OREANDA-NEWS. March 28, 2012.
Office Market
2012 has continued the trend of positive office space absorption. The highest contribution to take-up volume in 2011 came from public sector, while 2011 showed an unexpected increase in development activity drawn largely also by public sector. The sector’s share of total take-up is expected to remain high in 2012-2013. However, when in 2011 approximately 40-50% of the total take-up volume formed office premises located in the City Center, then CBD’s share of total take-up in 2012 will decline over the course of the year due to decreased vacancy rate in the CBD area, reported the press-centre of Colliers.

More detailed information concerning take-up volume, absorption of office space, rent rates and vacancy dynamics, tenants’ structure and emerging trends in Tallinn office market could be found in new research report released by Colliers International Estonia.

Retail
Although the retail sales growth was remarkable in January (15% y-o-y), one must bear in mind that the notable increase is rather statistical and caused by low y-o-y reference base. For example the retail sales volume index in January 2012 was on the same level as in March-April 2011, which is still comparable to the pre-boom time level (1H 2006). Consequently, the retailers’ ability to pay rent is recovering, but is not yet on the boom time level. However, positive growth numbers are certainly one reason for continuing widespread grocery chains’ expansions.

Warehouse and Industrial
In the middle of February a parcel delivery company DPD Eesti AS opened a new logistics centre in Rae Industrial Park. The net area of DPD’s new modern terminal is 2,038.8 sqm, with an additional 822.2 sqm of office space. The total investment in the property was approximately EUR 2 million.

In general, demand for modern warehouse and industrial premises in Tallinn and Harjumaa is continually exceeding supply.

Additionally, some development of new industrial and warehouse facilities could be expected outside of Harju County. For instance in March 2012 the council of Ida-Virumaa Industrial Areas Development will discuss potential land sale to four foreign investors, who are planning to invest EUR 26 million in buildings and equipment/machinery, thus creating about 480 new jobs by the year 2017.

Investment market
Private investors searching for EUR 1-2 million investment opportunities have become more active. In demand are also strong cash flow properties located outside of Tallinn. The main consideration for investors is continually sustainable cash flow.