Vilnius and Kaunas regions to see a 20% increase in the area of modern warehousing premises in 2017 and 2018

The improving financial performance of companies which are directly related with the sector of warehousing premises and the growing need for modern premises have recently determined faster development of this real estate segment, announced the Ober-Haus review of commercial real estate. According to Statistics Lithuania, during the first halfyear of 2017 revenues of warehousing and storage companies amounted to EUR 71.4 million (excluding VAT) or respectively 15.7% and 18.0% more compared to the same period in 2016 and 2015.

During the first three quarters of 2017, seven warehousing and logistics premises projects were completed in Vilnius and Kaunas regions. Four new projects implemented by Ad Rem, Baltic Sea Properties, Arvydo Paslaugos and Woodline were completed in Vilnius region. According to data from Ober-Haus, after the implementation of these projects, the market of the capital city was supplemented with 31,900 sqm of new warehousing premises at the end of Q3 2017 totalling 513,300 sqm in Vilnius and its environs. Meanwhile, three projects with a combined floor area of roughly 19,000 sqm were completed in Kaunas region. All projects implemented in Kaunas region were intended for own needs of the companies (Vetmarket, Analizė and Aibė). At the end of Q3 2017, the area of modern warehousing premises in Kaunas city and its environs totalled 298,700 sqm.

‘Although in recent years more active development of warehousing premises has been recorded in Vilnius and Kaunas regions, more investment is also planned in Klaipėda region. Like in Kaunas, the projects developed in Klaipėda region are predominantly for own company needs rather than for the market’, Saulius Vagonis, Head of Valuation & Analysis Department at Ober-Haus, said.

The SBA Holding plans to start development of its logistics centre and a plant for furniture components near Klaipėda in early 2018. In phase one of the project, a 28,000 sqm central warehouse and a 12,000 sqm plant of the SBA Group is planned to be build. Over the next 10 years, the area of both the logistics centre and manufacturing premises will be gradually increased. The logistics centre will serve both the needs of the SBA Group of companies and other furniture manufacturers. Vakarų Medienos Grupė is planning the construction of a large industrial park in Klaipėda district to accommodate factories and a logistics centre. The company will store and distribute its products through its logistics centre.

‘Looking at further development of the warehousing premises sector in Vilnius and Kaunas regions, the number of planned projects and projects in progress is rather large. The companies which plan various projects in these regions aim to expand the sector of new and modern warehousing facilities considerably’, Mr Vagonis said. According to data from Ober-Haus,  by the end of 2017 and in 2018, another 12 projects with a combined floor area of roughly 100,000 sqm are planned in Vilnius and Kaunas regions, of which two thirds of the floor area will be developed in Vilnius region. A total of 30% of the floor area will be projects for own needs of the companies and build-to-suit projects.

‘High financial performance indicators of the logistics and warehousing premises sector encourage the development of new sites and investment in the renovation of older buildings. Increasing construction costs also contribute to the moderate increase in the rental and sales prices of warehousing premises. During the past 9 months of 2017, the rents of new and old warehousing premises in Vilnius region increased by 3–4% and in Kaunas and Klaipėda regions – by 1–2%’, Mr Vagonis said.

According to data from Ober-Haus, newly built warehousing premises in Vilnius are offered for rent at 3.8–5.2 EUR/sqm and old warehousing premises at 1.6–3.4 EUR/sqm. In Kaunas new warehouses are offered at 3.7–5.2 EUR/sqm, old ones – 1.5–3.0 EUR/sqm, in Klaipėda new warehouses go for 3.5–4.8 EUR/sqm, old ones – 1.5–3.0 EUR/sqm.

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