Colliers International: Lithuanian warehouse market racing ahead (LT)

By the end of first half of 2007, the total stock of industrial premises in the Vilnius region was estimated at approximately 240,000 m². The construction of more than 150,000 m² of industrial premises over the next 2–3 years has also been announced.

Due to its favorable geographical location, the Kaunas region is expected to become more and more interesting to potential developers and investors. But it is still running behind Vilnius and Klaipeda in respect to the supply of new industrial premises. Beginning with the launch of the first Kaunas Terminal warehouse in Kaunas Free Economic Zone (FEZ), the largest industrial space growth in 2007 is expected in Kaunas. Over 50,000 m² of industrial space are expected to be made available by year's end.

The supply of leasable warehouse premises in the Klaipeda region is estimated to reach approximately 40,000 m² by the end of the first half of 2007. Over the next two years, growth of 100,000 m² is expected in the Klaipeda region's industrial premises market. This new supply would increase the total stock 2.5 times.

The primary demand is still being created by retail chains, 3PL providers, manufacturers, distributors, and importers of home appliances, construction materials, and similar goods. The main criteria in project selection still appear to be location and an acceptable rent rate.
The demand for leasable premises contributed to the low number of build-to-suit projects. Logistics companies and foreign companies, which offer 3PL services and are planning to expand into the Lithuanian market, are both active.

There have been no material changes in the rent rates for industrial premises over the first half of 2007. Retailers' plans to develop build-to-suit projects are expected to greatly affect vacancy rates. There is less room for negotiating the rent price. The gap between the asking and contracted rent rates is narrowing.


There is a tendency for logistics companies to rent premises.
The gaps between the minimum and maximum rent rates are narrowing.
More owners are thinking about investment and sale lease back deals, which are being proceeded after putting all efforts to improve cash flows.
Due to the fast growth of the warehouse space supply in Kaunas, Klaipeda and Panevezys regions, Vilnius city's share in the total stock of industrial premises is shrinking.
Due to the rapid growth of supply in Klaipeda district, few possible near future developments will be postponed.

Source: Colliers International

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