Industrial Parks, Latvia, Markets and Companies

Elita Moiseja, Member of the Board, NP Properties; Member of the Board, LTICA

Due to increasing international competition, the sector of available commercial real property, including the places in industrial parks, has become more qualitative and elastic towards ever more specific and challenging clients’ demands. This is no secret that the strongest positions in the market presently belongs to developers seriously investing with the aim of satisfying corresponding clients’ demands in modern commercial property in the suitable regions.

Most popular industrial park’s developer in Latvia is NP Properties company, which has developed a chain of such parks in the biggest and in the most strategically attractive cities in Latvia. NP Properties’ industrial parks are oriented towards production spheres and around 85 per cent of park territories’ lease-holders are, in fact, producers of various industrial goods.

Among most active and big NP Properties industrial parks presently are the following: Nordic Technology Park, Nordic Industrial Park, NP Jelgavas Biznesa Parks, NP Daugavpils Biznesa Parks, as well as a logistic center Dominante with the Dommo business-park.
During 2008 within the family of available industrial real estate, several big projects appeared oriented generally towards servicing customers’ logistics demands. These are, for example, Olaines Logistic Park, NCC Property Development, Bergi Logistics Center, etc. It is expected that by the end of the year about 200 th sq m of clearhouses properties will be commissioned.

Commercial interest in industrial real estate in Latvia from both local and international investors is high, therefore developers’ long-range investments into industrial park’s development is definitely regarded as quite perspective in the future.

This conclusion is confirmed by the banks’ and other financial institutions’ representatives in Latvia arguing that for a long time a lack of suitable industrial real estate facilities has been a great problem.

According to financial experts, it is much easier for businessmen to take up already existing premises, rather than being involved into industrial property construction; the latter is presently extremely unprofitable due to high construction costs with high workers’ wages and pure infrastructure in general.

There are presently 23 industrial parks in Latvia occupying about 460 ha, which makes it available about 100 ha industrial territory for leasing.

At various stages of development are additional industrial parks’ projects with the available territory of 300 ha; the biggest in size is the industrial and logistics park of about 100 ha, developed by the local administration in the Bauska city. In this way the former trend towards satisfying the demand for industrial property around Riga-capital territory is clearly seen.
More and more customers would like to position their innovation production in the industrial parks having adequate facilities for modern science and technology equipment. Such undertakings greatly need huge electricity resources which are available mostly at the premises of the previous industrial plants.

During 2007 the NP Properties company invested about 1 mln EUR in order to make industrial and clearinghouse’s premises of about 4 th sq m of territory for several innovative undertakings: High Tech Rubber, Verdina Sausais Ledus, Pharmidea, Madara Cosmetics, ect.