Many observers say that the Baltic States are a terrific foreign investment opportunity. International real estate companies single out Lithuania as a particularly attractive country.
One of the reasons is the fact that, since 2004, Lithuania has had a high economic growth rate. During the last three years, increase in GDP reflected impressive economic development. In 2004 it reached 7.3%; in 2005 - 7.6%; and in 2006 - 7.4%. Foreigners can freely purchase and sell property in Lithuania, although they need an approval from the local municipality to buy land. Moreover, Lithuania has a skilled and well educated workforce (the annual number of university graduates per 1,000 inhabitants is the highest in the Baltics). Beautiful cities, especially the capital city Vilnius with its Baroque Old Town that is the largest in Eastern Europe, and a countryside consisting of gently rolling green plains, extensive forests and over 4,000 lakes also attract overseas real estate investors.
According to commentators, the national commercial, office and warehouse accommodation market has been comparatively stable. During the year 2006 in Vilnius and the second largest city Kaunas the average annual price boost for both rent and sale was 10 to 20 percent. However, there were considerable price variations in Klaipeda. During the first quarter of the year 2006, the average price of office accommodation for sale increased by 40-45 percent, and the prices of commercial accommodation mounted by 50-80 percent.
As the figures given by the real estate centre BRC show, for sale, the average commercial lodging prices in the three cities vary from € 870 to €1590 per sq. m. per month at the moment. The average price of office accommodations is about € 870 per sq. m. per month. Industrial lodgings cost from about € 290 to €640, meanwhile storehouses – from € 270 to €520 per sq. m. per month.
The average rentals for commercial lodging fluctuate between €14 and €26 per sq. m. per month. Average office rentals are about €8.7. Rentals for industrial lodging vary from €11 to €20.6; meanwhile warehouse rent taxes fluctuate from €3.3 to €6.8 per sq. m. per month.
Together with general increase in foreign investment in 2005, overseas investors have become more interested in buying real estate in Lithuania. One of the biggest deals in the Baltics in 2006 was the purchase of a shopping centre (in Vilnius) made by the British company Dawnay, Day Carpathian. The value of the purchase was EUR 33 mln. Lithuania also attracts companies from Scandinavia. The Finnish company Heitma has recently bought two malls in Vilnius. Moreover, World Trade Centres Association is considering the possibility to build a World Trade Centre office building, also in Vilnius. Some companies from Sweden, Italy and Denmark, specialising in logistics, furniture, electronics industries, mechanical engineering, etc., have invested in real estate in Klaipeda Free Economic Zone. Interest in regional centres such as Kaunas, Panevėžys, and Šiauliai is growing as well.
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