Although the indicators of the shopping streets in the capital city worsened, more daring businesses see potential

With more than a year since the first wave of the COVID-19 pandemic, Ober-Haus experts have evaluated how the situation has changed in the main shopping streets of Vilnius where the mood has been largely changeable.

“The entire retail and retail property sector in Lithuania has been facing a variety of challenges during this period. Smaller retailers found the period particularly difficult. The rapidly changing pandemic situation in the country, regular need to adapt to changing safety requirements and the limited financial capacity of small businesses have made the tenants of small retail premises particularly vulnerable,” Raimondas Reginis, Market Research Manager for the Baltics at Ober-Haus, said.

A survey on the situation in the main shopping streets (Gedimino Ave., Pilies St., Didžioji St., Vokiečių St.) of the city of Vilnius conducted by Ober-Haus in mid-2020 and mid-2021 shows that the situation is still stressful. If in mid-2020 the vacancy rate in these streets stood at 11.0%, so in mid-2021 it slightly increased to 11.9%.

“In the summer of 2020, people returned to shopping streets and injected optimism to retailers, particularly to the largest group of tenants – restaurants, cafes, bars and fast food outlets, which account for 38% of all retail premises in these streets of the capital city,” Reginis said.

With the lifting of the lockdown, people who have missed socializing and recreation occupied outdoor seating areas of retailers who provide food and beverage services and improved the performance indicators of such retailers. According to Statistics Lithuania, the turnover of food and beverage suppliers in Lithuania in H2 2020 increased by 27% compared to H1 2020. However, the overall performance in H2 2020 in this business sector remained 19% lower compared to record indicators in H2 2019. The second wave of the coronavirus made businesses essentially close again and at the end of 2020 the performance indicators noticeably declined again. In H1 2021, the performance indicators of food and beverage suppliers remained modest and were 9% lower than at the same time last year and 32% lower than in H1 2019.

According to Ober-Haus, in mid-2021, the highest vacancy rate was recorded in Pilies Street – at 18.5% and the lowest vacancy rate was recorded in Didžioji Street (9.1%). The vacancy rate in Gedimino Avenue stood at 11.0% and in Vokiečių Street – 10.2%.

Within a year, the highest increase in vacancy rate was in Pilies Street (from 11.3% to 18.5%), where over 50 retail units are based (located on the ground floor of the building, with at least one window facing the street and suitable for commercial activities).

Raimondas Reginis, Market Research Manager for the Baltics at Ober-Haus

“Since the overall number of retailers is not large, a few vacant retail premises can significantly change the relative indicator of the vacant space. On the other hand, Pilies Street is probably the most popular street visited by foreign tourists in Vilnius, so during the pandemic, the footfall decreased significantly affecting revenues of retailers,” Reginis noted.

Meanwhile, on Vokiečių Street there was one vacant space less in mid-2021 than a year ago, and the figure for the vacancy rate decreased from 12.5% to 10.2%. Despite the relatively small vacancy rate, the owners and tenants of this street will be facing additional challenges. This year, the renovation of the district heating system started on Vokiečių Street, and cafes and restaurants have to adapt to the works and to relocate or close their outdoor seating spaces. Once the renovation of the heating system is completed, the renovation of the entire Vokiečių Street will start, and the terms of the reconstruction have not yet been finalised.

“It is clear that the renovation works will significantly reduce the flow of potential customers in the street and this will affect all businesses located in the street, which, in addition, will have to deal with the challenges posed by the current pandemic. Therefore, the owners of retail premises on Vokiečių Street may expect the rise in the number of vacant premises in the coming years and the decrease in rental revenues,” Reginis said.

The structure of the tenants in the main shopping streets of the capital city has not changed substantially during the year. According to Ober-Haus, in mid-2021, most of the premises were occupied by restaurants, cafes, bars and fast food outlets and their share during the year decreased slightly from 38.6% to 37.9%. The share of clothing and footwear retailers accounted for 19.2%, jewellery, accessories, souvenirs and cosmetics – 14.9%, food stores – 3.1%, and the remaining 24.9% were beauty salons, offices, pharmacies, banks, bookstores and other retail or services units.

Given that the pandemic situation in the country is either improving or deteriorating, the expectations of the owners of retail premises in respect to the rental income remain uncertain. If some owners of such premises can offer lower rents than they were before to potential tenants, so other owners still expect to sign long-term lease contracts securing pre-pandemic rents.

In mid-2021, rents for medium-sized (about 100–300 sqm) retail premises in the main shopping streets of Vilnius (Gedimino Avenue, Pilies Street, Didžioji Street and Vokiečių Street) stood at 15.0–40.0 EUR/sqm and were on average 12% lower than those at the end of 2019. However, there are cases where owners of the premises sign long-term lease contracts with new tenants at 25-20% lower rents than they could lease before the pandemic started.

