Baltic Office Outlook, 2024 Q3 -
In Q3 2024, the Baltic office markets faced increasing competitive pressure as new supply continued to enter the market amid subdued leasing activity. Rising vacancy, stable rents, and cautious tenant behaviour reinforced a tenant-favourable environment across Vilnius, Riga, and Tallinn, with prime offices continuing to outperform secondary stock.
↓ Laadi alla
Baltic Office Outlook, 2024 Q3
The third quarter of 2024 highlighted a challenging adjustment phase for the Baltic office markets, driven by rising supply, slower-than-average leasing activity, and growing tenant selectivity. Across all three capitals, vacancy levels increased or remained elevated, while rental rates showed limited upward pressure, reflecting the ongoing imbalance between supply and demand.
In Vilnius, new projects entered an already highly competitive market. Approximately 15,900 sqm of office space was leased during the quarter, significantly below the five-year average. At the same time, new completions pushed total vacancy to 8.8%, with A-class vacancy rising to 7.4% and B-class to 9.9%. Long-term tenants continued to relocate from older buildings into newer developments, leaving behind secondary space increasingly offered at discounted or short-term lease conditions. Despite this, headline rents remained stable, supported by falling inflation and indexation mechanisms.
In Riga, leasing activity remained active but was overshadowed by a strong delivery pipeline. By the end of Q3, total vacancy stood at 11.1%, with similar levels across both A- and B-class segments. Most new supply delivered during the year was pre-leased, helping to limit further vacancy growth. Several large transactions in new developments confirmed ongoing demand for modern, sustainable offices, while developers faced mounting pressure to secure pre-leases before advancing new projects.
In Tallinn, new supply and elevated vacancy continued to impact rental dynamics. Average asking rents declined slightly in both A- and B-class segments as landlords responded to tenant bargaining power. Around 12,000 sqm of new office space was delivered during the quarter, with a further 75,000 sqm under construction. Although vacancy showed a temporary dip, market sentiment remained cautious, as tenant demand was constrained by low hiring activity and ample choice across available stock.
Overall, the Baltic office markets in Q3 2024 were characterised by rising vacancy, stable to slightly declining rents, and intensified competition among landlords. Tenant decision-making focused increasingly on price, flexibility, and building quality, reinforcing the growing divide between modern, energy-efficient offices and older, less adaptable stock.