baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Estonia Industrial Market
Industrial Market
Sqm (000s)
Dynamics of warehouse
space in Tallinn and Harju
County
800
700
600
500
400
300
200
100
0
2004
2005
2006
2007
2008
Total Stock New Construction
Expected Construction
2009
2010
Distribution of Warehouse
Space in Tallinn
5
12
35
24%
31%
45%
2011f
Number of Units
% GLA of Units
5,000 - 10,000 sqm 10,000 - 20,000 sqm
20,000 and more sqm
OVERVIEW
The volume of the Estonian economy
decreased by 3.6 per cent in 2008, and
negative GDP outcome continued in 2009,
with an average of minus 14.1 per cent.
Amidst a strengthening export-led recovery,
economic growth recovered in 2010 with an
increase in GDP of 6.6 per cent in the Q4
2010 relative to Q4 2009.
In 2010, the overall annual GDP grew by 3.1
per cent compared to the previous year.
The sales turnover and profitability of most
exporting-sector companies (export is the
main driver of economy recovery in Estonia)
has started to pick up in the first half of 2010
and exports of goods in 2010 exceeded the
historical highest level (the level of 2008).
According to Statistics Estonia, in 2010 the
export of goods at current prices increased
35 per cent and imports 27 per cent
compared to 2009. In the last months of the
year growth in trade accelerated as dispatch
and arrivals of machinery and equipment
increased the most.
At the same time, the rapid growth in
production recorded in 2010 was partly
influenced by the low reference base in
2009. During 2011-2013 the growth in
exports will stabilize in accordance with the
developments of main export markets and it
is indeed a positive sign that future economy
growth in the Nordic countries should exceed
the EU average expected growth.
Supply
By 2010, the total supply of new industrial
and warehouse premises was estimated at
12,500 sqm. The estimated total stock of
industrial facilities exceeded 701,500 sqm
(approx 195,000 sqm of generic facilities
plus 506,500 sqm of built-to-suit facilities).
During the last few years the most intensive
development of new industrial and
warehouse facilities has been concentrated
in Tallinn’s suburbs and in nearby
municipalities. The most developed logistics
areas lie in the eastern and south-eastern
part of the city. Development of manufacturing
facilities and warehouses is concentrated in
three main areas of Tallinn and its suburbs.
Most premises built in 2010 were small,
detached warehouses and industrial
built-to-suit projects (with a GLA less than
4,300 sqm) mainly for companies
representing the food-manufacturing
industry. There was little development
activity in industrial parks in Harju, although
several companies owning or renting
premises in industrial parks have announced
expansion plans for 2011. According to the
Estonian Building Register, the amount of
occupancy permits issued in 2010 for new
industrial and warehouse buildings in Tallinn
and Harju County reached 30,665 sqm,
which is approx 57 per cent less than in
2009.
Although the projected new supply in 2011 is
approx 12,000 sqm, the volume of industrial
projects depends on acquiring tenants in
advance of development. New built-to-suit
projects in Harju County, planned for 2011
include industrial building for Kemivesi
located in Rae Industrial Park (with GLA
1,790 sqm), industrial building for Metus-Est
in Tabasalu (2,300 sqm) and office and
industrial premises for Laser Diagnostic
Instruments (1,239 sqm) in Ülemiste City in
Tallinn.
At the beginning of 2010 the warehouse and
industrial market has become more active
than some time ago. Several developers
announced that they would like to continue
with large development projects. For
example, the developers of Gate Tallinn and
American Corner Retail and Logistics Park
have both indicated that the negotiations with
potential tenants are in process and they
would like to start the construction works as
soon as possible.
Currently, five industrial and warehouse
projects with a GLA of over 20,000 sqm per
project and a total area of 228,000 sqm are
under way. Most of the existing stock
consists of industrial and warehouse projects
with a GLA of 5,000 - 10,000 sqm per
project.
CONTACT: AVO RÕÕMUSSAAR - a.roomussaar@colliers.ee
Colliers International | p. 64