Tallinn Residential Real Estate Market 2017

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1 Tallinn Residential Real Estate Market 217 Prepared for Colliers Tallinn, Estonia

2 Billiom Sales Transactions in Estonia billion in total Apartments 45% billion in total Apartments 42% Apartments (sold as dwellings) Billion Source: Statistics Estonia 216 Other 5, Average price EUR 6,21 Average price for apartments in 216 EUR 56, , 5 3, 4 2, 3 2 1, 1, Apartments (sold as dwellings) Other Total number of deals (rs) Deals with apartments (rs) Source: Statistics Estonia 2

3 Commercial RE Investment Volume 6 CRE Investment Volume 5 All-time record Average price in 216 EUR 4.6 million 8% of the total number of deals - <5 meur Million Total investment volume, EUR million Number of deals (rs) Source: Colliers International 3

4 Residential Market in Estonia The number and total value of transactions with apartments in Estonia and Tallinn, Total number of transactions in Estonia (left scale) EUR, million Tallinn Total value, meur (right scale) Source: Estonian Land Board The number and total value of transactions with apartments in Tallinn in 216 Number Value, EUR million New apartments 2, Apartments, total 9,

5 CRE Investment Indicators 14% 12% 1% 8% 6% Residential Yields Range 4% 2% % Office Prime Yield Long term loan interest rate Retail Prime Yield Interest rate by housing loans Industrial Prime Yield 6-month Euribor Source: Colliers International, Bank of Estonia 5

6 Residential Market in Tallinn 8, 7,8 28 Tallinn Kesklinn , , , 5, , , 8, 7, 1 5 9,8 6, ,7 9,3 12, EUR/sqm/month 9, , Average asking price and number of apartments for rent in primary and secondary markets in Tallinn, , 216 Rent Rate, EUR/sqm (right scale) Source: kv.ee 6

7 Residential Development Market in Tallinn m2 Completed dwellings in Tallinn, Number of new apartments in Tallinn (left scale) Floor area of new apartments in Tallinn, m² (right scale) Source: Statistics Estonia Completed dwellings in Tallinn by type 1-2-storeyed 3-5-storeyed 6-8-storeyed 9- and more storeyed Total Source: Statistics Estonia , ,48 7

8 Tallinn Map Population* of Tallinn by districts TALLINN Pirita Põhja-Tallinn CBD Haabersti Kristiine Lasnamäe City Centre Mustamäe Nõmme *As of Source: Population Register 8

9 New developments Name Location / City district Developer Price per sqm Number of apartments Name Location / City district Developer Price per sqm Number of apartments City Residence Tartu road 52 Rotermann Quarter, R18 Promenaadi House City Centre, Tartu Rd 56 City Centre, Tartu Rd 52 City Centre City Centre, Poordi 3, 5 Endover Merko Rotermann City Capital Mill 1,775 4,167 /m² 2,219 3,247 /m² 3,4 5,14 /m² 2,8 4,743 /m² Meerhof 2. Tivoli Rannapargi Noblessner City Centre, Pirita tee City Centre City Centre Põhja-Tallinn Metro Capital Metro Capital Sea Reval Merko + BLRT 2,62 4,795 /m² 2,39 3,17 /m² 2,1 3,75 /m² 1,711 4,78 /m²

10 New developments Name Location / City district Developer Price per sqm Number of apartments Name Location / City district Developer Price per sqm Number of apartments Laev Tondi Quarter Skyline residents Kadaka Twins Haabersti Kristiine Lasnamäe Mustamäe Al Mare Estate Pro Kapital U.S. Invest AS GMP Grupp 3,11 4,759 /m² 1,758 2,38 /m² 2,34 3,35 /m² 1,5 2,6 /m² 29 On sale 4*31 (6 in total) Paepargi Towers Pärnaõue Pöörise Hõbemetsa Lasnamäe Haabersti Mustamäe Haabersti Merko NCC TTP Kaamos 1,644 2,247 /m² 1,482 2,32 /m² 1,727 2,155 /m² 1,746 2,49 /m² ca 8 in total On sale 3*8 (8 in total) On sale 3*2 (47 in total)

11 Conclusions & Trends: Investing into residential properties has been and still is largely private persons business; Foreigner investors are and have historically been focused on city centre, locals also buy apartments in suburbs; Focus has historically been mainly on single apartments not on entire apartment houses; Starting from 21 owning apartments as LLC has become more and more popular; Most wanted are new apartments with 1-2 bedrooms located in the city centre; Estimably 23-28% of new apartments in the city centre and 5-1% in the suburbs are bought on investment purposes; Yields of residential properties have always been at least 3-6% lower than for investments into commercial real estate; Due to compressed commercial property yields, investments into residential segment have become more interesting for larger investors; Existing residential investment projects include Sakala 9, Pronksi 3, Mere pst 8, Tööstuse 83, Randla 11; Even though the interest for residential sector has increased among professional large-scale investors, small investors will continue to dominate on residential market in mid-term perspective. 11

12 Thank You! Colliers International Estonia Lõõtsa 2a Tallinn Tel Fax

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