● THE LATVIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • AUTUMN 2020
THE LATVIAN PROPERTY MARKET FULL STEAM AHEAD IN LATVIA Based on BNP Paribas' forecasts, Latvia's GDP is expected to fall by 1.4% in 2020, one of the lowest declines in the world. In terms of commercial real estate, the Latvian property development market remains active. New properties across the office and retail segments will create new supply for tenants and potential investors. However, the investment market volume in H1 has been relatively slow. The transaction market saw limited activity in Q2, and the lion’s share of investment in the first half-year was completed at the beginning of 2020, with a total
invested amount of just over EUR 40 million. Among others, EfTEN Capital acquired one office building and two logistics centres in the first quarter. The second half year is expected to be more active, with investment expected into the retail and logistics segments. Total investment volume in 2020 may be half of the previous year’s level, with a volume of around EUR 90 million expected.
Contact: Kristina Živatkauskaitė k.zivatkauskaite@newsec.lt
Photo: Capitalica Asset Management
Latvia’s economy showed a smaller decline in 2020 than the EU as a whole. In the first and second quarter of 2020, Latvian GDP fell by 1.5 and 9.6%, respectively. This was the sharpest decrease among the Baltic states. However, the economic downturn has been less severe than anticipated. Unemployment has increased in the whole country and reached 8.6% in the second quarter of 2020. Based on the State Employment Agency's data, unemployment growth stopped and started to decrease in July. The overall economic downturn in 2020 may turn out to be weaker than projected as of mid-2020.
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