Baltic Real Estate Market Overview: Q1 2026

At the start of the year, Baltic real estate activity has been supported by local private investors, sustaining transaction momentum despite a more cautious market sentiment. Signals from the European Central Bank on potential interest rate increases continue to affect financing conditions, leading some market participants to adopt a wait-and-see approach.

Nevertheless, the outlook remains moderately positive, particularly in Lithuania, where investment activity is expected to strengthen compared to 2025, supported by several larger transactions in the pipeline. At the same time, geopolitical risks and potential increases in fuel prices are adding uncertainty, impacting construction costs and development timelines.

Across sectors, structural shifts are becoming more evident. In the office market, conversions of outdated buildings into residential use are gaining momentum, while demand continues to favour modern, high-quality space. The small office segment is expanding, alongside increasing competition in coworking.

Retail activity remains focused on redevelopment and new formats, particularly retail parks and community centres, while consolidation is reshaping parts of the Estonian market. Meanwhile, the industrial and logistics sector remains stable, although vacancy in older stock may rise as occupiers relocate to more modern facilities.

Overall, despite short-term uncertainty, the Baltic real estate market continues to adapt, with clear trends shaping its future development.

Explore all the latest market trends in our full Q1 2026 report.