Inreal analysts: the liquidity of new construction apartments in the 1st quarter of 2013 was the highest since the emergence of the crisis
May 9, 2013. Vilnius. Otherwise than usually the real estate market of Lithuania was exclusively active in early 2013. The review, prepared by Inreal analysts, states that the amount of transactions in the housing sector has been increasing, and the commercial sector has faced the decreasing amount of vacancies, further development of new projects, and growing rental prices.
In the first quarter of this year 550 new apartments were sold in the primary housing market in the largest cities of Lithuania. In comparison with the first quarter of the previous year, the amount of transactions made was higher by 53 percent, and in comparison with the last quarter – by 7 percent. In the first quarter the majority of apartments, i.e. 450, were sold in Vilnius. That means by 62 percent more, than in the corresponding quarter of 2012.
“Regardless of new emerging projects, the overall supply of new construction apartments in the first quarter, in comparison with the last one, has shrunk to approximately 2700 unsold apartments, and the monthly liquidity of new construction apartments in Vilnius has reached 6 percent – the highest limit since the emergence of the crisis”, –states Arnoldas Antanavičius, the Manager of Consultations and Analysis Department of Inreal. According to him, this shows that the market is growing and becoming capable of absorbing the increasing amount of projects. “The growing supply has no negative impact on the market, because sales are also increasing, and the liquidity of the market is the highest since the emergence of the crisis”, – states A. Antanavičius.
The coastal region has also showed an increasing activity. In the first quarter 44 new construction apartments were sold in Palanga, and 9 apartments in Neringa. In comparison with the first quarter of 2012, the growth has reached 83 percent in Palanga, and in Neringa the growth was even triple higher.
In the first quarter the amount of vacancies in the sector of business centres was decreasing in all three largest cities. Rental prices increased by 1-2 LTL in some certain segments. Active investments into this segment in Vilnius are continuing – the construction of two business centres comes to an end, and three more business centres were launched. The latter will complement the market by approximately 40,000 sq. m. of area for rent. The business centres currently in the final stages of construction in Vilnius are almost fully rented, and the movement into the new business centres will be available not earlier than in 2014, therefore further decrease in the amount of vacancies and a moderate growth of rental prices are expected in Vilnius.
The demand of modern business centres in Kaunas is growing – vacancies have shrunk to 4.2 percent. In the first quarter the growth in rental prices was noticed in B2 Class segment. It seems that due to no new supply there is a great chance for further growth of rental prices in the market. Meanwhile the number of vacant premises in Klaipėda has remained nearly unchanged during the quarter, while vacancy rate remains the highest in Lithuania, i.e. 13.7 percent.
The segment of shopping centres has been growing in all the largest cities. Retail trade volumes in the first quarter increased by 5.5 percent and reached approximately 2.73 milliard LTL in a month at an average. In 2013 it is expected to launch the development of at least 3 new large shopping centres in Lithuania. A considerably larger amount of smaller shopping centres with an area of up to several thousand square meters should be developed.
The developers are actively looking for small commercial land plots to build shopping centres with up to 3,000 sq. m. size. Active development of this segment is related to the networks of retail trade in the country and the policy of their development.
Low supply of vacant premises in the country allows the managers of shopping centres slightly increase in rental prices for new lessees. A similar trend in the shopping centres of the country should remain in the nearest future.
Lithuanian industry sector has continued to grow in the first quarter of 2013. The volumes of both the industrial production and export have been growing. Respectively the development of the market of storage facilities has continued.
Vacancies at modern centres of logistics in the largest cities of the country had a slight increase at the end of the first quarter of 2013, however they remained particularly low. Vacancies in modern centres of logistics in Vilnius increased to 2.2 percent (8,200 sq. m.), the rate in Kaunas remained almost 0 percent, and the rate of vacant premises in Klaipėda reached 2.6 percent (2,000 sq. m.).
“It is noted that companies are investing into acquisition or renovation of old construction production facilities or are building new warehouses for their own use – built-to-suit –, thus aiming at optimization of rental costs“, – says A. Antanavičius. According to him, the most demanded objects are facilities with an area several thousand square meters.
The changes in prices in the segment of logistics were minimal in the quarter. Price rates have remained stable in Vilnius and Klaipėda, while the price rate in Kaunas increased by one Litas at an average.
According to Inreal analysts, low vacancies should encourage the owners of centres of logistics to raise rental prices slightly. On the other hand, in case of higher rental prices, the lessees become more interested in having their own warehouse, thus decreasing rental costs and avoiding possible increase in prices in the future, therefore it is likely that the increase in rental prices in storage market will slow down.
ABOUT INREAL GROUP
Inreal Group, which consists of JSC “Inreal Valdymas” (Inreal Management), JSC “Inreal”, JSC “Inreal Pastatų Priežiūra” (Inreal Building Maintenance) (related to companies, administering apartment houses) and JSC “Inreal GEO”, provides the widest spectrum of services in Lithuania, related to real estate and building maintenance services. Companies of Inreal group belong to SC Invalda. More than 300 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, the value of asset, evaluated per year, is reaching 2 milliard Litas, and the area, administered by companies of building maintenance sector – 1 million sq. m. Company offices or representations are operating in Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Mažeikiai, Alytus, Plungė, Šilalė and Utena.
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