LITHUANIA - Deka Immobilien, the German asset manager, has shown renewed interest in the Lithuanian retail property market despite inflation pressures on the local economy, by purchasing the Akropolis shopping centre in Vilnius.
This is the second such investment by Deka, as it bought the Big Shopping centre in Vilnius last year for its €2.7bn Westinvest Interselect fund.
The deal was signed for an undisclosed sum, with the support of Jones Lang LaSalle and RE&Solution, to take control of the shopping centre which was only completed last year but now has 263 tenants, including many of the large retail brand names.
The Westinvest fund was 75% invested in office space to March 31 2008, and had over 5% of its car parks, along with 9% in the catering industry market, 6.7% in hotels, 2% in industrial, so retail is a relatively small element of the fund.
That said, a spokesman for the fund said officials made this second purchase, despite concerns about the impact of slowing consumer spending on potential tenants, as Lithuania still has significant room for growth in the retail property market and compares favourably with its neighbours Estonia and Latvia.
"We expect that GDP growth in Lithuania will moderate in 2008, from 8% in 2007 to 5,5% in 2008, because of decelerating investment growth and widening current-account deficit. However, in comparison to Estonia and Latvia the economy remains strong," said the spokesman.
"The retail sector is still expanding in the baltic countries though high inflation and rising interest rates have dampening impacts on consumer spending. Lithuania is lagging behind Estonia and Latvia with regard to shopping-center space per capita. For the reminder of the year and 2009 we expect stable retail rents and a slight upturn in yields," he added.