Vilnius's first skyscraper demolition is not rushed: plans are changing

The planned demolition of Vilnius's first skyscraper, affectionately known as the "Dangoraižis," has been halted as developers reconsider their strategy for the iconic building. Initially, the developer "Hanner" had declared the modern glass structure outdated and unsuitable for its surroundings, leading to its closure and the eviction of tenants.

“

There is a more emotional connection. It's the first modern glass skyscraper.

However, "Hanner" has since changed its mind, with board chairman Arvydas Avulis stating, "I think it definitely won't be demolished this year." Vilnius Mayor Valdas Benkunskas confirmed that a demolition permit has not been issued and that no application has been filed. The future of the skyscraper remains unclear, with renovation being considered.

Avulis noted that the current market conditions do not favor new office construction due to a lack of demand. This sentiment is echoed by Giedrius Brūzgė, director of property management at "Eika Development," who observed that while the area of leased space is increasing, new projects are not materializing. He attributes this to Lithuania's rising labor costs, making it no longer a country of cheap labor, which has historically driven growth.

“

I think it definitely won't be demolished this year.

The changing economic landscape is also affecting foreign investment, with fewer international companies entering the market and creating new jobs. Geopolitical situations have deterred large service centers and major international firms from entering Lithuania, according to Gintarė Žemaitė, head of commercial real estate development at "Realco."

“

It is obvious that building offices is not worth it and not needed at the moment, because there is no such demand in the market.

Market participants are divided on the future of office spaces. Some, like Žemaitė, see a resurgence, with businesses returning and increasing demand for new office leases and building migrations. Others, like Avulis, are adapting by shifting focus from commercial to residential projects, stating, "We will build residential houses because Vilnius residents need them." The first Vilnius skyscraper is currently incurring losses due to maintenance and taxes.

“

We will build residential houses because Vilnius residents need them.