Baltic, Estonia, Good for Business, Investments, Real Estate

Total investment volume in real estate in the three Baltic countries surged 62% year over year to a new all time high of 1.38 billion euros.

The volume of transactions in Estonia more than doubled to 544 million euros, in Lithuania it grew 49% to 444 million euros and in Latvia it was up 25% at 394 million euros.

In Estonia, investment activity in 2015 was driven by several large single deals and portfolio sales, including the acquisition of Radisson Blu Sky Hotel, the Police and Border Guard Board building, the new Eesti Energia headquarters, and purchase of a portfolio of municipal rental apartments, a BPT Optima fund portfolio, the Solaris shopping center in Tallinn and the Saastumaket portfolio.

The average size of a transaction in the Baltic countries was 4.6 million euros last year, about 50% bigger than in 2014. However, 79% of all transactions were smaller than three million euros.

Commercial space accounted for 688 million euros or almost half of the total investment in real estate in the Baltic countries, compared with just 21% in 2014. The share of office space contracted from 32% to 24% and of industrial space from 20% to 11%. The share of accommodation establishments declined from 8% to 5%.

Prime yields of real estate investments continued to be on a downward trend and were lowest in Estonia.

Colliers estimates the volume of investment in real estate to remain on the level of 2015 this year.