baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Estonia Retail Market
Retail Market
OVERVIEW
The year on year monthly decrease in retail
sales that has lasted for almost two and a
half years reversed to a rise of 1 per cent in
September and October in 2010. In November
and December the growth in retail sales
slightly accelerated further. Overall, in 2010,
the retail sales decreased by 4 per cent at
constant prices compared to 2009. The
volume of private consumption in 2010 was
roughly the same as 2004, making a negative
contribution to GDP growth. The growth of
private sector consumption expenditure
remains lower than the average growth of the
economy. Pickup in domestic demand will
take place with a substantial lag behind to the
recovery of export income, depending on
strengthening consumer confidence and the
banking sector’s support to the economy
(recovery in lending).
Weak domestic demand and a fall in wages
were the main reasons behind the annual
decrease of the consumer prices by 0.1 per
cent in 2009. The consumer price index
increased 3.0 per cent in 2010 on the 2009
average prices, driven up by price rises in
motor fuel, electricity, heat energy, food and
beverages. Rapid inflation (as there was in
the second half of 2010) is not expected to
continue in 2011 and remains only slightly
above the euro-area average although Euro
adoption will also contribute to price growth
in 2011.
Sales per square metre of GLA in Tallinn’s
biggest shopping centres are positively
correlated with wages growth, while wages
growth is dependant on unemployment level
in the country. Therefore with an ongoing
high rate of unemployment (above 10 per
cent) ongoing increases in retail sales are
expected to be very modest at least until
2014. Retail sales are expected to grow in the
first half of 2011 mainly due to a low y-o-y
comparison base rate, but from May the pace
of growth will slow down considerably.
Supply
By the end of 2010, the stock of Tallinn retail
space had increased by approx. 32,000 sqm
since the beginning of the year, totalling
461,800 sqm (1.14 sqm per capita). The new
retail space was added largely from
expansion of existing retail centres – Kristiine
Centre and the second phase of Täesaju City
(Bauhaus).
The most intense retail developments
occurred in Tallinn’s Kristiine and Lasnamäe
districts.
Completed Projects in Tallinn for 2010
Project
Tähesaju City,
2nd phase
City
district
GLA,
sqm
Kristiine expansion Kristiine 12,000
Total 32,000
Anchor Tenant
Lasnamäe 20,000 Bauhaus CityPro
Marks & Spencer, Esprite, Vila,
Terranova, Högli, Matinique & Inweari
Developer
Pro Kapital Grupp
List of New Potential Projects in Tallinn
for 2011 - 2012
Expected
Completion
Project GLA, sqm Status Developer
2011 - 2012 Mustikas Centre 5,500 Under construction Combinent
2011 - 2012 Maxima 10,000 In planning Maxima Eesti
2012
Tähesaju City,
2nd and 3rd phases
9,000 In planning CityPro
2012 - …
Rotermann Quarter,
3rd and 4th phases
1,200 In planning Rotermann Eesti
2012 - … Gate Tallinn 47,000 In planning Trigon
2012 - …
American Corner Retail and
Logistics Park
110,000 In planning
2012 - …
Smuuli Shopping and
Commercial Centre, 1st phase
Total 242,700
Helios Properties
and Süda Maja
60,000 In planning ELL Kinnisvara
CONTACT: AVO RÕÕMUSSAAR - a.roomussaar@colliers.ee
Colliers International | p. 59