KEY POINTS

  • Latvia GDP growth in Q3 2018 reached 4.7% y/y, inflation reached 3.2% in October 2018, y/y.
  • Unemployment in Latvia was at 7% in Q3 2018, a drop of 1.4% compared to Q3 2017.
  • The average after-tax salary in Latvia during Q3 2018 was EUR 744, representing 9.5% growth y/y.  
  • During Q3 2018 the total modern office stock did not increase and remains at ca. 639,500 sq m.
  • The overall vacancy rate declined q/q from 4.5% in Q2 2018 to 3.4% in Q3 2018, in-line y/y.
  • The overall market absorption rate q/q was ~11,250 sq m, in-line y/y. Absorption in Q3 2018 amounted to ca. 35,500 sq m, y/y, setting a multi-year record.  
  • 86% of current modern office stock in Riga consists of class B1 and B2 office buildings and only 14% of current stock consists of class A office buildings.
  • During Q3 2018, take-up activity (excl. renegotiations) increased by 60% compared to Q2 2018, however, remains at a relatively low level on account of cyclicity.
  • In terms of investment transactions,  the office segment accounted for ca. 37% of the total investment volume in the Baltics during H1 2018, a 7% decline y/y despite being in-line y/y in terms of investment size.