Lithuania: Why Commercial Real Estate Is Attracting Investors Again

Published on April 28, 2026 and written by Cyril Jarnias

The Lithuanian commercial real estate market is back on investors’ radars following a particularly sluggish 2024. Behind the numbers lies a contrasting landscape, where regional shopping centers, logistics warehouses, and certain well-positioned offices still offer attractive yields, in a country buoyed by strong economic growth, dynamic urban demographics, and a legal framework very open to foreign capital.

This article provides a detailed dive into investment opportunities in Lithuanian commercial real estate, based solely on data and findings from the provided research report.

A Market in Full Rebound After a Slump

After several years of growth, the Lithuanian commercial real estate investment market slowed abruptly in 2024. The total volume of acquisitions of modern, income-generating properties (offices, retail, logistics, industrial) reached only 230 million euros, a drop of about 43% compared to 2023 and 2022. This is the lowest level since 2014–2015. The year was marked by a total absence of “mega-deals”: no transaction exceeded 30 million euros, a first in many years.

However, as early as the first half of 2025, the market shows a clear rebound. Investments reached 183 million euros in the first six months, representing:

– +137% compared to the first half of 2024

– +21% compared to the second half of 2024

Dominance of Local Capital and Withdrawal of Foreigners

This restart is driven almost exclusively by Lithuanian investors. Between 2022 and 2024, local capital already accounted for 73 to 82% of volumes; in the first half of 2025, this share peaks at 90%. For comparison, between 2012 and 2021, local players represented only 37% of the market.

In other words, the balance has reversed: in a global context of high interest rates and risk aversion, major international investors have stepped back, with the exception of a few still-active Baltic funds (Latvian and Estonian). This withdrawal creates two simultaneous realities: a liquidity problem – fewer potential buyers for large-ticket items – but also more interesting entry windows for those willing to position themselves while competition is lower.

A Rather Supportive Macroeconomic Environment

On a macro level, Lithuania ticks several boxes appreciated by real estate investors:

The demographics of major cities support the market: the population of Vilnius is growing by about 1.7%, that of Kaunas by 1.1%, Klaipėda by 1.5%. The capital concentrates nearly three-quarters of the country’s foreign direct investment and is home to an ecosystem of over 740 startups, about 170 fintechs, 73,000 foreign residents, and nearly 1.2 million tourists per year. All these factors support demand for offices, retail, housing, and services.

Legal and Tax Framework: A Playing Field Open to Investors

Lithuania stands out for a particularly welcoming legal environment for foreign capital. The general principle is simple: equal treatment for local and international investors, strong protection of property, and high title security thanks to a centralized land register.

Access to Property: Clear Rules, Limited Restrictions

Foreign investors, whether from the EU or third countries, can acquire commercial, residential, or mixed-use properties without restriction. Only a few cases are more strictly regulated:

– agricultural and forest land, which in practice require a Lithuanian structure or special conditions

– certain strategic zones (borders, dune coastline, protected areas, critical infrastructure) subject to authorization

– temporary exclusion of non-resident Russian citizens, who cannot purchase real estate due to national security considerations

Investment Structures: Direct Holding or via Company

Investors have several vehicles at their disposal:

– direct holding in one’s own name, simple but without liability separation

– creation of a Lithuanian UAB-type company (private limited liability company), with a minimum capital of 2,500 euros, often chosen for leveraged portfolios or projects

– limited partnerships and, increasingly, REIT-type vehicles (listed real estate funds) supervised by the Bank of Lithuania

In practice, commercial assets are frequently housed in UABs, to facilitate financing structuring, investor entry, or to allow sales in the form of share deals (sale of the shares of the holding company rather than sale of the asset itself).

Taxation: A Competitive but Evolving Regime

From a tax perspective, commercial real estate in Lithuania remains globally competitive on a European scale, although several reforms are underway or planned.

Key elements to know:

– VAT

– standard rate: 21%

– sales of new buildings: subject to 21% up to 24 months after completion

– older buildings: in principle outside the scope of VAT (except by option)

– Rental Income and Capital Gains

– rental income: flat rate of 15% for both individuals and legal entities (via corporate tax for the latter)

– real estate capital gains: taxed at 15% as ordinary income, with exemptions for long-term holdings (e.g., more than 10 years for certain residential cases)

The investor must also consider overall transaction costs, estimated around 2.65 to 5.95% of the price in a “round-trip” (purchase then resale), including agent, notary, and legal fees.

Construction Regulation: Towards Greener Real Estate

The regulatory framework is resolutely moving towards sustainability:

– obligation, starting November 2024, to use at least 50% wood and organic materials in new public buildings

– progressive generalization of environmental certifications (BREEAM, LEED) considered essential for major new projects from 2025

– existence of a national assessment system (LBSAS) inspired by international standards but adapted to local specifics

The City of Vilnius even requires certification of certain commercial buildings in the city center in its urban plan, creating a two-tier market: on one side, modern, green assets, highly sought after by major tenants and institutional investors; on the other, obsolete buildings, subject to a discount of 15 to 20% according to cited studies.

