OREANDA-NEWS. May 15, 2012. Estonia's economic growth continued to recover above expectations in 2011, driven by exports to key trade partners, most notably Finland and Sweden, thus stimulating demand growth in the Estonian commercial real estate market, reported the press-centre of Colliers.  

In 2011, office sector experienced the high take-up rate for quality class A and B office premises and an unexpected increase in the level of development activity - driven largely by the public sector.

Rents in most sectors finally strengthened and showed an increase in an upward trend. Vacancy rates continued to decrease throughout the year and remain effectively nil in some segments such as CBD office and retail in modern shopping centres.

The Investment market, one of the major indicators of a real estate market health, continued its speedy recovery in 2011, the total investment volume achieved ca EUR 250 million in 2011, which is approximately three times as much as in 2010. 2011 saw the largest single investment deal ever on the Estonian market – Finnish listed retail investor Citycon acquired Kristiine shopping centre in Tallinn for EUR 105 million.

Although crisis times are presumably over and there is a sense of optimism in the market, this does not signal a return to boom-times by any means. Several on-going defects in the economy will continue to impact the growth of real estate markets such as high structural unemployment, high construction prices, and inflation and supply side defects.

We, at Colliers International believe that the following market summaries, prepared by our market experts in Tallinn will provide you with useful information and insights to assist you in your business decision making in Estonia in 2012.