Estonia Property News - updated weekly

05.01.06 - Danish textile company Baltic Jersey plans to move all jobs from Denmark to its production plant in Estonia

Peer Bech, production manager of J. Morup Stof Aps that owns Baltic Jersey saying that at present 60 pct of the company’s output is produced in Estonia.“During this year we will transfer all production to Estonia,” said Bech Conference adding that the move means laying off up to 10 people in Denmark
Baltic Jersey has 60 weaving machines of which 30 are rented from Marat Ltd. to which the company provides subcontracting services. The company will add 10 weaving machines from 2006.
The company employs 30 people in Sindi and plans to hire another 15 people when new machines arrive.
The company ended its most recent financial year with a profit of EEK 0.8 mln at sales of 25 mln.

18.01.06 - Tallink to invest €300million in leisure and entertainment complex in Tallinn

The area will be 162 600 sqm, 10 times bigger and 13 times the cost of Riga’s biggest entertainment centre, Go Planet, and will be completed in 2010. The project will contain entertainment and leisure facilities, restaurants, hotels, bars, apartments and shopping and will become a magnet for tourists in the Nordic region. It will become one of the largest complexes in the Baltics.
”To Estonia, Tallink City means a major investment for Estonia and Tallinn” said the minister of economic affairs Edgar Savisaar.
“Even at the present moment, our Old Town is more fascinating than Helsinki – now it’s time to turn the new city like that as well. I hope that Tallink City will become the new attraction centre of the Nordic countries.”
Experts believe Tallink City will become the new symbol of Tallinn – as the Eiffel tower in Paris and London Eye in London.

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19.01.06 - The New York Times calls Tallinn the ‘Silicon Valley’ of the Baltics

Due to the recent sale of Skype, an Estonia based software company that was bought by eBay for a record $2.5 billion, the New York Times calls Tallinn the new Silicon Valley of the Baltics.
Foreign investors are swooping into Tallinn's tiny airport in search of the next Skype.
What has made Tallinn the hi-tech city it is today? In the 1950's, the Soviets chose the Baltic states as the site for several scientific institutes. Estonia wound up with the Institute of Cybernetics - basically a computer sciences center - that now houses Skype and many other firms.
That scientific legacy remains embedded in society, people say. It is most visible in Estonia receptiveness to new technology. Internet penetration is estimated by the telecommunications industry to be 50 percent of the population, the highest in Eastern Europe.

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06.02.06 - Estonia ranks No. 8 in the world in terms of how successfully a country attracts foreign investors, Forbes.com

Latvia was ranked No. 22 and Lithuania No. 29.

According to Forbes, the top ten in attracting investments were Denmark, Finland, Iceland, USA, UK, Singapore, Australia, Estonia, Ireland and New Zealand.

Last year, the U.S. State Department found that Estonia was the most competitive of all new European Union countries, and that one-third of its GDP was generated by companies owned at least in part by foreigners.

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13.02.06 - Estonia remains Baltic leader in terms of tourism – Enterprise Estonia

Ulari Alamets, board member of Enterprise Estonia, writes in Aripaev that although Latvia is developing fast as a travel destination, Estonia remains an uncontested leader in incoming tourism in the Baltics.

“While Estonia earned €888 mln in incoming tourism in 2004, this is 25 pct more than incoming tourism revenues earned in Lithuania (€709 mln) and 60 pct more than in Latvia (€556 mln)."

Darren Goodson of TallinnProperty.com adds, "Based on the population size of each country, Estonia's incoming tourism receipts on a per capita basis equals €634 compared with Lithuania's €202 and Latvia's €222, this means the financial impact of the tourism boom will be far more positive in Estonia."

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16.02.06 – Tallinn city centre apartments and property prices – up to 17% cheaper compared to Riga and Vilnius

In a recent survey by real-estate office, Arco Vara, shows that prices of apartments in Riga and Vilnius are up to 17% cheaper in the city centre compared to Tallinn.

Arco Vara that is one of Estonia’s largest property companies says that while new and renovated property in central Tallinn costs between EEK 25,000 and 40,000 per square metre. The price of centrally located renovated property and apartments in Riga is between 36,000 and 55,000 and in Vilnius between 25,000 and 55,000 kroons per square metre.

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21.02.06 - Prices of Tallinn property and apartments will rise by 15-20 percent in 2006 – Real estate experts

Property companies expect house and apartments prices in Tallinn to go up between 15 to 20 pct this year. This is about half the increase of last year when property prices spun out of control.

Ulvi Vikat, head of marketing of Pindi Kinnisvara, a property broker, says that prices are being pushed up by growing demand for new apartments, cheap loans offered by banks and increased salaries and wages.

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06.03.06 - Tallinn has the most developed property market in the Baltics - study

This is a one of the findings of a recent study on the property market in the Baltic countries. The study conducted by Re&Solution, PricewaterhouseCoopers and Lawin provides an overview of the economic and social situation in all three countries. According to real estate consultant Re&Solution, the study can be considered the most extensive property comparison of the three Baltic states to date as a wide range of experts from all three countries worked together in the development process – property specialists, lawyers and tax specialists.

Raitis Nespors, managing director of Re&Solution Latvia, pointed out that international retailers entering the market prefer Tallinn over the other Baltic capitals. Nespors predicts that the retail property market will develop through expansion of existing shopping centers where possible and further strengthening of their tenant mix.

