Estonia, Markets and Companies, Real Estate

In April of this year, altogether three offers were made in a public auction. Then, the best offer was made by Merko, which made a bid of 5.53 mln euros. The two other bids were made at 2.7 mln euros and 2.1 mln euros, respectively.

However, Merko then withdrew from its offer and paid ERR a deposit of 100,000 euros. The rules did not allow the second or third bidder to be accepted upon the first's withdrawal, and a new competition was subsequently organized.

The new competition was also won by Merko, which this time made a bid of 4.5 mln euros without VAT.

Vilde told that realtor Pindi estimated the price of the properties on Tuisu and Tervise streets to be 1.6 mln euros, including VAT. "We then thought that we would like get more for them, Uus Maa started communicating with the city to value them and sell them for more," he added.

According to Vilde, a negative aspect of a small market is that competition is small but at the same time, ERR received more than twice as high a price as planned.

"The Estonian public broadcaster is hoping to formalize the transaction in the first days of September," Vilde said. Merko Ehitus did not yet wish to comment on its plans with the properties to be purchased.

ERR planned until 2012 to relocate all its operations from the city center into brand new buildings to be erected on the Kristiine district plots. In 2012 the supervisory board of ERR decided, however, that the so-called Tuisu project will be discontinued and development of buildings for ERR will be started in the city center.

On offer at the auction were properties at 21 Tuisu Street / 2 Tervise Street, 2a Tervise Street, 4 Tervise Street and T3 Tervise Street and T4 Tervise Street. The total area of the properties is 41,569 square meters.

The public broadcaster is planning to direct the money received from the sale of the properties into the establishment of a new television complex between ERR's current news building and radio building in the region of Gonsiori and Kreutzwaldi streets in the Tallinn city center. The new complex will be built according to the architectural competition winning design of Kadarik Tuur Arhitektid.

Estonia is about to start the construction of a new television complex for public broadcaster ERR and the renovation of the building of the National Library for 85 mln euros in total, it appears from a document on real estate investments by the state for the next several years endorsed by the Cabinet on Thursday.