Office space real estate market in Kaunas: steadily growing and diverse
Photo by Magnum.
In the last few years, new business centers and premises were being built quite rapidly in Kaunas. Entire business districts are being formed on Karaliaus Mindaugo Avenue and Jonavos Street. The development of modern offices is also pushing into Naujamiestis, Vilijampolė, and Žaliakalnis districts. The developers of the business centers reveal what exceptional solutions helped each of them to ensure success and stand out from the competition and also share ideas about the future.
“The construction of new business centers gives Kaunas a competitive advantage over other Lithuanian cities; an opportunity to expand the business and create jobs in the central part of Lithuania, from where it is easy to reach any region of the country. It also provides an excellent opportunity for local businesses to improve the working conditions of their employees by relocating them to new buildings with the latest technology and more convenient locations,” notes Marius Petrikauskas, a real estate expert and managing partner at ProConcept.
However, according to him, currently, the market of business premises in Kaunas has slowed down. Due to the COVID-19 virus, businesses are carefully monitoring the situation and are in no hurry to make decisions about the development or renovation of premises.
“I would say that what is happening now is more of a redistribution of spaces. Therefore, it is quite difficult to assess the trends of the near future. I think that until we fully know how the pandemic will be stopped, it is likely that the commercial real estate market will remain cautious. It is believed that due to cost reduction, economy-class cooperative spaces may become more popular,” the expert considers.
Meanwhile, Šarūnas Tarutis, head of investment and analysis of real estate project development and management company CITUS, says that he sees a lot of opportunities for development, “Kaunas successfully attracts large foreign investments, world-famous brands settle here, therefore the need for office space is likely to grow. On the other hand, many young, fast-growing companies and start-ups are emerging in this city, which will also sooner or later have a need for modern, comfortable, and smart offices. Thus, in Kaunas, this segment has the potential to grow and we should see a rapid development of new office space real estate in the next 2-4 years.”
The advantage of the leader: large areas in the central business district
Photo by Magnum.
The Magnum business center, which is opening its doors in the very heart of the city and is eagerly awaited by both business and city residents, who are happy about the newly-emerging image of Kaunas, is preparing for its official launch. The commercial premises of 2,000 square meters accommodates Luminor bank’s client consultation center based on a new concept, soon to be opened Tez Tour travel agency, a telecommunications company, a dental clinic, a beauty salon, and other service-providing companies.
“Communicating with potential office tenants, we see that such a bouquet of daily services is an important factor in choosing an office in addition to the requirements for the quality of the complex and the strategic location of the business center,” says Šarūnas Matijošaitis, head of Vičiūnai Group developing Magnum project.
According to him, office spaces larger than 1,000 square meters on one floor is an important advantage of Magnum, the largest A+ class business center in Kaunas. In this way, even large companies fit on one or two adjacent floors. Meanwhile, in business centers with smaller floor spaces, colleagues who want to consult each other, have to run between many different floors and thus waste precious time.
“As for the place chosen by Magnum, we wanted to contribute to the revitalization of this place in Kaunas, which has huge potential but has been undeservedly abandoned for many years. We see that it has paid off, and already this part of Karaliaus Mindaugo Avenue is turning into a real central business district of Kaunas,” Šarūnas Matijošaitis says.
Investment not only in business but also in beautifying the city
This year on March 11 one more location of commercial premises lit up in Lithuanian tricolor on the map of Kaunas. This is how a business center Alia congratulated the city and celebrated its launch. The center located on the bank of the Nemunas is managed by Klaipėdos terminalo grupė (KTG), which chose Kaunas not only because of the business development opportunities available here but also because of its desire to contribute to the creation of a more beautiful city. The business center blends into the panorama of Santaka and Kaunas Castle and borders the Kaunas River Pier, from where the historical routes of Raketa to Nida have been renewed.
Photo by Alia.
“We are focused on medium and large companies that are looking for premises starting from 500 square meters and pay special attention to the quality and location of the building – we are very close to the city center. The chosen strategy of renting the building by renting premises in floors, without dividing it, has paid off. This project of ours is funded by KTG, so we have more freedom to choose the right, reliable tenants; we also have the opportunity not to rush into dividing the premises into small spaces. We are more flexible in negotiating with clients than other large developers of real estate projects,” Ramunė Venslauskienė, head of KTG, says.
Alia Business Center, which has opened its doors in a special place in Kaunas, is a 6-storey, fully equipped open-office, A + energy class office building with a total area of over 5,000 square meters. Currently, about 70 percent of the space is rented out; the building accommodates a restaurant of the European cuisine OKATA. The KTG office takes up around 600 square meters of all the space and the total investment in the project amounted to 11 million Euro.
According to business center managers, the quarantine period did not stop inquiries and interest in business center premises, on the contrary, it helped to decide. Companies that planned to expand before the pandemic had more time and opportunities to assess all possible risks and finances before any transactions.
An idea dictated by the history of the city
Photo by Radio City.
One of the more original multifunctional spaces should open its doors in Žaliakalnis next year, in the legendary Kaunas Radio Factory. Radio City will be the name of the center, which will offer spaces for creative, progressive, cultural, and business people and teams who generate ideas. According to Viktorija Mačionytė, Marketing Manager of the Radio City, the idea of such a center was dictated by the object itself, “Kaunas Radio Factory has never been just buildings. In addition to work, an active creative and cultural life took place here and many bold people, ahead of their time, created fantastic things: from engineering, radio electronics to cinema, newspapers, and music. The legendary song “Freedom” by Eurika Masytė was also born in this factory. That’s why Radio City is about people, not buildings. So, we focused on the vision to resurrect the spirit that was here before and give it a modern form that would be relevant to today’s Kaunas residents.”
The developers of the project plan that the first residents of Radio City’s lofts and workspaces will begin settling in early next year, “We do not intend to compete fiercely in the office real estate sector. With Radio City, we will offer a not-so-typical multifunctional model that would be more appealing to dynamic but small teams looking for collaborative spaces, creative oases, and an exclusive neighborhood of food-court and living spaces.”
The rapid growth of the supply of business premises has been clearly visible since 2016, and currently, according to the international real estate consulting company Newsec, the supply of offices in Kaunas amounts to as much as 253,032 square meters, which is 12 percent more than in 2019.