Apžvalga.pdf

The Estonian investment market saw lively activity in Q2 2021, with a total investment volume of EUR 89 million, driven by industrial and office segments. The retail segment remained calm, but two landmark objects were put up for sale. Yield compression was observed in the industrial segment, reaching 7.0%, and some compression in the office segment. In Latvia, investment volume reached almost EUR 170 million, with notable deals including hotel transactions and office building sales. Prime office yields in Riga compressed to 5.8%, while prime industrial yield continued compression towards 7.0%. The Lithuanian investment market demonstrated strong activity, with a total investment volume of over EUR 150 million, driven by industrial properties, followed by office and residential assets.

In the office market, development in Tallinn remains active, with over 140,000 sqm under construction. Vacancy rates fluctuate around 8-9% in Class A and B1 buildings, with steady demand for newly built office space. In Riga, around 89,000 sqm of mostly Class A office space remains under construction, with vacancy in Class A buildings still high, but the market continues to absorb office space. The Vilnius office market maintained stability, with a development pipeline of 209,000 sqm and improving business sentiment.

The retail sector in Tallinn remains active, with new developments started, including the Tabasalu Centre and a new retail park in Kurna area. However, the T1 Mall of Tallinn SC filed for bankruptcy. In Riga, the long period of restrictions led to increased SC vacancy, exceeding 8% level as of Q2 2021. Despite this, some retailers, such as MyFitness and Sportland, continue to expand in Riga.