Newsec Property Outlook Baltics, autumn 2024 -
In autumn 2024, the Baltic property markets showed early signs of stabilisation following a prolonged period of adjustment. While leasing activity remained cautious and investment volumes subdued, improving economic indicators, easing inflation, and slowing new supply supported a more balanced outlook across office, retail, and logistics sectors.
↓ Lejupielādēt
Baltic Property Market Outlook 2024 (Autumn)
The autumn 2024 edition of the Baltic Property Outlook reflects a market moving gradually toward stabilisation after several challenging years. Across Lithuania, Latvia, and Estonia, commercial real estate activity remained measured, shaped by cautious occupier behaviour, reduced investment appetite, and the lingering effects of high interest rates. At the same time, easing inflation and improving macroeconomic indicators began to support sentiment toward the end of the year.
The office sector continued to experience tenant-driven dynamics, with elevated vacancy levels and stable to slightly declining rents in most markets. Demand remained focused on modern, energy-efficient buildings in prime locations, while older stock faced increasing competitive pressure. New supply entered the market at a slower pace, signalling a shift toward more disciplined development strategies and laying the groundwork for gradual rebalancing.
In retail, fundamentals proved more resilient. Prime shopping centres maintained low vacancy and stable rents, while tenant mix optimisation increasingly prioritised leisure, services, and convenience-based formats. Consumer behaviour remained cautious, but steady wage growth and easing inflation supported household consumption, particularly in essential goods and experience-driven retail.
The logistics and industrial sector remained the most structurally robust segment, supported by long-term demand drivers such as nearshoring, e-commerce, and supply-chain reconfiguration. Although vacancy increased slightly following strong supply growth in recent years, demand for modern, ESG-compliant facilities remained solid, while older stock faced rising obsolescence risk.
Across all sectors, investment activity remained subdued, reflecting higher financing costs and cautious pricing expectations. However, stabilising yields and a narrowing bid–ask gap suggest improving conditions ahead, particularly as interest rates are expected to decline further.
Overall, the Baltic property markets in autumn 2024 were characterised by cautious recovery, strong asset polarisation, and a shift toward quality and sustainability. While short-term challenges persist, the foundations for a more balanced and resilient market environment are increasingly in place heading into 2025.