BALTIC STATES | PROPERTY SNAPSHOT
In Q2 2018, total known investment volume in Estonia amounted to ca EUR 65 million, driven by the sale of the 14-storey Class A office building (Luminor HQ) in Tallinn CBD and the acquisition of Kärberi Centre (anchor tenants – Selver and MyFitness) by Lumi Capital. Overall, the investment market remained reasonably active in 1HY 2018 with total volume reaching EUR 164 million. he office segment remained investors’ most favoured choice, attracting almost two-thirds of total volume in 1HY 2018. Prime yields remained stable, influenced mainly by tightening competition and harder financing conditions, resulting in some possible pressure on yield increase in the future.
Development in the Tallinn office market remains active with a total area of approx. 94,500 sqm (14 projects) under construction in June 2018. Q2 2018 saw completion of the new milestone in CBD – the Maakri 19/21 Office Building, a large-scale high-rise project with approx 18,300 sqm of Class A office space as well as the commissioning of Finest and Zenith Business Centres in CBD, the Järvevana 7b office building in City Centre, the Pirni7 project in Kristiine city district, the start of construction work on the new Taxify HQ in City Centre and the Metalli 5 Office Building in Kristiine city district.
In Q2 2018, the Tallinn retail development market remained reasonably active, with the opening of the extended Mustakivi Prisma Hypermarket in Lasnamäe city district by approx. 3,500 sqm of leasable space. New tenants in Mustakivi Prisma include PetCity, Lemon Gym fitness club, CityAlko and Almudu restaurant. June 2018 saw the entry to the Tallinn retail market of PEPCO – the new-to-Estonia retail chain offering clothing and household products at very low prices – with the opening of two stores in Magistral and Nautica shopping centres. Additionally, in June 2018, Apollo Group opened O’Learys sport and leisure restaurant, covering 4,000 sqm, while Reserved opened the biggest store in the Baltics in Kristiine Centre.
The industrial segment remains active in Tallinn and its suburbs in terms of new developments with a total area of approx. 104,000 sqm under construction in June 2018. Mixed-use projects, combining business and warehouse space, continue to gain momentum in Tallinn with several new projects completed (e.g. Peterburi tee 47, K1 Stock Office), started (Härgmäe 21, Priisle Business Park, III stage) or in the pipeline (Stock Office projects at Artelli 19, Kadaka 133, Peterburi tee 101b, Tähesaju tee 5/7). Rent rates in the warehouse and industrial segment continue to remain table,
although continually feeling some downward pressure, while vacancy continues to tighten slightly.
Source: Colliers International