Klaipėda FEZ to expand FlexStart project with fourth building

Klaipėda Free economic zone (FEZ) management company is designing a 9000 sqm FlexStart manufacturing facility which can be quickly adapted to tenants’ needs as the construction of the third building is nearing completion by the end of 2025. Klaipėda FEZ aims to start construction on this latest addition to the FlexStart family this year, with an estimated investment of approximately €8.5 million.

Construction of the third 8000 sqm FlexStart building began in the second half of last year, and more than 60% of the work has already been completed. The facility, suitable for production, storage, administrative and commercial functions, is expected to be finished in the third quarter of this year. The FEZ management company has invested €8.5 million in this project, including a €5.12 million ILTE loan.

Darius Urbonas, Real Estate Development Manager at Klaipėda FEZ, explains that the steady growth of economic activity in Lithuania and Europe, along with successful negotiations regarding both existing and new FlexStart spaces, led to the decision to expand the portfolio of flexible industrial buildings.

“The interest from local and foreign investors proves that modern, functional and flexible industrial-administrative spaces, where new operations can be launched or existing ones expanded quickly, are a successful strategy for both us and the state institutions supporting our efforts. We hope to announce new investors soon, attracted to Lithuania primarily by the opportunities offered by the FlexStart projects. Although FlexStart 03 is still under construction, we are already in the active design phase for the fourth building. We plan to start construction by the end of this year and complete it within a year,” said Urbonas.

He noted that most of the space in the still-under-construction FlexStart 03 building has already been leased to foreign investors, but a few vacancies have recently become available in the FlexStart 01 and FlexStart 02 facilities. Preliminary negotiations with investors for leasing space in FlexStart 04 are also underway. The FEZ management company is seeking additional ILTE financing for this project. ILTE has previously supported FlexStart projects due to their contribution to making Lithuania more attractive to investors and strengthening the country’s image as a rapidly integrating business hub.

The planned FlexStart 04 will be the largest in the FlexStart family. The project includes four segments adaptable for production, storage, administrative or commercial purposes. Located at Pramonės St 33, the building will feature enhanced logistics access, additional sustainability technologies, and modern well-being solutions. As with other Klaipėda FEZ buildings and land plots, all FlexStart tenants benefit from key advantages, including favorable tax conditions, a strong business community, modern infrastructure, access to major transportation corridors, a network of local, regional and national partners, as well as professional site management and maintenance.

The first two FlexStart buildings have become home to investors such as Werner Wirth Baltic, Etman, Glob-El, Pod Furniture, Albright and Retal Baltic Films. For the latter, the FlexStart facility has helped optimize real estate and production processes. At the end of last year, Lithuanian ballistic protection manufacturer KOVO Armor also moved into FlexStart 02, becoming the first defense sector investor in Lithuania’s free zones. In 2017, the first FlexStart building received a global, first-of-its-kind award from Financial Times’ FDI Intelligence for its quick launch possibilities.

Currently, companies operating in Klaipėda FEZ with official investor’s status employ about 2800 people, with around 5000 colleagues across the entire territory. In 2023, the total revenue of the 46 companies holding FEZ investor status reached €1.34 billion. Over the past decade, Klaipėda FEZ investors have contributed €78 million in personal income tax, with most of these funds benefiting the city’s budget. Additionally, they have paid €558 million in VAT and social security contributions into the national and social welfare budgets.