Baltic Logistics and Industrial Outlook, 2025 Q3 -

Baltic Logistics and Industrial Outlook, 2025 Q3

The Q3 2025 results across the Baltic logistics and industrial sector highlight a stable yet increasingly polarised market, shaped by steady development activity, normalising vacancy levels, and strong demand for modern, energy-efficient facilities. While new supply continues to enter all three capitals, it is the quality, functionality, and ESG readiness of assets that increasingly drive tenant decisions.

Vilnius moved into a balanced phase as warehouse vacancy normalised at 5%, reflecting both newly visible “hidden” space and concentrated demand for modern, efficient buildings. The market delivered 59,000 sqm year-to-date, with total completions expected to reach 85,000 sqm by year-end. The development pipeline has moderated to 117,000 sqm, signalling fewer speculative starts and a shift toward build-to-suit and risk-managed projects. Vacancy pressure is now most visible in older and recently delivered speculative assets, while prime space remains in high demand. Rental levels are broadly stable, with incentives applied selectively to secondary properties.

Riga recorded strong new supply in the first three quarters, adding over 80,000 sqm of industrial space, including Amber Beverage Group’s new high-bay warehouse and Hepsor’s Ulbrokas 34 stock-office project. The warehouse stock now approaches 1.7 million sqm, supported by a significant pipeline of 120,000 sqm. Vacancy in prime industrial space increased moderately to 3% due to slower pre-leasing, yet demand for newly built premises remains robust, with rents for modern I&L facilities rising to €5.5–5.7/sqm/month. Interest in stock-office formats continues to grow, highlighting shifting tenant preferences toward flexible hybrid solutions.

Tallinn added 21,000 sqm of new logistics space in Q3, including notable completions such as the Koplipere tee 5 warehouse and a new FedEx terminal in Airport City. Total stock reached 1.63 million sqm, with a strong pipeline of 84,000 sqm under construction. Vacancy rose to 4.2%, mainly due to older buildings struggling to meet current functionality and efficiency standards. Prime rents remain stable at €5.2–6.5/sqm/month, while average industrial rents hover around €5.4/sqm/month. The market continues to show resilience, supported by ongoing demand for high-quality, modern logistics assets.

Across the Baltics, the divide between modern ESG-ready stock and older secondary premises is widening. Tenants increasingly prioritise efficiency, functionality, and sustainability, reinforcing strong demand for new, high-quality logistics space across all three capitals.