It's not a dream to buy Latvian property for favourable prices. Latvia is a gem hidden away on the Eastern edge of Europe... You are in a few steps from buying Latvian property

The market of commercial premises in Latvia

Bureaus/offices

Market praxis

A class

The bureaus of A class are the best and the most modern offices in the city, normally situated in office buildings, that correspond to at least following criteria:

1. The building is situated in prestigious district and it is easily reachable;

2. Architecturally notorious bureau building;

3. Secure car parking, owned by the office building;

4. The double electricity supply system;

5. The height of the ceiling not less than 2,7 m in finished variant;

6. Elastic internal planning and design of bureaus

7. Joined system of ventilation, warming and conditioning;

8. Electricity of 3 phases, telephone and computer cables, professional telecommunication service;

9. Security control system (24/7 security and alarm);

10. Quick lifts;

11. Cafes and other similar services in building

B class

The bureaus of B class are typical standard bureaus, which are described by the presence of following qualities:

1. Newly built or renovated building;

2. Modern communication systems;

3. Easily reachable and with developed infrastructure around;

4. Cafes not far from the building.

C Class

The bureaus of C class are all the other building used for administrative purposes mainly situated in buildings, which were built during the Soviet Era.

In the graphic, which can be seen below not only the increase of the value is shown, but also the changes of the whole analyzed package. At the moment there are only two off ce buildings of A class - "Saules Akmens" and "Valdemara Centrs" - the most modern and the pest bureau buildings in Riga City, which correspond to the criteria mentioned in the description of A Class offices group above.

That is why 4 qualified buildings are added to the B Class, the changes of this quality inf uence the change of density and price in graphic.

At the beginning of the year the bureaus in the very centre of Riga were desired by many entrepreneurs: lawyers, consultants, Advertising and PR Agencies and others providers of social services. But part of tenants chose their bureaus to be further from centre to make the possibilities to park the car easier for their clients. The most popular places after centre are - Pardaugava, near the bridge, as well as Teika, Purvciems and Pljavnieki. At the beginning of the year there was a lack of B Class bureaus.

The costs of the rent of bureaus was on the approximately the same level during the first half of the year: AClass -15 EUR per sq.m., B Class -10 EUR per sq.m., C Class - 6 EUR per sq.m. Even now the tendency to rent the bureaus predominates over the tendency to buy them. It can be explained by the narrow offer and high prices.

Since the 1^st May and joining the EU the currency for invoicing for the rent of bureaus became EUR - around 60%house owners invoice their tenants in EUR, approximately 35% in LVL and only 5% in USD.

In July many governmental establishments, who created new departments and employed new workers after joining the EU were in search of bureaus. Predominating tendency - private companies generally are looking for the bureaus with an area around 100 sq.m., but governmental establishments from 80 till 300 sq.m. In summer the offer corresponded to the demand, but the prognoses of increasing demand for A Class bureaus has not happened as it was in prognoses. As a result the buildings with A Class bureaus stay empty, change only their owners.

In October the 15 % of A class offices stayed without tenants, but the level of the costs of rent has not changed - in average form 14 EUR till 17 EUR.

In the middle of November, together with the opening of the Central Bureau building of Joint Stock Company Hansabanka the criteria for the A class bureaus have been changed, because of the quality of new building, where18 623 sq.m. of A Class bureaus are situated.

At the end of the year the rent in two best A Class bureau buildings began to grow - in "Valdemara Centrs" it reached 19 EUR per sq.m. and 28,5 EUR per sq.m. in "Saules Akmens". This increase can be explained with the inflation itself than with the high demand.

The demand for the B Class offices was so high that by the end of the summer only 3 % stayed empty. In connection with this prices grew in average for the 1 EUR per month and by the end of the year reached the level of 10-13 EUR per sq.m. The high demand of this office Class is determined by the micro economical situation - when starting the new business entrepreneurs mainly rent C class offices, but when the business starts to develop they tend to rent B Class offices.

In autumn several B class bureau buildings opened their doors for exploitation - the buildings on Aspasijas Boulevard 28, 2 newly constructed buildings on Skanstes str.13, Viniibas Gatve 87h, Gertrudes street 10/12. Then there were B Class offices empty after previous tenants and former A class offices.

The costs of rent for the C class segment reached the level of 10 EUR per sq.m. by the end of the year. Normally these offices are rented by newly established PR, IT and Consulting companies, which tend to change their offices for the B level after they grow.

In December the demand for B and C class offices was higher than offer. The main potential tenants were governmental establishments - the existing institutions developed, governmental buildings were reconstructed, the terms of some tenancy agreements was over, new projects started.

Properties for trade

Tenancy agreement	2-5 years
Terms and conditions of payment	Monthly payment in LVL
Deposit	2 months of rent
The changes of the rent	Once in 2 years
Refurbishment	Paid by the owner
The services of real estate agent	1 month of rent
Community areas	Normally not included into rent
VAT	18%

The demand for the properties for trade is mainly seasonal, besides in 2004 it was influenced by joining the EU. At the beginning of the year there was a tendency to buy and rent the app 100 sq.m big rooms for cafes, but at the centre of Riga there were not such offers. At the end of the year the tendency to rent areas for cafes rapidly decreased.

