In the first half-year of 2013 sellers have gained stronger positions in the RE “purchasers’ market”

August 21, 2013. In accordance with Inreal
review, in the first half-year the demand in RE market was growing, while the
supply – decreasing. The first
half-year of 2013 was characterized by particularly active purchasers –
liquidity of new construction apartments in Vilnius market almost reached the
pre-crisis level. The capital city was also prevailing in the commercial real
estate segments, where not only vacancies have decreased, but also lease prices
have increased.

“The positions of “purchasers’ market”, which was
prevailing during crisis, are now becoming weaker – more and more negotiating levers
occur in sellers’ hands as a result of increasing demand and decreasing supply”, – states Arnoldas
Antanavičius, the Head of Consultations and Analysis Department of Inreal. According
to him, the first half-year of 2013 was characterized by significantly active
purchasers. 12,053 of apartment purchase-sale contracts were signed in Lithuania –
by 21 pct. more than in the same period in 2012. The increase was recorded in
new construction apartment segment as well – about 1,400 of new apartments were
sold – i.e. 48 pct. more that in the first half-year of 2012. During the first
half-year the sales of 29 new projects with more that 1,200 apartments were
started in Lithuania. In comparison with the corresponding period of the
previous year, the amount of new apartments, offered for the market, is twice
less.

According to Inreal analysts, liquidity of new
apartments in Vilnius market almost reached the pre-crisis level – selling off
the existing supply would take about 12 months. This rate is almost two times
better than a year ago. Housing market in Kaunas has also gained acceleration –
the amount of apartments sold in the half-year was 17 pct. higher than a year
ago. Investments in this segment were increasing – projects, suspended during
crisis, are being re-launched. “Coastal
resorts have also recorded the increase in new apartment demand: the amount of
new construction apartments, sold in Palanga, was higher by two-thirds, while
in Neringa – 8 times more than in the first half-year of 2012”, – states A.
Antanavičius. Only in Klaipėda the sales of
new apartments decreased by 20 pct., although the demand of old apartments were
increasing.

The increase in transactions in private house and land
plot segment was more moderate – in the first half-year of 2013 the amount of
registered transactions on purchase-sale of private houses in Lithuania was 5,008
and land plots – 17,070, i.e. respectively, 3.5 pct. and 9 pct. more than in
the first half-year of 2012. The most popular land plots were agricultural land
plots, which made up about 72 pct. of all transactions.

“Vilnius was prevailing in the commercial real estate segment. In the
first half-year of 2013 vacancies in business centres segment in Vilnius
decreased from 7.1 to 4.7 pct., lease prices averagely increased by 5 pct.”, – says A. Antanavičius. According to him, it
encouraged the emergence of new projects. At the end of the half-year, in
addition to five business centres, currently being under development, which
should supplement office market in Vilnius by approximately 40,800 sq. m. of
leasehold area, it is expected to start constructions of 3 new business centres
with 32,600 sq. m. of leasehold area. The implementation of these projects will
lead to the increase in modern office market in Vilnius by a fifth. As regards
not so active Kaunas and Klaipėda markets, people continue avoiding investments
in this segment. Vacancies in Kaunas decreased from 5.5 percent to 4.6 pct.
within the half-year, lease in lower-class office centres averagely increased
by 5 pct. In Klaipėda the trends were the worst – vacancies in modern business centres increased from
13.8 pct. to 15.9 pct., and the prices remained stable.

Trading volumes in the shopping centre segment
continued growing, vacancies were decreasing. The majority of new projects were
started in the capital city, however more active investment in this segment is
expected in Kaunas and Klaipėda in the nearest future. According to the
analysts, the emergence of new strong trademarks in Lithuania is significantly
enlivening the shopping centre lease market – almost always full major shopping
centres of the country are forced to terminated the contracts with weaker
lessees as a result of emergence of new and stronger lessees. Those weaker ones, in turn, are moving to the outlying shopping centers
where vacancies are also rapidly
decreasing. In the middle of the
year vacancies in Vilnius shopping centres reached 2.1 pct. (7,900 sq. m.), in
Kaunas – 2.0 pct. (4,050 sq. m.), and in Klaipėda – just 0.3 pct. (440 sq.
m.).

In the first half-year of 2013 the volumes of Lithuanian Industry
production and export continued to grow. The storage premises market continued
to develop, inconsiderable increase in lease prices was recorded. The amount of
logistics centres, developed for lease, was increasing in the capital city.
Vacancies in Vilnius reached 2.7 pct. (9,660 sq. m.), this rate remained close
to 0 pct. in Kaunas, while in Klaipėda – 1.3 pct. (1,030 sq. m.). In early 2013 the managers
of logistics centres were increasing lease prices for new lessees by 5-7
percent. The lease prices of modern logistics centres reached 12-17 LTL/sq. m. in
Vilnius, 11-15 LTL/sq. m. in Kaunas, and 10-15 LTL/sq. m. in Klaipėda. The average lease prices in old logistics
centres increased by at least one Litas within the half-year. The lease prices of such premises reached 6-10 LTL/sq. m. in Vilnius,
5-9 LTL/sq. m. – in Kaunas, and 5-8 LTL/sq. m. – in Klaipėda.

ABOUT INREAL GROUP

Inreal Group, which consists of JSC
“Inreal Valdymas” (Inreal Management), JSC “Inreal” and JSC “Inreal
GEO“, provides the widest spectrum of services in Lithuania, related to
real estate services. Companies of Inreal group belong to AB “Invalda
privatus kapitalas”. Around 90 employees are currently working in Inreal
group, the value of managed assets – about 400 million LTL, mediations
in lease or sale of 550 thousand sq. m. of commercial premises and 1150
apartments, and the value of asset, evaluated per year, is reaching 2
milliard Litas. Company offices or representations are operating in
Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Mažeikiai, Alytus,
Plungė and Utena.

More information
Rūta Merčaitienė
Head of Marketing and Communications
INREAL GROUP
Mob. +370 611 29 779
E-mail ruta.mercaitiene@inreal.lt