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07.03.06 - Moody’s upgrades Estonia to an A1 rating – highest in Eastern Europe

Moody's assigned a positive outlook to the ratings for Cyprus (A2), Estonia (A1), Latvia (A2), Malta (A3) and Slovenia (Aa3) and placed the ratings of Slovakia (A2) and Lithuania (A3) under review for upgrade.

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10.03.06 - Property prices in Estonia rose by more than any other European country last year, the Royal Institution of Chartered Surveyors (Rics) has found

The Rics report on the European property market shows that Estonia house prices, especially apartments, rose by 28%, ahead of Denmark at 22%. By contrast UK property prices rose by just 2%, while prices in Germany actually dropped by 2%. The report suggests that prices in Northern Europe are now catching up with those in the Mediterranean.

What is going on? It is not just in the UK that home owners have seen their value of their homes shoot up. The whole of Europe has been going through a house price boom during the past seven years and Rics predicts that this will continue in 2006.

Estonia and neighbouring Denmark said the changing nature of the mortgage market has given a boost to prices. Previously people took out home loans for between 20 and 30 years, often at fixed rates. Now the mortgage market is looking more like that of the UK. Increasingly residents can take out mortgages where the interest rate varies annually, or where only interest is payable each year. That means would-be home owners can borrow more money than before and at cheaper rates too, thus driving up prices. In Estonia, a country with just 1.3 million people and a small property market, the big influence has been overseas buyers. "A few hundred overseas investors have had a big impact on a small market, mainly in apartments" said the author of the Rics report, Professor Michael Ball of Reading University.

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20.03.06 - 20.03.06 - Estonia economy to grow 8.2 pct in 2006 – Estonia Finance Minister

The Estonia Ministry of Finance expects the country's economy to grow 8.2 pct in 2006 and 7.7 pct in 2007.
In its previous forecast issued in August 2005, the ministry said the economy is expected to keep growing at an annual rate of a little more than 7 pct over the next few years. GDP growth in the EU is estimated to come to 2.1 pct in 2006 and 2.4 pct next year.

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03.04.06 - Estonia’s economy continues to boom – 9.8% in 2005, Statistical Office

Estonia's gross domestic product grew by 9.8 pct in 2005, according to the Statistical Office. At the beginning of this month, the central bank estimated 2005 GDP growth at 9.5 pct.

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19.04.06 - IMF expects Estonia to post the highest growth in Central and Eastern Europe in 2006 and 2007

Bloomberg quoted IMF’s semi-annual World Economic Outlook which said that Estonia’s economy should expand 7.9 percent this year and 7.1 percent in 2007.

Estonia has agreed with an EU ruling that it will not fulfill its plans to adopt the euro at the beginning of next year because of excessive inflation, which has also scuppered the chances of another Baltic country, Lithuania, of joining the euro zone at the same time.
Latvia is set to have the highest current-account deficit in the region next year of 12 percent of gross domestic product..

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20.04.06 - Estonia, Russia, Finland to discuss development of 'growth triangle'

On April 25-26, Russian-Finnish-Estonia three-sided meeting will take place in Toila in Northeast Estonia, according to a Regnum report. The program of the meeting includes acquaintance of Finnish and Russian participants with provisions of Estonia legislation in sphere of business development, custom rules, as well as with perspectives of development of free industrial zones in Estonia.

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20.04.06 - Government wants to make Estonia one of EU’s five richest countries

Estonia Reform Party has published the key points of its economic policy which state that the party’s long-term objective is to make Estonia one of EU’s five richest nations. “This is a long-term vision and a major target, but in order to get there we would have to start taking steps right now,” said Reform Party’s leader Andrus Ansip who is also the current Prime Minister.

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20.04.06 - Powerful Russian investors have big plans for Estonia

Prominvestors, a Russian investment holding, is preparing large investments in the Estonia transit sector, said the company’s president Sergei Generalov. Among others, Prominvestors is believed to be interested in acquiring 66 pct of Estonia Railways that is being sold by BRS. Prominvestors has more than a billion US dollars worth of assets and the companies it owns employ over 30,000 people. Generalov was Russian Minister of Fuel and Energy in 1998-1999.

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02.05.06 - Estonia posted the fastest rise in property prices in the world, shows a new survey published in The Independent

According to the paper, property prices in Estonia increased by 17 pct in the last 12 months.

Estonia was closely followed by Denmark (16.1 pct), New Zealand (13.5 pct), Bulgaria (12.5 pct) and South Africa (12.1 pct). Average annual global house price inflation had fallen to 6.1 per cent at the end of March from a peak of almost 11 per cent in 2004. The price increase in apartments in Tallinn was particularly steep.

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09.05.06 - Estonia to post highest economic growth in Europe in 2006 – European Commission

According to the European Commission’s latest biannual economic forecasts, Estonia will have the highest economic growth in Europe in 2006.

Aripaev, the Estonia business newspaper, says in its economic survey, that the Estonia economy continues to grow at record speed which is hovering at around 10 pct a year. According to Aripaev’s analysts, strong exports, production and consumption figures show that Q1 2006 growth may be between 12 and 13 pct. Statistics Estonia is expected to announce growth figures in early June. The explosive growth is, however, affecting some businesses, for instance, construction companies and IT firms are complaining of lack of workforce.

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June 2006 Estonia Property Newsletter

July 2006 Estonia Property Newsletter

August 2006 Estonia Property Newsletter

September 2006 Estonia Property Newsletter

October 2006 Estonia Property Newsletter

November 2006 Estonia Property Newsletter

December 2006 Estonia Property Newsletter