Analytics, Baltic, Good for Business, Real Estate

The region’s attractiveness, the expert notes, is further increased by the activity of local investors, which over the last several years has enhanced the liquidity of the investment market. The potential of the real estate market in the Baltic countries, considering both already existing and new investment products that are being developed as well as the activity of local capital, is at least EUR 2 bn a year. A necessary condition for large international investors to join in is greater market liquidity. They are open to this markets which is promising but still maturing, ready to invest in properties with a value of over EUR 50 mln.

Those are new foreign investors that are making especially large transactions in the Baltic region. The property company newest to the region, NEPI Rockcastle of South Africa, conducted last year’s biggest single-asset deal with its purchase of the Ozas shopping center in Vilnius for EUR 124.6 mln.

“Looking at the investor profile in recent years, three phases can be distinguished in the development of the Baltic investment market. In the first one, prior to 2008, more than 45% of investors represented capital from the Nordic countries. In the second phase, until 2014, capital from the Baltic countries accounted for over 55% of investments in the region. And in the third, starting in 2015, more than half the market – 5% – is dominated by investors from Western Europe, the Nordics, the USA and other regions,” the Newsec analyst observes.

Last year the Baltics saw a high level of activity among local and Nordic funds and real estate investors as the combined value of transactions in the region reached EUR 810 mln. Deals in Latvia made up 32% of the Baltic total, while Lithuania had a 49% share and Estonia 19%. Most active were the Baltic region’s biggest commercial real estate fund managers, Northern Horizon Capital and EfTEN Capital, and the Swedish investment companies Eastnine and East Capital – all long-time players in the market.

Newsec – The Full Service Property House in Northern Europe – offers real estate owners, investors and tenants a full range of services within Advisory and Property Asset Management.