OREANDA-NEWS. July 11, 2012.
Office Market
In the beginning of June investment company Capital Mill and construction company YIT signed a contract for the construction of Navigator office building near Tallinn harbour area with the total size of ca 9,000 sqm. Planned completion time of the construction works is the end of 2013.
By now it is certain that approximately 60,000 smq of new office premises, half of which or ca 30,000 are speculative, will accrue to Tallinn office market during 2012-2013. Rent price remains constantly to be a key factor for suburb areas, which makes feasibility of most of the suburb developments still questionable, reported the press-centre of Colliers International.
 
Retail
Retail sector is constantly very active and the announcements about different shopping centre enlargements, constructions and opening of new supermarkets are becoming more common.
Just recently CA Fastigheter AB announced that that it has signed lease contracts with H&M and Rimi for the premises in the former Post House in the heart of Tallinn. The Post House will be turned into a Galleria with a total retail area of at least 7,000 sqm. The property will go through full refurbishment before opening in autumn 2013. In addition H&M will open two more stores on the premises owned by Citycon. Also, at the end of May E.L.L. Kinnisvara AS made an official announcement about the development of Panorama City – a 77,000 sqm shopping centre in Lasnamae city district, which will open in spring 2014. On the 13th of June Maxima opened its largest XX supermarket in Harju County in the town of Maardu with the sales area of 2,400 sqm. A stable growth of peoples’ savings and increase of consumer confidence allows this trend to continue, at least for some time.
 
Warehouse and Industrial
Industrial and warehouse areas in most demand are continuously areas next to main roads with good logistics and infrastructure – warehouse and industrial parks by Tartu and Parnu roads, area around Vana-Narva and Betooni roads and also port of Muuga. However, the aforementioned areas cannot be lined up by their attractiveness, because all the districts have different tenant target groups depending on a particular tenant’s business specifics. For forecasting the future movements of the industrial market one shall monitor the logistics and movement of companies which continue to stimulate and make notable contribution to Estonian economy.
 
Hotel market
The larger hotels of Tallinn hope to post sales records in summer 2012, while some hotels have increased their prices by around 10% in a year.

According to Statistics Estonia, number of tourists staying in the accommodation establishments of Estonia and Tallinn in the first four months of 2012 increased by 8% and 6.6% respectively compared with the same period of the previous year.
 
Investment market
On May 24th 2012 East Capital completed the acquisition of a 40,000 sqm warehouse park in Tanassilma Logistics Park near Tallinn – a transaction intermediated exclusively by Colliers. The investment volume of the transaction was EUR 24 million, which is the largest deal in the Baltics so far this year.

Currently investors’ interest is focused primarily on retail sector in Tallinn as well as in other parts of Estonia. Keywords are continually good location, strong tenant(s) and sustainable cash flow.

Regarding retail chains’ activity on the investment market, two contrary movements can be observed – some retailers are buying leased properties in strategic locations (e.g. Selver grocery stores owned by Kaubamaja Group) and others are selling properties in order to release capital for expanding (e.g. Saastumarket owned by ICA Group). However, the aim for all grocery retailers is the same – to maintain and protect their market share.