OREANDA-NEWS. April 05, 2011.
Office market
Vacancy rate of contemporary office buildings is gradually decreasing. Several companies have started to expand their activities and looking for larger premises. When the beginning of 2010 was rather quiet in the context of rental activity, then March and April 2011 promise to be much livelier, reported the press-centre of Colliers International.

The distribution of leasing activity by sector shows that the IT and communication sector followed manufacturing and transportation-warehousing sectors continue to be the largest users of leasing services in the beginning of 2011 in Tallinn (and its suburbs). Compared with 2010, higher contribution to take-up volume in the beginning of 2011 comes from companies in the Finance sector.

Retail market
According to the information received from the market, the sales turnover of retailers in February dropped notably compared to the previous month. The reason for that could be the matter that the parallel use of currencies made people spend more in January and save more in February. In addition, constantly high inflation rate restrains consumers’ purchasing power.
Continual rotation – slight changes in tenant mix (especially among smaller tenants) can be still observed in Tallinn’s shopping centres indicating that complete stability in the retail market is not yet achieved.

Warehouse and Industrial market
A shortage of large high-quality competitive stock within the region could be seen on industrial market. Therefore the companies have expanded their searching radius and are looking also for premises located outside of Harju County or, if needed, even in other Baltic countries. The number of industrial companies planning to expand or move their business to a better location is persistently increasing.

Hotel market
According to Statistics Estonia, In January 88,000 foreign and 55,000 domestic tourists used the services of accommodation establishments or respectively 22% and 7% more, compared to January of the previous year. 79% of foreign tourists stayed in accommodation establishments of Tallinn. The average cost of a guest night in an accommodation establishment was 27 euros and it was 4 euros more expensive compared to January 2010.

In January and February 2011 AS Tallink Grupp transported 579,502 passengers between Estonia and Finland which reflects approx. 27% increase compared to the same period in 2010. The number of passengers travelling between Tallinn and Stockholm in January and February 2011 increased by 62% and 36.8% respectively over a year ago.

Investment market
The investment market is continually active. In addition to investor’s interest to buy, the willingness among owners to sell good quality investment properties has increased. Currently there are at least two office portfolios and one retail portfolio for sale in Estonia. When during crisis international real estate funds found Baltic market to be too risky and directed their attention and investments elsewhere, then Estonian economic improvement and euro-adoption has bought international investment money back to the market.

Source: Colliers International Advisors