Baltic Office Outlook, 2025 Q1 -
The Baltic office markets remained stable in Q1 2025, supported by steady rental levels and tenant-driven leasing activity. Across Vilnius, Riga, and Tallinn, demand was largely driven by relocations into modern, sustainable buildings, while rising vacancy in secondary stock strengthened tenant negotiation power. Prime offices continue to outperform, highlighting a growing gap between high-quality and outdated assets.
Baltic Office Outlook, 2025 Q1
The first quarter of 2025 confirmed a balanced but tenant-favourable environment across the Baltic office markets. While economic sentiment has begun to improve, leasing activity remains selective, with occupiers prioritising efficiency, sustainability, and flexibility rather than expansion. Rental levels held stable in all three capitals, supported by controlled supply growth and steady demand for modern office space.
In Vilnius, the office market remained stable despite new completions. One A-class project was delivered, expanding total stock and maintaining vacancy at around 8%. Leasing activity was driven primarily by relocations from outdated premises into newer buildings, while older assets faced increasing pressure and rising secondary vacancy. Landlords of non-prime stock continued to offer flexible lease terms and incentives to retain tenants.
In Riga, the absence of new supply helped vacancy decline below 10%, marking a notable improvement compared to previous quarters. Leasing activity strengthened, supported by several large transactions and a clear preference for efficient, ready-to-use office solutions. Although the market remains tenant-led, limited future supply and rising construction costs may gradually shift conditions in favour of landlords, particularly in the A-class segment.
In Tallinn, office rents remained stable, and vacancy showed early signs of peaking. New supply was moderate, and prime offices continued to attract consistent demand, while competition intensified among B-class properties. Despite a quiet investment market, improving economic indicators suggest a gradual recovery, with the strongest performance concentrated in high-quality, well-located buildings.
Across the Baltics, the office sector is increasingly characterised by polarisation between prime and secondary assets. Tenants are favouring modern, ESG-aligned offices, reinforcing long-term demand for quality space. As development pipelines moderate and economic conditions stabilise, the Baltic office markets are expected to move toward a more balanced phase over the coming quarters.