When choosing territories for the development of commercial real estate objects, developers are increasingly turning their attention to the Kaunas Free Economic Zone. In recent years alone, four companies have implemented their projects or announced their beginning. And many medium-sized enterprises have settled or are preparing to do so in the upcoming years in the administrative buildings or warehouses built by the aforementioned construction companies. Some of the new objects are built according to the general trends observed in the market, others are built according to the needs of the future tenant, on a built-to-suit basis.
According to Vytautas Petružis, Director of Kaunas FEZ Management Company, the significant increase in interest of real estate developers offering different types of commercial premises is a timely result of the rapidly developing infrastructure and advantages offered by the territory, “The geographical location of Kaunas FEZ, tax benefits and the flexible lease offer by the commercial real estate developers has a potential to attract companies that are planning to expand in Lithuania or the region itself. The growing supply of real estate of various sizes available for rent at Kaunas FEZ means more attractive opportunities for suppliers to settle next to companies already operating in the territory.”
Business places much higher demands on commercial real estate
Meanwhile, real estate development companies are noticing that businesses are increasingly appreciating the benefits of the built-to-suit principle.
According to Viktorija Orkinė, Managing Director at UAB Eika Asset Management (EAM), the experience of working with commercial real estate in recent years shows that tenants have much higher requirements than, say, a decade ago, “Business knows better what it needs. It also understands that sometimes when all needs are met immediately, it will cost less in the end than it would if they had to adapt to the already existing situation. By renting a building developed according to its needs, the company improves its internal processes, and it no longer needs to invest in additional equipment to adapt to an existing building, and it does not have to sacrifice comfort and job post quality.”
At the beginning of this year, EAM started to build such an object in the territory of Kaunas FEZ, which meets the highest requirements of modern quality set by the customer. According to the signed agreement, the logistics center of UAB Tamro, the German wholesale distributor of pharmaceuticals and the manager of BENU pharmacies, will be located here. It will include modern and digital delivery services covering the entire logistics chain: warehousing, transportation, goods and invoice management.
When designing this building, great attention was paid not only to the highest quality product storage conditions, but also to the needs of employees: minimalist, cozy, ergonomic and functional rooms with smart ventilation, air conditioning and dehumidification systems. When setting the requirements for the quality of the building, its durability and energy efficiency were also emphasized to be able to meet the requirements of BREEAM, the international standard for sustainable buildings.
V. Orkinė notices that the latter aspect is becoming more and more important for tenants, “Own solar power plants and electric car charging stations are becoming standard in newly constructed buildings, it is no longer just a nice thing to have. We are also looking to improve the older buildings so they could at least meet the BREEM’s “very good” rating.
The new Tamro building is being built on a 2.5-hectare site at the Kaunas FEZ. It is planned that the tenant will move into it in the beginning of 2023.
Further development is planned
At the beginning of 2021, the real estate development company REES started to develop the multifunctional premises project – FEZ Business Park. Today this project is practically completed. A total of five buildings of 600 square meters each were built, and medium-sized companies have already started moving in.
According to Martynas Židonis, the head of REES, the tendency of recent years is that more and more companies are looking for higher quality commercial premises that would be multifunctional: serve as an office, a shop, a storage and production space. “A strategically convenient place with convenient transportation, developed and reliably maintained infrastructure, and an attractive neighborhood is extremely important to our customers. It was precisely that that we were able to offer them at Kaunas FEZ. Plus, well-designed and constructed buildings meet the needs of even the most demanding customers,” M. Židonis says.
REES has already started designing the second stage of the FEZ Business Park. The project is aimed at small and medium-sized enterprises, and the total area of future buildings will reach about 24 000 square meters.
“We believe that we will succeed in achieving the set goals: from rational planning to economical use of energy resources. To this end, we are working with foreign consultants, looking for good practices and ideas that we could apply in our project. We want to offer the market a well-thought-out and detailed project,” M. Židonis explains.
The company intends to announce the information about the start and the expected completion of construction by the fourth quarter of this year.
The construction of modern warehouses
Next year, the first stage of the commercial real estate construction project in Kaunas FEZ will be implemented by the industrial real estate development company Sirin Development. The investment of 41 million euro is intended for the 63 000 square meter warehouses that will be built in the area of 12 hectares. In the first stage until the third quarter of 2023, it is planned to build 20 000 square meter warehouses on Jėgainės Street, and in the second stage, it is planned to build the warehouses that take up more than 43 000 square meters on Gamybos Street, which the company expects to complete by the end of 2025. These will be modern energy class A+ storage and administrative premises that meet the highest standards of quality and sustainability.
According to Laurynas Kuzavas, the head of the company, the demand for such commercial premises is mostly increased by the business focused on domestic market, looking for a flexible supply of space, energy efficiency and a working environment that meets the expectations of employees.
It is expected that due to the convenient location of Kaunas FEZ and the possibility to rent modern warehousing facilities of more than 1000 square meters the project will be especially appealing to those companies that are considering development opportunities in Lithuania, seek to optimize logistics costs and ensure prompt and smooth customer service in the country.
Up until this point, Kaunas FEZ has attracted 47 foreign and local investors that are operating in the service and manufacturing sectors, applying advanced technological solutions and developing innovative products. Since the first investor came in 2005, more than 7800 jobs have been created in the territory of Kaunas FEZ, more than 100 companies have been founded, and more than 1.23 billion euro in direct investments have been attracted.