Three Key Segments: Retail, Logistics, Offices

The Lithuanian commercial real estate market is structured around three main pillars: retail, storage/logistics, and offices. Each presents a specific risk-return profile.

Retail: Shopping Centers and Supermarkets at the Forefront

The retail sector has emerged strengthened from the 2023–2024 period. It concentrates the majority of investments:

In 2024 as in the first half of 2025, retail remains the driver of transactions, with a fairly specific asset profile.

Regional Shopping Centers: Savas, Arena and Others

The largest deals of 2025 are in regional shopping centers:

– in Kaunas, NDX Group buys the Savas shopping center (over 13,000 sqm, opened in 2004) from Hanner for an estimated value around 30 million euros

– in Šiauliai, the Lithuanian company Mažoji Venecija acquires the Arena center (over 11,000 sqm) for 11 million euros

These operations illustrate a marked interest for established assets in major cities, with strong local anchoring and stabilized customer flows. Investors aim either for pure yield strategies, or repositioning through modernization, mixed-use blending, and upscaling of the offering.

In Vilnius, a new 9,000 sqm shopping and entertainment center opened at the end of 2024 in the Kalnenai district, with the Iki chain as the main anchor. Another 7,400 sqm project is under construction in the Šeškinė district (MasterKeyBaltics) for delivery at the end of 2025, while the Mada center will benefit from over 50 million euros in renovation works.

Medium-Sized Supermarkets: A Highly Coveted Asset Class

The real star segment, however, lies in medium-format food stores (1,500–4,000 sqm) occupied by major grocery chains. In this niche:

– ten supermarkets of 1,500–2,500 sqm were acquired in 2024

– nine units of the same type were repurchased in the first half of 2025

– in total, nearly 30 supermarkets of this format have changed hands in two and a half years

The emblematic transaction of 2024 is the sale of four new Lidl stores to a fund managed by DIFF Assets. Lidl, which entered Lithuania in 2016, now operates more than 80 stores in 29 cities. The rise of these food players (Lidl, Iki, Maxima, etc.) creates a base of strong tenants on long leases, which secures cash flow for investors.

Rental and Consumption Dynamics

The retail fundamentals remain robust:

– retail sales up 4.8% in 2024 (inflation-adjusted), after a decline of 1.3% in 2023

– e-commerce representing 9.2% of retail turnover, with a record volume of 1.79 billion euros

– stable or increasing footfall and turnover in Vilnius’s main shopping centers

Rents for 150–300 sqm units in the major shopping centers of the capital range between €15 and €40/sq.m/month, prime small spaces can reach €50–€75/sq.m, while large “anchor” tenants pay around €9–€14/sq.m. On prime shopping streets (Gedimino, Pilies, Vokiečių, etc.), rents also range between €15 and €40/sq.m, with a slight increase of 1 to 3% in 2024.

For an investor, these figures reflect a relatively balanced market, where rental growth remains moderate but positive, and where truly prime sites retain a high pricing power.

Logistics, Warehouses and “Stock-Offices”: The Other Big Winner

The warehouse / industrial segment is the one changing dimension the fastest. Long underrepresented in investment volumes, it now carries considerable weight:

– share of total investment: 11% in 2024, but already 33% in the first half of 2025

– explosion of supply in Vilnius, where modern warehouse space surged by 13% in 2024 to reach 1 million sqm

– over 80% of modern capacity located within city limits, often along the Vilnius–Kaunas and Vilnius–Minsk axes, or in the southwestern industrial zones (Kirtimai, Vilkpėdė, Aukštieji and Žemieji Paneriai)

Major Transactions and Key Players

Recent major movements illustrate well the repositioning of investors towards this asset class:

– Prosperus buys in 2025 the VMG Technics R&D park (21,000 sqm) in the Klaipėda district for 26 million euros, with the tenant remaining on a long lease

– the same fund buys from Eften Capital warehouses of over 28,000 sqm in Kaunas, for just over 18 million euros

– in 2024, the largest warehouse transaction was the sale by Eika Asset Management of a 5,600 sqm logistics building in Kaunas, acquired by the pharmacy chain Camelia, already the tenant

Massive Logistics Expansion

Demand is fueled by the rise of major grocery chains and e-commerce. In Vilnius:

– Lidl delivered a 64,000 sqm logistics center in 2023

– Maxima commissioned a 46,000 sqm hub in 2024

Simultaneously, a hybrid model is developing rapidly: so-called “stock-office” projects, which combine showroom, offices, and logistics, with over 50% of the area dedicated to storage. Groups like VPH, Darnu Group, SBA Urban, or Sirin Development play a central role in this new generation of assets.

