Mapping investment opportunities on "Rail Baltica" route
1. TALLIN – RETAIL SPACES
In December 2016, the turnover of retail trade enterprises was 619.4 million euros which is 3% higher than in December 2015. Prime yield for retail premises in Estonia equals 6.7%, with extremely low vacancy rate of 0.9%. In Q3 2016, the Tallinn retail market remained reasonably active. Q3 2016 saw the start of construction work on expansion of several shopping centres in Tallinn harbour area.
2. RIGA – RESIDENTIAL
In the highest annual rise for more than nine years, average apartment prices in Riga rose by 9.75% y-o-y in November 2016 to €1,159 per square metre (sqm), after growth of just 0.28% a year earlier. Demand remains strong. During 2016, the number of real estate transactions increased 10.5%. Rental rates are fluctuating up to € 12 sqm/month, hence yield reaches 6%. Quite big demand for apartments for rents come from students who have moved to Riga for studying.
3. VILNIUS – INDUSTRIAL
Since new supply is carefully planned and new warehouse projects are covered with pre-lease agreements, the vacancy rate remains low, amounting to 2.1% in Q3 2016, thus reflecting continuously strong demand for industrial premises. Industrial sector is a driver of Lithuanian investment activity, for instance, Aukso Toliai acquired a warehouse building at Pirkliu St. 5 (5,754 sqm) in Vilnius from Nuomos verslas.
4. WARSAW – STREET RETAIL
Warsaw’s purchasing power is 68% above the national average. The city’s shopping centre market is becoming increasingly matured and saturated. Compared to shopping centres or other major European cities, high street shops have only marginal relevance. This is mainly due to the limited supply of high-quality, multi-storey high street properties. But the city has large potential to develop its high streets, including Nowy Swiat and Chmielna Streets as well as those of Three Crosses Square.
5. BERLIN – OFFICES
Record demand combined with moderate new-build activity has led to an ongoing drop in vacancy. The current amount of space available for immediate tenancy has dropped to a critical 3%. Around 205,000 sqm of office space is scheduled to be completed by the end of the year, roughly 65% of which has already been preleased. A slightly higher amount of new space is scheduled to become available in 2018 (approx. 245,000 sqm), around 45% of which has already been taken up. Prime rent continued to grow in light of exceptionally high demand for space. Over the course of 2016, prime rent increased by 17% to a current €28.50 per sqm.
European Outlook 2017 Changing Landscape
BALTIC STATES | PROPERTY SNAPSHOT
Office Leasing and Investment. Berlin
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