http://www.iht.com/articles/2005/03/...ess/revil.html
A renaissance in Vilnius
By Justin Keay International Herald Tribune
Friday, March 4, 2005
VILNIUS, Lithuania. Ever since the mid-1990s, when low property prices, a cheap cost of living and a beautifully unspoiled Old Town made Prague fashionable, second-home buyers have been keen to find the "new Prague."
Candidates have included Krakow, Poland; Ljubljana, Slovenia; Tallinn, Estonia; and Riga, Latvia - all of which have well-priced apartments in historic neighborhoods with good capital appreciation prospects, especially with the European Union growing last year to include all of these countries.
But they all have drawbacks. The Poles and Slovenes are not very welcoming to foreign buyers. Ljubljana and Tallinn are rather small; Riga has few modernized apartments. And while Tallinn has its charms, it also has long, cold winters and is sometimes swarming with hard-drinking Finns and Britons, who consider it a favorite stag-weekend destination.
Then there is Vilnius, Lithuania's beautiful Baroque city and the least known of the three Baltic capitals. Its 543,000 inhabitants live in only 20 percent of the city's 392 square kilometers, or 150 square miles, leaving open space that has been turned into parks or left forested.
The city center, which includes the largest Old Town in the Baltics as well as views of Gediminas Castle, has been undergoing a face-lift in preparation for 2009, when Lithuania will celebrate 1,000 years as a nation.
In Cathedral Square, just below the castle, workers are rebuilding the Royal Palace, razed by the Russians in 1802.
A whole new section of the city is being created on the right bank of the Neris River, where dreary commuter suburbs stood during Soviet times. About €200 million, or $262 million, has already been spent in the €800 million first phase of the project; last year the Europa Center, the tallest tower in the Baltics at 150 meters, or nearly 500 feet, was opened and its largest shopping center, the Akropolis, was expanded to 70,000 square meters, or about 750,000 square feet.
"The aim is to establish the most modern, dynamic commercial, residential and retail area in the Baltics by 2010," said Hans Urban Nielsen, general manager at Koba, the Danish real estate company behind much of the development.
For foreign buyers, though, the focus is on the city's Old Town. Much of the housing stock is being reconstructed, with spacious new apartments rising behind carefully maintained neo-Classical or Baroque facades.
The Jewish neighborhood, destroyed by the Nazis, is also to be rebuilt, but not in haste.
"Careful decisions are being made about where things should be left as they were and where they should be rebuilt," said Vygintas Jakas, economic director at the Vilnius Municipal Department.
In Vilnius, the sale price of an apartment starts at €2,000 per square meter, or about $245 per square foot, rising to €2,600 in a new development in a prime area, said Vytas Zabilius, head of the Ober-Haus real estate agency. A typical two-bedroom apartment of around 90 square meters usually sells for about €234,000. (Property in Lithuania is priced in euros.)
But prices have been rising. Lithuania's economy is flourishing - its gross domestic product grew 6.3 percent in 2004 and 8.9 percent in 2003 - and analysts say that they expect the trend to continue.
For one thing, it has become easier for Lithuanians to buy property in recent years. Five years ago mortgage rates were around 14 percent, and almost 60 percent of all property purchases were made in cash, Zabilius said. Now, interest rates are 3.8 percent and a buyer can routinely get a loan for as much as 90 percent of a property's value.
Also, Lithuania's accession to the European Union last May has clearly raised interest among foreign buyers. Zabilius said the British and Irish have made the most purchases, although Germans and Italians have also been active. For example, Sunshine Estates, an Ireland-based online estate agency specializing in emerging markets, reported that its sales in Vilnius increased more than 50 percent in 2004 from 2003.
"Late last year I had a group of young Irish guys here and they bought five Old Town apartments - just like that," Zabilius said.
Improved air access is also raising foreign interest in the city. Lithuanian Airlines already flies twice a day from key European cities, and this month British Airways is to add regular direct flights from London.
The city's real estate is expected to appreciate in value, Nielsen said, particularly because EU membership "removed risk from the equation." What's more, the Lithuanian currency, the litas, is linked to the euro and the country is expected to be among the first of the new EU members to join the euro zone.
Wealthy Lithuanians generally prefer spacious suburban villas, but Old Town apartments can offer historic charm and modern conveniences at a range of prices.
For example, the building at Subaciaus Street 15, in the heart of the Old Town, is not completed but its apartments have already sold out for as much as €2,000 per square meter.
On Gedimino Avenue, the city's most popular shopping street, the Grand Duke Palace is being converted into 51 apartments, with prices as high as €2,400 a square meter. It is expected to be completed by the end of the year.
And a large glass tower complex on Gyneju Street, called Vilnius Gates, has the most expensive apartments of all, with prices topping out at €3,700 per square meter.
