Lithuania

Market characteristics

Stock & vacancy evolution in Lithuania

Stock & vacancy evolution in Vilnius

The I&L market in Lithuania spreads across the largest markets of the capital city Vilnius, the second biggest city Kaunas and the port city Klaipeda. In connection to the strategic geographical location of the country, a significant portion of the stock is occupied by companies engaged in logistics.

The industry has received significant attention in recent years, observing steady growth and significant greenfield FDI. Among them are high-profile companies, including Continental Automotive, Hella, and Hollister Incorporated. This is associated with a favourable and business-oriented environment, encompassing well-developed infrastructure, qualified talent, strong work ethic, competitive costs, and attractive conditions, especially in the seven Free Economic Zones of the country.

To facilitate the establishment processes for new entrants, novel concepts are being presented in the Lithuanian market, such as industrial properties for lease allowing a quick set up for investors. The current, moderate level of saturation indicates good potential for new development.

Supply & vacancy

At the end of H1 2020, the total stock of modern industrial space in Lithuania reached 1.05 million m2 , of which 49% (513,100 m2 ) is located within the Vilnius Region. During the first six months of 2020, the Lithuanian I&L market grew by 63,200 m2 of new space, which was over four-times more than in the same period of 2019 (11,700 m2 ). At the end of June 2020, a further 102,400 m² of space was under construction, more than half of which (57,000 m2 ) is located in the Capital City market. New speculative supply has slightly increased the overall warehouse vacancy level to 4.5% at the end of June 2020.

Rental rates & lease conditions

In H1 2020, prime warehouse rental rates experienced a slight downward pressure in connection to the global pandemic. As a result, rates ranged between EUR 3.2-4.7/m2 /month at a country level, with the highest being recorded in Vilnius (EUR 3.8-4.7/m2 /month). Average lease lengths in Lithuania are 3-5 years (logistics/warehousing) and 5-7 years (production/ manufacturing). Developers offer some incentives in the form of up to 2 months rent-free per total lease period.

Outlook

Attractive lower rental rates are expected to activate the lease market, stimulating the relocation of tenants to better quality premises. In addition, the sector remains robust to the negative effect of pandemic, partly thanks to the rapidly growing e-commerce sector.

Top 5 lease agreements