The crisis has rather sharply separated the good real estate projects from the bad ones in terms of location, quality and management. Moreover, despite the spring optimism, office space rates have stabilized without increasing significantly, considers Newsec Latvia head Olga Kozina.
Although now the average share of vacant office space in Riga is still quite high (22–25%), the most successful projects manage to attract new tenants, the expert indicates.
She mentions several factors determining successful attraction of tenants in the office space segment without the lowest possible rent rates, such as logical and appropriate location for business, high quality buildings, sound design, parking facilities and a professional and thought-out management policy.
Management costs can be saved significantly by using high quality materials that require less time and resources for repair and maintenance. Public utility costs are reduced notably by energy-efficient solutions – facade and roof insulation, window and door quality, etc. Although comfort costs money, the opportunity to save without losing quality often determines the potential tenants’ choice, Kozina says.
She remarks that currently the high-end office space tenants require not only a convenient and appropriate location for business, but also functionality and efficient use of office facilities. A functional floor design without inconvenient corners, wrongly situated columns or unnecessary partitions enable placing more work stations with the same floor space, and consequently employing more workers. While, rationally-planned public space proportions have a direct effect on operational costs.
Source: http://bnn-news.com/expert-crisis-weeded-bad-real-estate-projects-25675