Maybe the hunt for the "new Prague" is finally over.
By Justin Keay International Herald Tribune
Friday, March 4, 2005
VILNIUS, Lithuania. Ever since the mid-1990s, when low property prices, a cheap cost of living and a beautifully unspoiled Old Town made Prague fashionable, second-home buyers have been keen to find the "new Prague."
Candidates have included Krakow, Poland; Ljubljana, Slovenia; Tallinn, Estonia; and Riga, Latvia - all of which have well-priced apartments in historic neighborhoods with good capital appreciation prospects, especially with the European Union growing last year to include all of these countries.
But they all have drawbacks. The Poles and Slovenes are not very welcoming to foreign buyers. Ljubljana and Tallinn are rather small; Riga has few modernized apartments. And while Tallinn has its charms, it also has long, cold winters and is sometimes swarming with hard-drinking Finns and Britons, who consider it a favorite stag-weekend destination.
Then there is Vilnius, Lithuania's beautiful Baroque city and the least known of the three Baltic capitals. Its 543,000 inhabitants live in only 20 percent of the city's 392 square kilometers, or 150 square miles, leaving open space that has been turned into parks or left forested.
The city center, which includes the largest Old Town in the Baltics as well as views of Gediminas Castle, has been undergoing a face-lift in preparation for 2009, when Lithuania will celebrate 1,000 years as a nation.
In Cathedral Square, just below the castle, workers are rebuilding the Royal Palace, razed by the Russians in 1802.
A whole new section of the city is being created on the right bank of the Neris River, where dreary commuter suburbs stood during Soviet times. About €200 million, or $262 million, has already been spent in the €800 million first phase of the project; last year the Europa Center, the tallest tower in the Baltics at 150 meters, or nearly 500 feet, was opened and its largest shopping center, the Akropolis, was expanded to 70,000 square meters, or about 750,000 square feet.
"The aim is to establish the most modern, dynamic commercial, residential and retail area in the Baltics by 2010," said Hans Urban Nielsen, general manager at Koba, the Danish real estate company behind much of the development.
For foreign buyers, though, the focus is on the city's Old Town. Much of the housing stock is being reconstructed, with spacious new apartments rising behind carefully maintained neo-Classical or Baroque facades.
The Jewish neighborhood, destroyed by the Nazis, is also to be rebuilt, but not in haste.
"Careful decisions are being made about where things should be left as they were and where they should be rebuilt," said Vygintas Jakas, economic director at the Vilnius Municipal Department.
In Vilnius, the sale price of an apartment starts at €2,000 per square meter, or about $245 per square foot, rising to €2,600 in a new development in a prime area, said Vytas Zabilius, head of the Ober-Haus real estate agency. A typical two-bedroom apartment of around 90 square meters usually sells for about €234,000. (Property in Lithuania is priced in euros.)
But prices have been rising. Lithuania's economy is flourishing - its gross domestic product grew 6.3 percent in 2004 and 8.9 percent in 2003 - and analysts say that they expect the trend to continue.
For one thing, it has become easier for Lithuanians to buy property in recent years. Five years ago mortgage rates were around 14 percent, and almost 60 percent of all property purchases were made in cash, Zabilius said. Now, interest rates are 3.8 percent and a buyer can routinely get a loan for as much as 90 percent of a property's value.
Also, Lithuania's accession to the European Union last May has clearly raised interest among foreign buyers. Zabilius said the British and Irish have made the most purchases, although Germans and Italians have also been active. For example, Sunshine Estates, an Ireland-based online estate agency specializing in emerging markets, reported that its sales in Vilnius increased more than 50 percent in 2004 from 2003.
"Late last year I had a group of young Irish guys here and they bought five Old Town apartments - just like that," Zabilius said.
Improved air access is also raising foreign interest in the city. Lithuanian Airlines already flies twice a day from key European cities, and this month British Airways is to add regular direct flights from London.
The city's real estate is expected to appreciate in value, Nielsen said, particularly because EU membership "removed risk from the equation." What's more, the Lithuanian currency, the litas, is linked to the euro and the country is expected to be among the first of the new EU members to join the euro zone.
Wealthy Lithuanians generally prefer spacious suburban villas, but Old Town apartments can offer historic charm and modern conveniences at a range of prices.
For example, the building at Subaciaus Street 15, in the heart of the Old Town, is not completed but its apartments have already sold out for as much as €2,000 per square meter.
On Gedimino Avenue, the city's most popular shopping street, the Grand Duke Palace is being converted into 51 apartments, with prices as high as €2,400 a square meter. It is expected to be completed by the end of the year.
And a large glass tower complex on Gyneju Street, called Vilnius Gates, has the most expensive apartments of all, with prices topping out at €3,700 per square meter.
Maybe the hunt for the "new Prague" is finally over.
Of course I find myself in total agreement. 
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