Zverynas Circle to become the jewel in the crown of financialvilnius
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.