baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Estonia Retail Market
Sqm (000s)
Dynamics of Retail Space in
Tallinn
f - forecasts
600
500
400
300
200
100
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011f
2012f
Total Stock New Construction
Expected Construction
Distribution of Retail Space
in Tallinn by Size
1
9
19
12%
52%
36%
Number of Units
% GLA of Units
5,000 - 15,000 sqm 15,000 - 45,000 sqm
45,000 and more sqm
Distribution of Retail Space
in Tallinn by Type
17
9
8
71%
13%
16%
Number of Units
% GLA of Units
DIY Hypermarket Hypermarket
Shopping Centre
The development of the second phase of
Tähesaju City (the planned volume of the
second stage is 35,000 sqm) was started in
summer 2009 and Europe’s building material
retail giant Bauhaus opened the doors of its
new store in April 2010, seeing Tallinn’s DIY
segment expanded by ca 20,000 sqm.
On the 30th of September 2010 Kristiine
Shopping Centre opened 20,000 sqm of GBA
extension with 45 new tenants (such as
Marks & Spencer, Shu, Esprite, Vila,
Rademar, Terranova, Geox, S’Nob, Matinique
& Inwear), making Kristiine Shopping Centre
the largest shopping centre in Estonia in the
terms of the number of different stores.
While Kristiine shopping centre completed its
enlargement in Tallinn, big grocery chains
like Rimi, Prisma and Maxima continued to
open their stores all over Estonia. Prisma
opened its first hypermarket in Narva with
more than 9,000 sqm of retail area, making it
the largest hypermarket in the East-Viru
County, and another was opened in Tartu in
November.
Rimi opened a new supermarket near Tallinn
on the 3rd of June in Tabasalu with a total
area of ca 2,200 sqm; Maxima open a small
grocery store with an area of ca 800 sqm in
Põhja-Tallinn city district in the beginning of
July indicating a trend of increasing
popularity of small size local stores.
Development activity in the retail sector is
expected to continue mainly with the
expansion of existing shopping centres,
although completion of several big retail
projects / retail parks during next three years
has been announced also.
Despite an improved global economic outlook,
retailers are still expressing caution in terms
of expanding and committing to new stores.
Some future projects include:
◊ “SMUULI” shopping & commercial
centre, with total projected area of ca
104,000 sqm (with the shopping and
entertainment centre amounting to
60,000 sqm and office premises of
about 44,000 sqm). The centre plans to
◊
◊
have more than 200 different stores
selling clothing, footwear, sports goods,
electrical and household appliances,
beauty products, household products,
home goods, and furniture and includes
a multiplex cinema, ice rink, bowling
alley and a children’s playground. The
project will be completed in stages. The
projected beginning of the first stage is
planned for around 2012 - 2013.
Gate Tallinn, which promotes itself as
the Largest Retail Park in the Baltic
States with more 240,000 sqm of retail
and warehouse space (more than
170,000 of retail space).
American Corner Retail and Logistics
Park, a huge retail and logistics project
close to Tallinn with more than 110,000
sqm of retail and warehouse space.
Construction is expected to start in the
near future with the first buildings in
occupation by the end of 2011. The
developer hopes to attract European
retailers and distribution operators.
Further sustainable development of shopping
centres depends on the turnover generated
at existing premises. Tenants’ rent payment
capability should be also taken into
consideration in determining the feasible
rental rate. One possible option is a turnover
sharing agreement in calculating the rental
level payable - a percentage is applied to the
turnover in addition to a minimal fixed base
rate to cover owner investment and loan
expenses.
Availability of finance is another important
issue that has had notable impact on possible
development in the retail sector.
There are currently 17 shopping and leisure
centres in Tallinn with a total GLA of approx.
346,500 sqm of retail space and 9 separate
hypermarkets. Most of these hypermarkets
were opened in Tallinn during 2000 - 2003.
Tallinn’s largest shopping centres are Rocca
al Mare with a GLA of approx. 53,500 sqm,
Kristiine with a GLA of approx. 42,500 sqm
and Ülemiste with a GLA of approx. 37,500
sqm.
CONTACT: AVO RÕÕMUSSAAR - a.roomussaar@colliers.ee
Colliers International | p. 60