Latvia, Real Estate

At the moment, class "A" office space can be rented for EUR 7-12 per square meter, whereas rent rates for class "B" office space range from EUR 5 to EUR 8, Ober Haus informs.

Many businessmen have used this opportunity to move to offices of better quality and in better locations. Since the proportion of unoccupied space is approximately 30%, landlords often offer favorable conditions, such as free parking, writes LETA.

The current rent rates also make Riga more attractive for foreign companies planning to open offices in Riga, Ober Haus experts believe.

The current rent rates in combination with low labor costs and developed business environment are the advantages that make Riga attractive to foreign companies. For instance, Cytec Industries has signed agreement on renting premises in the "Europa" business center, after a survey of the office space markets in other Eastern European cities, including Tallinn, Vilnius and Warsaw. The opening of "Cytec Industries" offices in Riga will create some 150 new jobs.

Ober Haus believes that class "A" and "B" office space rent rates will not decrease any further. Moreover, since very few new office buildings are in development at the moment, the offer on the office space market is unlikely to increase in the coming years, which means that the proportion of unoccupied office space will gradually decrease. This, together with the expected gross domestic product growth in 2012, will cause rent rates to increase in the next two years, Ober Haus said.