Tuesday, 15 September 2026
Vilnius still has plenty of empty offices, but the city’s vacancy figures are becoming less useful as a measure of what occupiers can actually find. The Lithuanian capital entered 2026 carrying the legacy of an unusually strong development cycle. Office construction had expanded the city’s modern stock considerably, vacancy was elevated and developers were competing hard for tenants. Six months later, the situation is beginning to change.
Office availability declined during the second quarter while leasing accelerated. Newsec estimates that vacancy fell from approximately 9.7% at the end of the first quarter to 8.4% at the end of Q2. Colliers, using a different methodology, places the figure at around 8.2%. At the same time, approximately 81,900 sqm was leased during the first half of 2026, around 63% more than during the corresponding period last year.
The development pipeline has moved in the opposite direction. Only around 65,300 sqm was under construction during Q2, approximately half the amount being developed a year earlier. Together, those figures suggest that the imbalance created during the previous construction cycle is gradually being absorbed, but they do not mean Vilnius is suddenly running out of offices.
More than 8% vacancy still represents a considerable amount of available space. The Bank of Lithuania also continues to regard offices as one of the more exposed areas of the country’s commercial property market after years of rapid development. The more interesting question is where that vacancy is located and whether it can genuinely satisfy current occupier requirements.
Vilnius is increasingly becoming a building-by-building market. Location, floorplate efficiency, operating costs, flexibility, environmental performance and employee facilities can now matter as much as the traditional classification attached to a property. This creates a market in which two office buildings located relatively close to each other can experience very different leasing conditions.
It is tempting to describe this simply as tenants abandoning older offices for new Grade A properties, but the evidence is more complicated. Some recently completed premium buildings are still working through substantial amounts of available space, while established properties in slightly lower classifications can maintain strong occupancy. Colliers’ Q2 figures illustrate this difference, with vacancy among speculative Class A offices remaining around 10–10.5%, while the figure for B1 properties was approximately 4.5–5%.
The numbers suggest that a Grade A label alone is no guarantee that tenants will arrive. Timing, location, rent, building design and the amount of competing space nearby remain important. Vilnius’s central business district provides another example. Despite the improving citywide picture, Colliers estimates CBD vacancy at approximately 14%. This demonstrates how an overall vacancy rate of just above 8% can conceal much higher availability within individual parts of the city.
Hybrid working has added another layer. Many companies no longer calculate their office requirements simply by multiplying employee numbers by a fixed amount of space. Flexible working arrangements allow some businesses to occupy smaller premises while simultaneously placing greater importance on the quality of the workplace employees are expected to visit. A company may therefore reduce the amount of space it leases while upgrading the quality of the building it occupies.
For landlords, this changes the competitive environment. Owners can no longer assume that falling citywide vacancy will automatically improve the performance of every office building. Properties that fail to satisfy changing tenant requirements may continue carrying empty floors even as better-positioned competitors fill. Landlords have responded with more flexible lease structures, rent-free periods, fit-out contributions and other incentives rather than relying entirely on reductions in advertised rents.
For investors, the divergence creates another problem. The investment risk attached to an office building increasingly depends on more than its location and existing rent roll. A well-occupied property with efficient energy use, adaptable floors and tenants willing to renew leases represents a very different proposition from a building requiring substantial refurbishment to remain competitive. As a result, the difference in value between successful and struggling offices could become increasingly important even within the same submarket.
The Bank of Lithuania’s caution towards the sector therefore remains relevant. Vilnius office stock has expanded enormously over the past decade, while working patterns and occupier requirements have changed. Prime office values also remain below their previous peak following the repricing caused by higher financing costs.
At the same time, another risk is beginning to emerge alongside the existing oversupply. Developers responded to elevated vacancy by reducing construction. That was a rational reaction to the market conditions of the past several years, but office development has a long lead time. If fewer projects start today, fewer buildings will reach the market several years from now.
Should leasing remain strong while construction stays subdued, Vilnius could eventually encounter shortages within particular categories of office space even while substantial vacancy remains elsewhere. This would not mean the city had run out of offices. It could instead mean that a company searching for several thousand square metres in a particular location and requiring modern technical standards, efficient operating costs and suitable employee facilities finds relatively few realistic alternatives.
That distinction will become increasingly important as the development pipeline for 2027, 2028 and 2029 takes shape. Developers controlling suitable sites may eventually find themselves in a stronger position if available modern space continues to decline. But restarting the development cycle will require confidence that today’s leasing improvement is sustainable rather than simply the absorption of buildings completed during the previous cycle.
For owners of less competitive offices, waiting for the wider market to improve may not be enough. Some properties will require investment to improve energy performance, interiors and amenities. Others may need more extensive repositioning, while buildings that can no longer compete economically as offices could eventually face pressure for alternative uses where planning and construction conditions permit.
Vilnius therefore remains an office market with excess space, but increasingly the important issue is not how many square metres are empty, but which square metres are empty. The city is moving away from a period in which oversupply affected almost every landlord in broadly similar ways. The next stage is likely to produce a clearer separation between buildings capable of attracting modern occupiers and those that struggle despite an improving market around them.
If leasing continues to strengthen while developers remain cautious, that separation could become even more pronounced. Vilnius may still have an office vacancy problem. Increasingly, however, it is becoming a problem of having vacant space in the wrong buildings rather than simply having too many offices.
Source: CIJ.World Research & Analysis Team