The overall indicators show that there is little optimism in the shopping streets of Vilnius, but interest in available retail space is not lost. “Some businesses see long-term prospects of these streets and the current market situation opens up much wider opportunities for them. If it was generally difficult to find suitable premises before the pandemic even by offering historically record rents, today the choice is wider and the rents are more attractive. Therefore, more daring entrepreneurs are trying not to miss their chance and are actively interested in their business development opportunities in the prestigious locations of the city,” Reginis said.

Latest news

All news
The 2023 annual apartment price increase stood at 1.7% and the average annual price increase – at 8.2%
2024-01-15

The 2023 annual apartment price increase stood at 1.7% and the average annual price increase – at 8.2%

The Ober-Haus Apartment Price Index (OHBI) in Lithuania, which records changes in apartment prices in five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), increased by 0.5% in December 2023. Overall, the apartment prices in the major cities of Lithuania have increased by 1.7% over the last 12 months. The average annual apartment price increase in 2023 (January-December year-on-year) stood at 8.2%. In December 2023, apartment sales prices in Vilnius, Kaunas, Klaipėda and Panevėžys increased by 0.4%, 0.6%, 0.8% and 0.8% respectively and the average price per square meter in these cities was EUR 2,575 (+11 EUR/sqm), EUR 1,736 (+10  EUR/sqm), EUR 1,640 (+13 EUR/sqm), and EUR 1,081 (+8 EUR/sqm). In Šiauliai, apartment sales prices decreased by 0.7% and the average price per square meter was EUR 1,098 Eur (-8 EUR/sqm). Apartment prices rose year-on-year in December 2023 in all major cities of the country: 1.1% – in Vilnius, 2.7% – in Kaunas, 2.4% – in Klaipėda, 2.4% – in Šiauliai and 2.0% – in Panevėžys “Despite the decrease in the number of sales transactions in the Lithuanian housing market by 14% for two consecutive years, the country avoided a decline in the sale prices in 2023. In the…

Price expectations continue to hold despite declining housing market activity
2023-12-20

Price expectations continue to hold despite declining housing market activity

The Ober-Haus Apartment Price Index (OHBI) in Lithuania, which records changes in apartment prices in five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), increased by 0.1% in November 2023 (the price index in October 2023 decreased by 0.1%). Overall, the apartment prices in the major cities of Lithuania have increased by 1.2% over the last 12 months (the annual growth in October 2023 was 1.1%). In November 2023, apartment sales prices in Kaunas, Klaipėda and Šiauliai increased by 0.2%,  0.5% and 0.2% respectively and the average price per square meter in these cities was EUR 1,726 (+4 EUR/sqm), EUR 1,6270 (+8 EUR/sqm) and EUR 1,106 (+3 EUR/sqm). In Panevėžys, apartment sales prices decreased by 0.1% and the average price per square meter was EUR 1,073 (-1 EUR/sqm). In Vilnius, apartment sales prices remained unchanged and the average price per square meter stood at EUR 2,564. Apartment prices rose year-on-year in November 2023 in all major cities of the country: 0.8% – in Vilnius, 1.9% – in Kaunas, 1.3% – in Klaipėda, 2.9% – in Šiauliai and 1.5% – in Panevėžys. “Unlike housing market activity, which suffered another downturn in November, price expectations of the population remain quite optimistic.…

Apartment Developers’ Investments Have Been Shrinking
2023-11-16

Apartment Developers’ Investments Have Been Shrinking

The Ober-Haus Apartment Price Index for Lithuania (OHBI), which captures changes in apartment prices in the five largest Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), decreased by 0.1% in October 2023 (unchanged from September 2023). The overall level of apartment prices in Lithuania’s major cities grew by 1.1% over the last 12 months (an annual growth of 2.6% was recorded in September 2023). In Vilnius, Kaunas and Panevėžys, during October 2023, the sales prices of apartments decreased by 0.1%, 0.1% and 0.4% respectively, and the average price per square metre was EUR 2,565 (-€3/m²), EUR 1,722 (-€2/m²) and EUR 1,074 (-€4 /m²). However, in Klaipėda in October, the average price per square metre actually rose by 0.3% to EUR 1,619 (+€6/m²). In Šiauliai, the average price per square metre remained unchanged during the month at EUR 1,103. During the year (October 2022 to October 2023), apartment prices grew in all major cities of the country: in Vilnius – by 0.8%, in Kaunas – by 1.8%, in Klaipėda – by 0.7%, in Šiauliai – by 3.4%, and in Panevėžys – by 1.9%. The significant downward adjustment in housing market activity and the cessation of rising sales prices are clearly affecting…

All news

This website uses cookies. You can confirm your acceptance by clicking the "I Agree" button or by continuing to browse. I agree

Mail sent!

This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.