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Expert: real estate transaction volume this year may reach 100 million euros

Deniss Kairāns/linkedin.com.
The volume of commercial real estate transactions in Baltic States may exceed EUR 1 billion. Latvia, meanwhile, remains behind its neighbouring countries because the volume of transactions in the country may reach EUR 100 million, says CEO of Colliers International Deniss Kairāns.

He says the volume of transactions was EUR 700 million in three quarters. This is why it is likely that the prediction about EUR 1 billion will likely come true. In Latvia the volume of transactions after three quarters, according to available data, is EUR 79 million.

«There are multiple ongoing deals at the moment, so it is possible Latvia could exceed the EUR 100 million threshold this year. But there is no way Latvia can hope to outrun Lithuania or Estonia. But this is where it is worth mentioning that both Lithuania and Estonia had more projects to realize after the crisis. This means they have more to sell. In Latvia, on the other hand, people still sell houses built before the crises. There is also a limited selection of new projects. Another thing worth mentioning – we are very dependent on large transactions with trade centres. Last year there were transactions made with Riga Plaza and Domina. There were also Alfa, Mols and Dole the year before. A single business deal like that that immediately brings in a significant amount of money. This year there have been several smaller deals, but no major ones,» explains Kairāns.

Kairāns says the major difference among Baltic markets is associated with the fact that markets in Lithuania and Estonia recovered more quickly than the market in Latvia. The head of Colliers explains it with multiple factors. For example, Latvia suffered more than Estonia in the crisis. Lithuania also managed to attract more businesses than Latvia after the crisis.

This allowed Lithuania to build more than 20 new office buildings with a total area of more than 250,000 m2 after the crisis. Latvia completed only a couple of new projects.

«The situation in all three Baltic States is considered good. Still, development in Latvia’s neighbouring states is more rapid. Since the end of the crisis, we have not had sufficient businesses to create new jobs. Existing businesses continue developing but remain unable to provide sufficient guarantees for developers that new projects will go through if realized in the country. There are also more professional developers in Lithuania and Estonia. We have some as well, but they focus on smaller projects. Larger commercial projects are mostly developed by Estonian, Lithuanian or Scandinavian businessmen,» adds Kairāns.


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