OREANDA-NEWS. June 23, 2010. Statistics of transactions with business objects. In May 2010 were concluded 24 transactions with commercial objects and 11 transactions with vacant land in Harju County. All of the transactions with vacant land were concluded with properties located outside of Tallinn, while ten transactions with commercial properties were concluded with objects located in Tallinn. Compared to the first five months of 2009, the number of transactions with commercial objects has grown by 24% and the umber of transactions with vacant land decreased by 32%, reported the press-centre of Colliers International.        

Investment Market
The last month has been quite considerable in the matter of deals with commercial objects. The state properties auction held in May was very successful and all three properties were sold above the initial price. In addition, at the end of May was concluded a transaction with a local supermarket in Parnu currently being rented by A-Selver retail store. Yields for mentioned transactions were between 10-11%, except for one object where a potential upside resulted in one digit yield.

Investment market is more active in retail and industrial sector, where several negotiations are continuously in process. However, the circle of good investment objects for sale with sustainable cash flow and reasonable yield is shrinking. Local investors have more or less put their money on place, thus most of the future deals will be concluded by foreign investors or funds.

Office market
There have not been considerable changes in the office market during 2010. Nevertheless, according to Estonian Commercial Register, the number of new enterprises has grown during first four months of 2010 by 25% compared to the same period of previous year. As many smaller start-up companies do not want to tie themselves with long-term lease agreements, a good alternative for a traditional office space is to rent an office hotel, which has become more popular among enterprisers during the crisis.

Retail Market
On 3rd of June was opened long-awaited Rimi supermarket alongside Tallinn in Tabasalu with total area of ca 2,200 sqm.

In addition to Rimi, Maxima will open a small grocery store with the area of ca 800 sqm in Pohja-Tallinn city district in the middle of June.

Even though from several grocery chains’ and shopping centres’ expansions (in addition to previous Prisma will open its first two hypermarkets outside of Tallinn in 2010 and enlargement of Kristiine Shopping centre will be opened in autumn 2010) could be presumed as the worst times in retail sector are over, the sales numbers are still approximately 10% lower than a year ago.

Unfortunately even the beginning of tourist season has not truly liven up the street retail sector, thus could be predicted that the average rental rates in this segment will continue to fall.

Warehouse and Industrial market

Although the average vacancy rate in industrial sector is quite high, the existent supply does not meet the demand in the matter of larger premises (5,000 sqm and more). While the developers are ready to build up premises suitable for a specific client, the gap in rental rate asked by the developer (around 5 EUR per sqm) and offered by the tenant (around 3-4 EUR per sqm) is still relatively high, thus the search for suitable location and/or premise, as well as the negotiations with the developer regarding the rental rate take several months. However, quite a few negotiations are in process and hopefully will be concluded in the nearest future.