The overall market turnover in 2013 in the Baltic region was around € 600 M, equally distributed between the three countries. The directions that the capital flows undertake in the three countries however are very different:
In Estonia, the biggest share of market turnover is generated by a number of local institutional players, who are actively expanding and diversifying – location-wise, segment-wise, and risk-wise, - their portfolios. The average lot size per asset is around € 5 M; the market however is dominated by portfolio deals that simultaneously involve a number of assets;
In Latvia, the biggest share of market turnover is generated by the institutional entrants from the two neighbouring countries, and by private capital inflows from Russia and other CIS countries. The average lot size per asset is around € 5 M; portfolio deals are less common;
In Lithuania, almost one third of the annual market turnover was generated by a single asset deal with the buyer coming from Finland. The lion share of the remaining turnover involves participation of the local asset management company Lords LB.
Pan-region wise, the most active purchasers were Estonian EfTEN Capital and Capital Mill, and Lithuanian Lords LB. The most active vendor was Northern Horizon Capital (former Baltic Property Trust), undergoing divestment process for a number of funds under its management, and Ektornet, real estate affiliate of Swedbank.
Asset-wise, the interest was mostly geared towards the office segment in all three Baltic States. At the same time, each of the countries accommodated a number of deals with small to medium sized retail assets, and a few deals with medium to large sized industrial assets.
The estimated investment volumes in 2014 are similar to those generated in 2013. The interest is expected to be mostly geared towards office and industrial segments.
Source : DTZ (Groupe UGL)