Hero and Flow are already under construction on Konstitutsii Street in the former market areas. These will be modern commercial and office spaces, meeting the highest requirements of tenants. But they will also cost at least 19, or even 20 euro per square metre. Another frozen project, BH Meraki, is about to be completed. 

To sum up: the Lithuanian commercial property market was able to adapt quickly to the changing world, and it has become a real growth point for businesses. 

Information provided company Capital Commercial
Number of properties: 16
Number of publications: 14
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