The demand for the trade rooms in the main shopping area of Terbatas, Barona, Marijas and Brivibas streets, where monthly rate is for 18-55 EUR per sq.m. A couple of blocks further up, beginning with Stabu street, the properties are not highly demanded because of the low level of activity. The Trade Centres, where the rent ranges from 30 till 40 EUR per sq.m. become more and more popular. This price includes rent, communities and marketing services.

After joining the EU several new tendencies appeared.

At the beginning of the year the owners of trade properties were not keen to sell them, hoping for the increase of the price after joining the EU.

In the spring of 2004 ASV dollar was changed by EUR in all the payments. At the beginning the price stayed the same, only currency changed. In April and May the prices reduced and reached the previous level.

In the spring of 2004 step by step the properties for trade in the first storey (ground storey) of buildings started to be put on sale. Especially in the blocks of flats in such districts as Imanta, Kengarags, Ilguciems, Pljavnieki because of the law, that there should be cafes situated near or in the blocks of flats.

in June the foreign investors began to take the great interest in rent of trade properties. After joining the EU the European entrepreneurs wish to broaden their businesses over the Baltic States. Especially interested were Estonians, Lithuanians, Italians, Spaniards, and Scandinavians. Note! Since 2000 the 5% of the international brands trade joined the Markets of Baltics, i.e. More than in Poland.

In the October, 2004 the Trade centre "Domina Shopping" with the total area designated for trade - 44 000 sq.m. and third storey of "Alfa" with the total area designated for trade 60 000 sq.m. All the areas were rented even before the official opening ceremony. Despite such a big offer the prices for trade properties increased for the 1 -2 EUR per sq.m.

In 2004 the trade properties on the f rst f oor were sold for 1700 -1800 EUR per sq.m. and the offer was not especially broad.

Properties for the industrial needs

Tenancy agreement	1-3 years
Terms and conditions of payment	Monthly payment in LVL
Deposit	2 months of rent
The changes of the rent	Once in 2 years
Refurbishment	Paid by the owner
The services of real estate agent	1 month of rent
Community areas	Normally not included into rent
VAT	18%

The characteristic tendencies of the 2004 is the gradual shift of the manufacturing from the centre of Riga and stable demand for the warehouses for Trade Centers, Supermarkets and the needs of producers. The largest demand is for the A Class warehouses with the medium area, i.e. 1500 - 5000 sq.m., but there is practically 0 level of ready made warehouses. The reaction was the offer to build A Classes warehouses, signing the tenancy agreements in advance. But at the moment clients are not keen to invest their money without seeing ready properties, they still are looking for warehouses, using the services of Real estate Companies.

Before the 1^st of May the market was not very active. At the same time the demand was high - continued the tendency of 2003, which was characterized by shifting of manufacture from the centre of Riga. That is connected with ED directives concerning noises and environment. From now on the industrial properties will not be allowed near the inhabited block of flats or private houses. The tax for the real estate also made entrepreneurs to shift from the centre. The tax increases, because the market price of the property influences the tax. That is why - it becomes irrational to produce anything in the Centre of Riga. The largest benefits are from bureaus and apartments. That is why customers, who buy former factories and plants in the centre tend to renovate them and transform into the accommodation or offices.

In spring the most popular region for Industry was the district of Granita and Krustpils streets, as well as Rumbula. Because of the high demand the price for land, e.g. on the Krustpils street in April reached the level of 20EUR per sq.m. This is very expensive price for the industrial objects in Latvia.

The major routs of industrial shifts in 2004 were: the road leading to Daugavpils City, the road leading to Tallin near Salaspils (till Saulkalne). With the increase of the quantity of deals the prices grew. But in spring prices were on comparatively cheap level, i.e. - 2-10 EUR per sq.m.

Other popular routes for transferring of industry are in the direction of Ogre, not far from Salaspils, Not far from Olaine on the direction to Jelgava. The land near the Olaine designated for Industrial building costs 6 EUR per sq.m.

In autumn the largest demand was for the direction of Jaunolaine, where the suitable land costs 2-3 EUR per sq.m., and the land transformed specially for industrial needs - till 5 EUR per sq.m. Saurieshi route is also in demand. There a price for the area of a couple of ha would be 10 EUR per sq.m.

In the district, where the road leading to Daugavpils and the road leading toTallin cross the price for land is approximately 3 EUR per sq.m.

Because of this not far from Riga the complexes of warehouses are built. Mostly such complexes are built by the companies, whose bureaus are situated in one place and warehouses in another. Besides the companies from Saldus, Liepaja and other places in Latvia build there logistics centers not far from Riga. Because of this price for the industrial land increase and at the end of the year it reached 30 EUR per sq.m. in Marupe and on the direction towards Salaspils.