baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Latvia Retail Market
Retail Market
distribution of retail space
in riga by size
Retail Space Dynamics in
Riga
f - forecast
700
2
11
26
18%
45%
37%
Number of Units
% GLA of Units
5,000 - 15,000 sqm 15,000 - 45,000 sqm
45,000 and more sqm
OVERVIEW
The Latvian retail market had finally seen
positive movements in 2010 after more than
two years of negative trends. During the first
three quarters of 2010, real net wages in
Latvia grew by nearly 1 per cent and
employment by about 3 per cent since the
end of 2009 (seasonally adjusted). Based on
Swedbank’s economic research, residential
household deposits started to diminish in the
second half of 2010. Along with a rise in
consumer confidence this suggests that
households increasingly chose to spend
rather than save. This assumption is
supported by the fact that retail trade turnover
has been growing somewhat faster than
incomes (up by about 8 per cent in constant
prices during the same period). All these
factors considered, the indications point to an
optimistic outlook for the retail market
segment in the next years.
Notably, 2010 saw the opening of Galleria
Riga shopping centre, with a number of
outlets that were not previously presented in
the Latvian retail market.
Vacancy rates in successful shopping centres
and in top high street locations have
decreased in 2010 due to improved interest
in these locations from potential tenants.
Vacancy rates in shopping centres that have
problems with accessibility, concept or
management continued to increase.
Colliers International noticed slight increases
in rent rates for quality retail premises in
excellent locations. Tenants still hoped for
rent discounts in 2010, however, landlords
were not as flexible as they were in 2009.
SUPPLY
As of January 2011 the total shopping centre
supply in Riga amounted to 614 thousand
sqm. In 2010 the total supply of retail
premises in shopping centres has increased
by 29,700 sqm of GLA, largely due to the
opening of Galleria Riga - a multiple (7) floor
shopping centre that includes more than 100
shops, several restaurants, cafes, bars an ice
skating rink on the roof terrace and
underground parking with 120 lots.
Three retail projects with total GLA of
27,700 sqm will be commissioned in 2011: A
shopping centre developed by Homburg
Group in Zolitude, the shopping centre
Damme developed by Rimi Latvia and
Hypermarket Prisma, both located in Imanta.
All three retail objects will be located in
dense residential neighbourhood districts
and will have grocery supermarket as anchor
tenants: Maxima, Rimi and Prisma
respectively.
Larger scale shopping centre developments
have been postponed, until the market
situation improves.
DEMAND
Demand for retail premises in the most
popular and successful shopping centres is
stable, however less successful shopping
centres are experiencing problems in tenant
demand. Tenants are very careful in choosing
the premises for rent, they evaluate existing
performance of a shopping centre and it’s
potential for improvement in customer flow
growth. Tenants prefer to be in those
Sqm (000s)
600
500
400
300
Completed Projects in Riga for 2010
Project Name Address GLA, sqm Developer
Galleria Riga Dzirnavu St. 67 29,700 Patollo
Total 29,700
200
100
0
2001
2002
2003
2004
2005
2006
2007
2008
Total Stock New Construction
Expected Construction
2009
2010
2011f
List of New Projects in Riga for 2011
Project Name Address GLA, sqm Developer
Homburg Group Shopping Centre, 1st stage Priedaines St. 20 5,000 Homburg Zolitude
Rimi Shopping Centre DAMME Kurzemes Ave. 1A 15,000 Rimi Latvia
Prisma Hypermarket Kurzemes Ave. 3 7,700 Imanta Retail Park
Total 27,700
CONTACTS: DENISS KAIRANS - d.kairans@colliers.lv l MARIJA KAPELKA - m.kapelka@colliers.lv
Colliers International | p. 11