● THE ESTONIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • AUTUMN 2021
THE ESTONIAN PROPERTY MARKET
ESTONIA’S REAL ESTATE INVESTMENT MARKET CONTINUES TO POST STRONG RESULTS
Estonia took the lead in the Baltics with a record 8.5% GDP growth in the first half year and a 12.9% increase in Q2 2021 alone. The biggest contributors to economic growth were the rapidly recovering manufacturing, transportation, and warehousing sectors. The economy also received a boost from the information and communication segment. Increases in private consumption were reflected in retail turnover growth, especially from mid-spring onwards, and recovery in both the accommodation and catering sectors has also commenced. According to the latest assessments, the Estonian economy is estimated to grow by 8.0% this year and maintain this pace into 2022 as well.
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Estonia’s real estate investment market continues to post strong results, with 2020 proving a successful year. In fact, the country contributed one third to the Baltic investment market. The first half of 2021 was more active in terms of the number of deals and nearly 1/4th of the total transaction volume – more than 100 million EUR – was closed in the capital city and regions. The largest segment, accounting for almost half of the volume of Estonian sales, was industrial/logistics. This remains the hottest sector across the entire region. Smaller local investors are mainly on the lookout for smaller scale retail, hotel properties and office projects. The investment market in Estonia remains tight as
larger investment grade properties are rare and local capital investors compete for smaller scale opportunities. In fact, there have been no large scale investment deals that exceeded EUR 25 million size per transaction so far in 2021. With the construction market experiencing an 18% increase only in 2021, it will be the active traditional segments of office, industrial and logistics which will be responsible for creating new investment grade properties to attract both local and international investors.
Contact: Kristina Živatkauskaitė k.zivatkauskaite@newsec.lt
