Colliers Baltics analytical data on street retail spaces in the capital of Latvia reveal that the street retail space segment in general has not been developed and shopping streets have not been established in Riga. Most international network clothing and footwear stores have moved to shopping malls, rarely maintaining a representative store in the city centre. In addition, bank branches and telecommunications service operators have almost completely left street retail spaces in the centre of Riga.
Statistical data show that during the last 20 years the number of people living in the centre of Riga has decreased by nearly 40%. People are mostly moving to the suburbs of Riga, returning to the centre for work, services, or cultural events. This trend and people's habits also affect the range of operators and brands represented in the city centre. In recent years, street retail spaces have been actively used by small grocery and convenience stores, as well as cafes, mainly offering coffee and pastries. They are often located in the more active streets of the centre. Due to the restrictions caused by Covid-19, residents are increasingly choosing to shop in small shops near their home or online.
“With the growing popularity of online shopping, the retail sector is changing rapidly. In order for customers to choose brick-and-mortar stores, they must offer a unique product, quickly and easily available services, or provoke special emotions in their customers. Shops in the city centre, both in Riga and elsewhere in Europe, are having a harder time adjusting. In the past, a steady flow of people was sustained by both inhabitants of the centre and those who visited the centre on a daily basis due to work, studies and the necessity for other services. Various luxury shops, cafes, restaurants, bars, health and beauty service providers are experiencing severe hardship due to the pandemic. Small shops in the Old Town are experiencing especially heavy losses as a result of the almost complete obliteration of the tourism industry,” says Ēriks Bergmans, Head of Colliers Baltics Agency.
Colliers Baltics researchers concluded that rental prices for street retail spaces in Riga have been declining in recent years, and an even faster decline is expected as a result of Covid-19. Currently, the proportion of vacant premises in the central part of Riga is very high – approximately one fifth of all premises are not leased. Given the second wave of Covid-19 and the restrictions imposed, the authors of the Colliers study conclude that this situation is not expected to improve in the near future.
Approximately 70% of leases taking place in the street retail segment are for areas of up to 250 m2.
The supply is proportionate: most retail spaces currently on offer in the centre of Riga are for areas of up to 300 m2. Given the high overall vacancy rates, the supply of larger spaces remains moderately high. The average street retail space available on the market is 104 m2; the rent is 10‒15 euros per m2. The rent depends on the condition of the specific premises, the size and number of shop windows, visibility, the flow of pedestrians, and the location in the central part of Riga.
|STREET RETAIL IN THE
CENTRAL PART OF RIGA