Sirin, for example, has already developed over 170,000 sqm of warehouses in the Vilnius region since 2017. At least six new projects totaling about 100,000 sqm are to be delivered in and around the capital in 2025. Added to this are “Urban HUB” developments in Kaunas and Vilnius, backed by the EBRD, for nearly 88,000 sqm of “stock-office” space valued at 90 million euros.

Yields and Rents: An Attractive Risk-Return Profile

Rents for modern warehouses remain competitive:

Vacancy in modern warehouses is around 5%, which leaves room to absorb new deliveries while retaining some rent-setting power. For the investor, recent logistics assets in prime zones often trade with yields around 6.5–7%; older warehouses or in secondary locations can target 8–9%, or even more if tenant risk is more pronounced.

Offices: A More Selective Market, but Rich in Targeted Opportunities

The office market is the most contrasting segment. The long-term dynamic remains positive, especially in Vilnius, but the last two years have been marked by a drop in leasing demand, rising vacancies, and increased selectivity from investors.

Vilnius: Plenty of Supply, Demand in Flux

The capital concentrates most of the stock:

– nearly 1.2 million sqm of modern offices

– 41% in Class A, 59% in Class B

– a vacancy rate rising from 5.9% to 8.8% in two years, exceeding 100,000 sqm of vacant space for the first time

In 2024, only five office projects were delivered, adding 24,700 sqm to the market. Yet, about 70,000 additional sqm are expected in 2025, maintaining pressure on vacancy, especially for aging or poorly located B buildings.

– shorter lease terms (2–3 years)

– flexible solutions and subleases

– space rationalization with the development of hybrid work

Rents, however, slightly increased, by about 2% in 2024, driven mainly by the high-end segment. Current ranges are as follows:

Since late 2020, Class A office rents have increased by about 17%, those of Class B by about 13%. The most performing buildings – new, green, BREEAM or LEED certified, in prime locations – remain in high demand by large companies, especially in tech and business services. Conversely, obsolete buildings suffer a double penalty: rising vacancy and the need for significant investments to meet new expectations (energy efficiency, comfort, flexibility, services).

Transactions and Valuations

On the investment side, offices represented 31% of volumes in 2024 (70 million euros), but only 20% in the first half of 2025 (36 million euros). The emblematic deal of 2025 is the acquisition by Groa Capital of the Meraki business center in Vilnius (over 8,000 sqm) for about 16 million euros, sold by a fund managed by Northern Horizon Capital.

Other notable transactions in 2024 include:

– the sale of a complex of administrative buildings totaling 16,000 sqm in central Vilnius to Realco

– the repurchase by a fund linked to ZeroSum Asset Management of three office buildings on Švitrigailos Street

– the acquisition by Eriadas and DIFF Develop of the Ergo headquarters on Geležinio Vilko Street, with a mixed-use redevelopment project near Vingis Park

In this context, valuations are tightening: older buildings or in secondary locations must offer higher yields to compensate for risk (up to 10–11% expected by some investors in smaller towns or aged assets), while prime new assets in Vilnius trade around 6.5–7%, or even less for food retail space.

For a selective investor, the window is double:

– opportunities to reposition well-located Class B buildings, upgrading them to “green” standards

– possibility to position oneself on prime projects still under development at initial yield levels higher than in Western Europe, while benefiting from potential capital appreciation

Yields, Prices and Risk Perception

Based on market data, Lithuania today offers a risk-return profile difficult to find further west:

– new assets in the capital or highly sought-after locations: prime yield around 6.5–7%

– well-positioned standalone supermarkets: yield slightly below 6%

– older assets in secondary cities: targeted yields of 8–11%

The obvious counterpart to these yield levels is lower liquidity than in Germany or France and potentially higher volatility in case of a macroeconomic or geopolitical shock in the region. This is precisely why investors require higher risk premiums for smaller towns and non-“core” assets.

Financing and Capital: A Diversified Ecosystem

The financing of commercial real estate in Lithuania does not rely solely on traditional bank credit. A rapid diversification of capital sources is observed:

– medium-scale bond issues by local or regional real estate operators

– co-financing by international institutions (EBRD, European Investment Bank) for structuring projects, often green ones

– rise of real estate crowdfunding platforms, sometimes with entry tickets of only 10 euros

Recent examples illustrate this range:

On the interest rate side, commercial real estate loans remain more expensive than standard residential financing, but prospects of monetary easing at the European level suggest a more bearable cost of capital in the medium term, which could revitalize demand for office and logistics space.

Structural Trends: Green, Hybridization, Localism

Beyond the numbers, several underlying trends are shaping the future of commercial real estate in Lithuania and, consequently, investment opportunities.

