Analytics, Baltic, Investments, Real Estate

"For this reason, a major world-known Japanese electronics company opted not invest in Latvia last year," said de Putane, adding that the investor, which had been in talks with the Investment and Development Agency for nine months, said it was not sure whether it could find adequate offices in Riga.

There have to be offices that large investors could move in right away, and they would never sign agreements on renting offices that have not yet been built, said de Putane. "This is a catch-22 situation – banks are not issuing loans to developers for construction of office buildings unless they have agreements signed on rent of at least 50% of the given office space," she explained.

Furthermore, while there is office space available in Riga, port cities and a few other major cities, the situation is substantially worse elsewhere, for instance, in Daugavpils, Cesis, Valmiera. "And office buildings under construction in Riga, which are located further away from the downtown, are of no interest to investors. For example, we have shown investors an office building being built on Ganibu dambis Street, and they said the area was terribly degraded and too far away from the center of the city. Investors do not want such offices," said de Putane.

Another advantage that Vilnius has over Riga and Tallinn is that several global companies already have offices there, such as Western Union and Barclays. "The large, popular brands attract other companies," added de Putane.