Zvery­nas Cir­cle to be­come the jewel in the crown of fi­nan­cialvil­nius

The Baltic Times - - BALTIC REAL ESTATE -

An as­sess­ment of com­mer­cial real es­tate de­vel­op­ment trends in Vil­nius shows that, in re­cent years, the modern of­fice space mar­ket in Vil­nius has been get­ting in­creas­ing at­ten­tion: since 2000, over 100 busi­ness cen­tres or build­ings of var­i­ous pur­poses with modern ad­min­is­tra­tive premises have been built in the city. At the end of 2016, the use­ful floor area of of­fices to­talled 626,900 sqm. The real es­tate com­pany Ober­haus es­ti­mates that in 2017–2018, an­other 18–22 of­fice build­ings or of­fice com­plex parks could sup­ple­ment the mar­ket, of­fer­ing an­other 110,000-150,000 sqm of of­fice space in Vil­nius. Over a pe­riod of time, sev­eral cen­tral busi­ness dis­tricts (CBD), usu­ally re­ferred to as fi­nan­cial cen­tres abroad, emerged in the city where of­fice build­ings dom­i­nate.

Ac­cord­ing to Saulius Vag­o­nis, head of Ober-haus Val­u­a­tion and Mar­ket Re­search Depart­ment, three busi­ness dis­tricts in Vil­nius can be iden­ti­fied with a higher con­cen­tra­tion of modern of­fice build­ings than in other parts of the city: Kon­sti­tu­ci­jos Av­enue and its sur­round­ing area, the Busi­ness Tri­an­gle (Ver­slo trikampis) next to J. Jasin­skio, and A. Gostauto streets, and the dis­trict of Zvery­nas in the north­ern part of the city with the Zvery­nas Cir­cle (Zveryno ziedas) busi­ness dis­trict. Ac­cord­ing to Ober-haus, at the end of 2016, the leased of­fice space in these three busi­ness dis­tricts to­talled 202,450 sqm. This is of A and B class of­fice space fa­cil­i­ties avail­able in Vil­nius.

In­ter­est­ingly, the first build­ings in all three of these dis­tricts were built by the real es­tate de­vel­op­ment com­pany Han­ner. In 1999, Han­ner built the first new con­cept modern of­fice build­ing on A. Gostauto Street in Vil­nius. This gave im­pe­tus to con­struc­tion or re­con­struc­tion of other build­ings in the dis­trict, and as a re­sult, the first CBD (called Busi­ness Tri­an­gle) was born. An­other busi­ness dis­trict is lo­cated in the north­ern part of the city dis­trict of Zvery­nas. The first busi­ness cen­tre built here on Gelezinio Vilko Street, near Gelezinio Vilko Round­about in 2001, was a 16-story ra­zor blade­shaped glass sky­scraper (devel­oper – Han­ner). In 2004, Han­ner com­pleted the con­struc­tion of the 33-story Europa Shop­ping and Busi­ness Cen­tre on Kon­sti­tu­ci­jos Av­enue, giv­ing rise to yet an­other busi­ness dis­trict that be­came the largest ac­cu­mu­la­tion of of­fice build­ings in Vil­nius.

Up to 2007, the Busi­ness Tri­an­gle was the largest busi­ness dis­trict in Vil­nius. To­day it has 42,500 sqm of modern of­fice space, and this fig­ure has re­mained un­changed since 2006, when the build­ing com­pany Eika com­pleted the last of­fice build­ing in the dis­trict. Due to the lack of space, it was sim­ply im­pos­si­ble to de­velop any more of­fices here. Of­fices in this dis­trict con­tinue to be ren­o­vated and re­con­structed, how­ever the size of the busi­ness dis­trict has not changed, so de­vel­op­ment has stopped. There­fore, when one of the largest busi­ness cen­tres – Vil­nius Busi­ness Har­bour (cur­rently called 3 BURES) – opened on Lvovo Street in 2008, the busi­ness dis­trict on Kon­sti­tu­ci­jos Av­enue be­came the largest CBD in the capital city, and re­tains its ti­tle. Although this was the lat­est CBD to be de­vel­oped, it is the largest in Vil­nius: Busi­ness Tri­an­gle (42,500 sqm), and Zvery­nas Cir­cle

(37.850 sqm) al­to­gether are still smaller than Kon­sti­tu­ci­jos CBD (at the end of 2016 –122,100 sqm).

“Kon­sti­tu­ci­jos CBD is spe­cial, be­cause a con­sid­er­able part of modern of­fice build­ings here were built- to­suit rather than to let, i.e. were built for the builder’s own needs. Such build­ings are: the Vil­nius City Mu­nic­i­pal­ity, Vil­nius County Gov­er­nor’s Ad­min­is­tra­tion, Vil­nius Branch of the State En­ter­prise Cen­tre of Reg­is­ters, and Swed­bank, one of the largest banks in the coun­try,” Vag­o­nis said.

“Ex­pan­sion of com­pa­nies op­er­at­ing in Vil­nius, es­pe­cially ser­vice cen­tres of in­ter­na­tional com­pa­nies, brings about the need for modern of­fices in the capital city, and such a need has in­creased over the past few years. As a re­sult, real es­tate de­vel­op­ers are plan­ning new projects, look­ing for sites and spa­ces. For this pur­pose, the north­ern part of the city dis­trict of Zvery­nas be­tween T. Nar­b­uto, Uk­merges, Sal­toniskiu and Gelezinio Vilko streets could be utilised,” Vag­o­nis said.

Com­pared to other Vil­nius CBD, Zvery­nas Cir­cle has the small­est modern of­fice area, which at the end of 2016, amounted to 37,850 sqm. How­ever, at the end of 2017, af­ter com­ple­tion of con­struc­tion of four new busi­ness cen­tres (Green Hall 2, Nar­b­uto 5, Link, and a busi­ness cen­tre at Sal­toniskiu Street 7 de­vel­oped by UAB M.M.M. pro­jek­tai), the to­tal area of of­fice space in this dis­trict will reach 68,250 sqm. This will make Zvery­nas Cir­cle the sec­ond largest CBD in Vil­nius, leav­ing the Busi­ness Tri­an­gle third.

Look­ing at fu­ture plans of de­vel­op­ers, Ober-haus ex­perts ob­serve that in 2017–2018 both Zvery­nas Cir­cle and Kon­sti­tu­ci­jos CBD will see ag­gres­sive ex­pan­sion. By the end of 2018, eight of­fice build­ings could be built in these two busi­ness dis­tricts, with 75,500 sqm modern of­fice space. So op­por­tu­ni­ties for prospec­tive ten­ants wish­ing to set­tle in a CBD will def­i­nitely in­crease.

Modern of­fice space mar­ket in Vil­nius has been buoy­ant.

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