● THE ESTONIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • SPRING 2020
THE ESTONIAN PROPERTY MARKET SOLID ECONOMIC GROWTH WILL SUPPORT INVESTMENT The Estonian economy continues to grow and the country remains one of the most rapidly developing in the European Union. In 2019, Estonia’s GDP grew the most among the Baltic countries, at around 4.1 per cent. Con-
sumption is forecast to grow further, influenced by rising employment and wage growth of nearly 8 per cent. The information and communication technologies sector has long been the biggest driver of the country’s
economic growth. Newsec believes Tallinn will manage to maintain its strong position, though its neighbouring country competitors Latvia and Lithuania are inching closer owing to widespread technology innovations. The real estate investment market in Estonia underwent a slowdown in 2019, with the total amount invested failing to reach EUR 100 million, though demand for attractive assets persisted on the market. Prime office yields compressed to 6.0 per cent, retail and industrial yields to 6.5 per cent and 7.5 per cent respectively. The office segment in Tallinn is still the largest and most balanced among the Baltic capitals. As supply in the market is growing more slowly and the level of vacancies remains stable, both developers and tenants are preparing for a new intense round of expansion. Once the A class office buildings that are underway are completed, local developers will give more attention to the development of B class office projects, expanding the office complexes and multifunctional properties that are already successfully operating and in demand in the centre of the city.
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Contact: Kristina Živatkauskaitė k.zivatkauskaite@newsec.lt
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