The Green Turn: From Niche to Norm

Certifications like BREEAM, LEED, LBSAS, or WELL are no longer mere “marketing bonuses.” Major institutional investors, especially foreign ones, now condition an increasing part of their allocations on the environmental performance of assets. The Lithuanian market follows this trajectory:

– a growing proportion of new offices and logistics centers aim for BREEAM or LEED certification

– national legislation progressively imposes sustainable construction criteria, notably for public buildings

– emblematic examples like the Continental Automotive plant in Kaunas, certified LEED Gold, pull the market upward

For investors, this creates a double effect:

Hybrid Work and Rise of Flexible Spaces

The office market in Lithuania is directly impacted by the generalization of hybrid work:

– approximately 70–75% of employees whose job allows it already work in a hybrid model

– in the GBS & ICT sectors, nearly 90% work remotely at least one day a week, 25% being fully remote

– employees place increasing importance on flexible work policies when choosing an employer

Consequence: strong demand for coworking spaces, flexible offices, and “serviced offices”. At the EMEA regional level, coworking space has multiplied by more than five in a decade, and Lithuania is positioning itself in this movement, notably via operators like Workland in Vilnius and Kaunas.

This evolution does not mean the death of the traditional office, but forces investors to favor:

– buildings offering modular floorplates, services, collaborative spaces

– more flexible leases, sometimes 12 to 36 months, with risk-sharing between owner and flexible space operator

Buildings unable to adapt to these uses risk, in the long term, joining the pool of “obsolete assets” estimated around 25% of the stock in some studies.

Growing Weight of Local Capital

Finally, the rise of local capital is not a cyclical phenomenon. In a few years, Lithuanian investors have gone from being a minority (37% share in 2012–2021) to ultra-dominant (75–96% between 2022 and 2025). They have a fine knowledge of the local terrain, an appetite for medium-sized deals, and often a longer horizon than some foreign opportunistic funds.

For an international investor, this can be seen as a handicap – more local competition – or as an opportunity to partner with Lithuanian partners to access off-market operations, co-invest, or delegate operational management.

Where Are the Best Opportunities, Specifically?

Based on all available data, several pockets of opportunity emerge.

1. Supermarkets and Retail Parks Anchored in Regional Cities

Transactions on Savas and Arena, as well as the numerous sales of Lidl or Depo supermarkets, show that a portfolio of medium-sized food assets in major cities and regional centers can offer:

– robustly indexed cash flow

– leading tenants

– a net yield close to 6% on well-selected locations

Geographic diversification (Vilnius, Kaunas, Klaipėda, Panevėžys, Šiauliai, medium-sized towns) allows mitigating local risk while benefiting from still reasonable rents.

2. Warehouses and “Stock-Offices” Around Vilnius and Kaunas

The logistics boom in Vilnius (1 million sqm modern space) and massive development plans for 2025 make this segment a natural candidate for core+ or value-add investors:

Recent deals by Prosperus, the entry of Panattoni into the Baltic market, or the significant financing from the EBRD for Urban HUB confirm the growing depth of this segment.

3. “Green Prime” Offices in Vilnius, and Redevelopment of Class B Assets

Despite rising vacancies, prime offices in Vilnius remain under-supplied for large companies seeking large, modern, and green spaces. Recent or ongoing projects, like Meraki or future campuses on the banks of the Neris, illustrate the market’s capacity to absorb high-end products.

In parallel, many relatively well-located but aging Class B buildings can be acquired at attractive yields, with a clear strategy of:

– energy renovation

– improving comfort (natural light, ventilation, common areas)

– repositioning towards flexible or multi-user formats

4. Logistics Villages and Mixed-Use Assets Along Major Axes

The country’s geography, with the rapidly growing port of Klaipėda (over 1 million TEU in 2023, +57%), economic zones in Šiauliai or Panevėžys, and structuring road axes, opens prospects for logistics parks, “stock-office” complexes, and service platforms for heavy trucks and cross-border trade.

Recent operations, like the acquisition by TOKS of a 42,000 sqm site in Vilnius for a transport service center, give a glimpse of these opportunities at the crossroads of logistics, automotive services, and corporate real estate.

Conclusion: A Niche Market… on a European Scale, but Rich in Angles of Attack

Lithuanian commercial real estate does not rival, in volumes, the major Western markets. This is precisely what makes it fertile ground for investors capable of working on tickets of 5 to 30 million euros, accepting a degree of country risk, and betting on the progressive convergence of the Baltic region towards Northern European valuation standards.

It remains to choose the right combination of segment, location, and strategy (core, core+, value-add, development), integrating from the start the growing requirements in terms of sustainability and flexibility. For those who can read these parameters finely, Lithuania today offers a risk-return ratio rarely available on the more mature markets of Western Europe.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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