Investment Market Update

Baltic : Transaction volumes are growing again - H1 2013

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In 2011, Estonia became the first of the Baltic States to join the Eurozone. Neighboring Latvia is on track to make the same step in January 1, 2014. Despite the setback, Lithuania is still pressing ahead with its second attempt to join the Eurozone, eyeing 2015 as a target date. Although overall, there is a remarkable skepticism towards Eurozone, all threecountries follow the Maastricht criteria, which guide the markets to more stable environment.

After a prolonged period of investors’ inactivity, transaction volumes started to rise again in 2011 in each of the three Baltic States. Transaction volumes in H1 2013 were especially high in Estonia, whereas in Latvia and Lithuania volume stayed approximately at the same level.

The region overall is dominated by local institutional players. Danish Baltic Property Trust becomes the most active vendor in the market with BPT Secura undergoing divestment process and BPT Optima pursuing deleveraging strategy. Institutional investors from Estonia set themselves firmly on course not only in their home country, but also towards neighbouring markets, with two major players, EfTEN Capital and Capital Mill, expanding into Latvia and Lithuania in H1 2013.

Due to Latvian real estate market attractiveness to the investors from Russia and CIS, the country is targeted by private investors of the above-mentioned origin, who are ready to undertake higher than average risk profile, and hence direct their capital towards residential, hotel, and development properties.

Source : DTZ (Groupe UGL)

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Mots-clés : DTZ