Commercial premises in Vilnius Old Town – empty and plenty like never before

More empty commercial premises in Vilnius’ Old Town — such a choice of spaces have not been seen for a long time. What is happening?

The development of Vilnius Old Town, the resurrection of some of its territories for a new life and the return of the rhythm of urban life to them have been around for some time. The city government’s visions have included the regenerated Station District (Connect Vilnius), dedication of some Old Town streets to pedestrians by closing traffic and the development of leisure and service infrastructure. However, real estate experts point out that the flow of population in the central part of the capital still remains too low. Hence, and at high rental rates, the number of vacant commercial premises in the Old Town has been increasing recently.

Amount of free space — like never before

According to Domas Jagminas, a partner of the real estate consulting company Solid Real Advisors, the share of space available for free traders and catering service providers in the centre of Vilnius has increased by approximately 6–7%. In the centre of the capital, in April, there were close to 100 different premises for trade and services.

‘Most of the free commercial premises in the centre of Vilnius are currently located at Vokiečių Street and in the section of Gedimino Avenue from Seimas to Lukiškės Square. The growing number of vacant premises is mainly due to the turnover of residents and visitors which is too low to ensure the profitable activities of traders and catering suppliers and high rental rates, which have been increasing over the last ten years. For larger traders in the Old Town, it is difficult to compete with shopping centres in other parts of the city. This is where Lithuanians are more likely to go shopping. Those brands that could settle in the central city streets are not in demand in Lithuania. All this means that we have such a picture of empty showcases in the centre of Vilnius,’ noted D. Jagminas.

According to experts, in order for the more area-occupied merchants to be able to stay in the centre, higher flows of people are required. However, Vilnius is lacking such flows due to its low population, relatively low concentration of offices and underdeveloped transport infrastructure.

Catering companies co-operate

D. Jagminas states that a similar situation exists for catering service premises. Although a new restaurant or café in the centre of Vilnius opens every week, the average life expectancy of a catering establishment is less than one year.

‘Food culture, of course, is growing, and the traditions of eating in the city are gradually gaining ground, but the overall number of visitors to restaurants and cafes has not been impacted yet. In the field of catering, this is a source of enormous competition and short restaurant life. However, various food markets in the centre have recently become popular and are quite successful, bringing together many different catering service providers under one roof. Such a concentration attracts more visitors, which benefits all service providers operating in these locations,’ stated a representative from Solid Real Advisors.

However, the decreasing demand of business for premises in the central part of the city means better opportunities for choosing the most suitable premises. According to D. Jagminas, catering service providers and merchants looking for places to settle in the Old Town today can choose from a number of different premises suited to their needs. A few years ago, it used to be significantly more difficult to open new stores and cafes in the centre due to a lack of space.

Not all spaces are suitable

Laima Vėželienė, director of Ex Prompto, a company managing the café chain Vero Cafe, also notes that while developing the chain in the city centre, it has been difficult to find places with sufficient client flow.

‘The biggest problem in the old towns of Vilnius and Kaunas is that all the best places are already busy. There are places that we look forward to opening for the second year already. In addition, the premises offered in the central parts of cities often do not have modern communications, and the condition of the buildings is certainly not the best, with the owners not supervising them. And a well-ordered facade and inner part always facilitates operation and influences larger customer flows. As a result, in many cases, it is much easier to settle in newly equipped modern premises such as supermarkets,’ says Vėželienė.

Nevertheless, the chain plans to open four new cafes in the central parts of Vilnius and Kaunas during this year. Currently, there are five of them in the centre of Vilnius and the Old Town, and seven in the central parts of Kaunas.

A lively centre needs more residents

Martynas Marozas, an urbanist, states that only by accommodating a central part of the city could merchants and catering service providers be assisted to attract missing population flows to the Old Town of Vilnius. Moreover, according to him, it is important that not only the most affluent society members, but also representatives of different social groups, live in the centre. This is the only way to keep the central parts of cities viable.

‘People need to live in the Old Town if we want to make it lively. And not only residents who can afford expensive housing, but also students, pensioners, various professions, artists and people from vulnerable social groups. Residents of rural and sleeping areas will certainly not provide customer flows to cafés or restaurants, even if they come to the city centre every weekend for a walk. It can only be done by people who live and work locally,’ says M. Marozas.

A new approach is required

According to an urbanist, empty and unused space in city centres is one of the consequences of rising real estate prices in many European capitals. M. Marozas gives an example of London. A number of real estate agents located in the central parts of this city are owned by wealthy foreign investors who keep their premises unused or spend only a few days a year there. Prague also faces similar problems, where much of the Old Town heritage has turned into the simplest of warehouses.

‘In order for Vilnius Old Town to avoid such a fate, not to become an elite, affordable only to the well-off, or a monofunctional area, there is a need for different planning and a new approach that will allow different people to live in the centre and different uses of institutions to be created, alternatives and cultural initiatives to exist. However, today’s trends show that the centre of Vilnius is becoming an exclusive high-class district with services oriented to it. These trends seem to be even more pronounced,’ says M. Marozas.

Kaunas market is more active

According to D. Jagminas, in contrast to the capital, in the central parts of Kaunas, there has been no increase in the number of vacant commercial premises, and the market for this city has perspectives for at least the next five years.

‘Kaunas is experiencing some kind of rise, so the demand for commercial premises in the Old Town remains stable. The biggest concentration of merchants and catering service providers in the centre of Kaunas is currently located on Vilniaus Street, but the reconstruction of Laisvės Alley, which is nearing its end, allows for considerable activity in this location. It is waiting for the reconstruction of the Metropolis Hotel and the former Mercury Shopping Centre. The former SEB Bank building, which will host a food hall with different operators, and the largest cooperation area in the city, is also being renewed. Already, some sections of the Laisvės Alley are particularly lively, and the reconstructed street and new projects being implemented will attract even more working people, residents and city dwellers to this place,’ says D. Jagminas.

Akropolis factor in Kaunas

According to a real estate market expert, the concentration of traders and catering service providers is also increasing significantly next to Kaunas Akropolis. This increase is primarily due to the establishment of business centres nearby. According to D. Jagminas, this year and in the next few years, the Kaunas Old Town commercial premises market is expected to be impressive, and the service infrastructure in the centre of the temporary capital should continue to expand.

M. Marozas sees more positive signs in Kaunas than in Vilnius. However, he notes that Kaunas is still in its early stages of development; thus, after a few years, the situation in this city may become similar to that observed in Vilnius.

‘In my opinion, more planning work has been done in Kaunas, which is why the rapid recovery of Kaunas Old Town and Naujamiestis is being observed. However, only time will tell if the growth of real estate prices will keep that life in the centre of Kaunas,’ says M. Marozas.