RIGA - Riga will continue to lag behind Tallinn and Vilnius in terms of quality office space despite the sheer quantity of new offices that will come onto the market over the next three years.
By the end of 2009 a total 129,000 square meters of new office space will be completed in Riga, Mihails Morozovs, general director of Colliers International in the Baltic states, told a news conference on March 19.
Over the next three years the total amount of new offices in the Latvian capital is expected to exceed 331,000 square meters, Morozovs said.
Still, total office space available in Riga, which wants to position itself as the metropolis of the Baltic region, will still be much smaller than those in the capital cities of Lithuania and Estonia, he said.
"The shortage of office spaces in Riga is expected to continue for the next couple of years. Why? Because Riga lacks developers specializing in developing office spaces," he said.
He explained that the development of office space was hampered by exorbitant construction and design costs, as well as frequent delays.
Vilnius will boast the most new office space over the next two years, with 237,000 square meters coming onto the market.
Total office floor space in the Lithuanian capital will amount to more 417,000 square meters by the end of 2009.
The fastest growth of office space will be in Tallinn, where, according to Colliers Inter-national, the total construction is 172,000 square meters.
Total office space there is expected to reach 501,000 square meters over the next three years.
Morozovs added that the Belarus capital is also seeing a boom in new offices. In the next couple of years office space in Minsk is expected to increase by 141,000 square meters 's more than in Riga.
According to Collier's review of Latvia's commercial office market, only 66 percent of the new offices that should have been completed by the end of 2007 met their deadline.
Some of those offices are still under construction and are due to be finished by the end of March.
Another 87,000 square meters of office spaces are to be completed by the end of 2008.
Authors of the market review note that delays in construction projects are still commonplace in Latvia, and completion of projects is continually delayed by an average two to three months.
According to Colliers International, at present B1 class offices account for 68 percent of total office space in the Latvian capital.
The supply of A (luxury) class offices is much smaller, comprising only 18 percent of total office space supply, while B2 class offices account for 14 percent of the total office space available.