Baltic Retail Outlook, 2024 Q3 -
In Q3 2024, Baltic retail markets demonstrated resilience amid changing consumer behaviour. Across Vilnius, Riga, and Tallinn, retail activity increasingly shifted toward leisure, services, and convenience-based formats, while traditional retail faced pressure from cautious consumer sentiment and inflation-related constraints.
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Baltic Retail Outlook, 2024 Q3
The third quarter of 2024 highlighted a structural transformation in Baltic retail markets, as consumer preferences continued to evolve toward experience-driven, service-oriented, and convenience-based retail formats. While macroeconomic pressure and subdued consumer confidence persisted in parts of the region, retail real estate fundamentals remained broadly stable, supported by adaptive tenant mixes and resilient demand in prime locations.
In Vilnius, retail centres increasingly positioned themselves as lifestyle destinations. Renovations and tenant changes focused on entertainment, fitness, leisure, and wellness, responding to sustained population growth and rising demand for integrated retail experiences. Large shopping centres continued to attract visitors by expanding non-retail functions, reinforcing their role as multifunctional urban hubs. Retail rents remained stable, and the sector benefited from solid household consumption growth and improving wage dynamics.
In Riga, the retail market faced more pronounced challenges. While total retail turnover showed moderate growth, performance varied significantly by segment. Grocery and catering services recorded steady gains, while weaker shopping centres experienced higher tenant turnover. The opening of Teika Plaza marked the most notable new supply, highlighting a shift toward compact, convenience-led retail formats anchored by food and fitness operators. Landlords increasingly focused on strategic repositioning to remain competitive.
In Tallinn, retail sales declined year-on-year in Q3, reflecting low consumer confidence and inflationary pressure. However, improving economic indicators, falling interest rates, and rising wages are expected to support consumption recovery in 2025. Retail vacancy remained low, and rents largely stable, particularly in well-established shopping centres. Development activity continued outside the city core, supporting decentralised retail growth.
Across the Baltics, retail real estate in Q3 2024 was characterised by polarisation between strong, experience-led assets and weaker traditional formats. Operators that successfully integrated leisure, services, and convenience functions outperformed the market, setting the direction for retail development and asset management heading into 2025.