Crisis brings change to commercial property market in Riga

A new trend in the commercial property market has emerged in Riga during the crisis: owners offer temporary discounts to tenants, Latvian Radio reported on June 12.

Rental price adjustments are mostly set for a certain period of time. Tenant migration has started, as renters look for best offers.

Artūrs Obrickis, representative of "Immostate" investment and commercial property company, said that owners of large spaces and those with multiple office centers or commercial property portfolios are trying to keep tenants on their property and offer different solutions during the crisis. 

"Most have given office spaces discounts up to 50%. There are even individual cases where the discount is a full 100% but that is exceptional," said Obrickis.

A tense situation has developed for owners of commercial areas with one or just a few properties. "Because the owners themselves did not have a good financial situation, they could not react so quickly and were unwilling to give discounts. The relationship between owners and tenants was heated," said Obrickis.

As a result, tenants reviewed and assessed whether the value of spaces was worth the price. Migration began as renters sought favorable offers.

Artūrs Obrickis said that the most expensive locations for owning commercial properties were the beginning of Barona Street, Tērbata Street, and the central streets of the Old Town - Audēju, Kaļķu, and Vaļņu. 

For the time being, crisis has not introduced any changes to rental fees on these streets. Obrickis concedes that owners of the spaces are optimistic and hope that the business will return to tenants and life will continue its normal course. In trading centers, he said, rental prices will not fall because they are resuming work and the competition  between them  is fierce: existing centers are expanding communication campaigns and new centers will soon add to the market.

 

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