Results

 

 

Baltic Real Estate Commercial Success Award 2006 has been closed. This competition for office buildings was held for the first time and organized by Colliers International real estate consulting company, Deloitte Latvija auditing & consulting company and Dienas bizness daily newspaper.

 

  

 

Baltic Real Estate Commercial Success Award 2006 has been given to:

 

 

The competition was organized to identify general business environment on Baltic market of office premises, compare performance of office buildings, name most successful office buildings in the region. 10 office buildings have applied for participation in the competition, of which nine were from Latvia and one from Lithuania. According to Colliers International classification, four buildings met Class A requirements, four – Class B1 and two – Class B2.

 

The winners were determined by comparing the cost, income and profit indicators of all objects, who applied for participation in the competition as well as qualitative features and possibilities offered by the buildings, based on information delivered by participants to the competition.

 

All participants to the competition have received an evaluation by the experts and their advice on their office building: its advantages, drawbacks, possibilities and threats compared to similar properties. Seeing their office building on general market situation background, the owners of office premises will be in a position to consider optimization of particular functions and costs.

 

While only office buildings were evaluated in 2006, in future it will also be other commercial real estate: shopping malls, logistics centres and warehouses, hotels, as well as multipurpose objects. A wider jury will be involved in next competitions and criteria for evaluation of buildings will be extended as well.

 

Mihails Morozovs, Colliers International Managing Partner in Baltic Countries: “Situation on the market of office premises is still rather chaotic. Though not high, the competition between office buildings exists. The supply grows continuously and differences between classes of offices become clearer, the market now can be split into office building of classes A, B1, and B2. Still, a part of market players finds it more profitable operating on a disordered market, not disclosing their work principles. With growing number of projects the situation will change: the owners will have to prove their building actually meets the class declared and the rent charged. If compare situation on office premises market in Riga and in other Baltic countries and countries of Central and East Europe, the market development potential is quite evident. We still have a relatively small number of modern office buildings. Office premises of Class A and B1 are demanded most, and the supply is just forming in these niches.”

 

Ilze Opmane, Senior Associate with Deloitte Latvia: “Today, average maintenance costs of Class A office buildings are about twice as high as of Class B 1 office buildings, while their rent differs insignificantly. Net profit per square metre is actually the same in both Class A and Class B office buildings, which is not right.

 

To construct a new Class A office building or rebuild an old house into the one meeting Class A requirements, considerably bigger investments should be made compared to a Class B office building. Since the profit per square metre is currently in fact the same for both Class A and Class B buildings, the investments into Class A offices are less lucrative compared to Class B buildings. Therefore developers are more interested in construction and development of Class B office buildings. I expect that next 2 to 3 years will demonstrate an extensive construction of Class B1 office buildings due to their higher profitability; however, in the future there will be growing competition forcing the net profit to drop.”

 

Dace Andersone, Acting Editor-in-Chief of Dienas bizness daily newspaper: “It is striking that more bank office buildings were applied for the competition while not high enough was the expected response from owners of other office buildings. It were just the banks who in recent years affected the office buildings market, accelerated its development and contributed to introduction of market transparency standards. In its turn, the more transparent the market is, the more reliable is business forecasting. Businessmen are welcome to be involved more actively in the next year competition since it is an opportunity to not only compare their own business to other market players, but also gain valuable recommendations from experts.”

Colliers International is one of the largest and most experienced expert on the Baltic market with local and international professionals providing a global know-how to its rapidly expanding local client base. Colliers International has challenged the region’s real estate sector by serving as a unique “one-stop” real estate agency providing its customers with a full range of services, starting from a comprehensive real estate concept development up to brokerage, marketing and many more.

About Deloitte

Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries with access to the deep intellectual capital of 135,000 people worldwide. Deloitte is one of the leading professional services organizations in Latvia providing services in audit, tax, consulting, and financial advisory services through over 70 national and specialized expatriate professionals. Known as an employer of choice for innovative human resources programs, it is dedicated to helping its clients and its people excel. For more information, please visit the Deloitte website at www.deloitte.com/lv.

About Dienas Bizness

Dienas Bizness - the leading business newspaper in Latvia with daily circulation of 12 000 and readership 92 000 is 100 % owned by Sweden's Bonnier Business Press. The readers are Latvian speaking managers, business proprietors and professionals aged 20-49 with medium to high income. In addition to daily business news and commentary, Dienas bizness publishes regular supplements in the daily paper on construction and real estate, new technologies, education and the employment market, automotive, and positions available.

 

Additional Information:
Margita Otto (Colliers International) – tel.: (+371) 7783333, mob. tel.: (+371) 29173173

Mārtiņš Zutis (Deloitte) – tel.: (+371) 7814162

Ingrīda Drazdovska (Dienas Bizness) - tel.: (+371) 7084400 or (+371) 7084444