Although the investment turnover reduced by one fourth in 2012 in comparison to the EUR 643 million closed in 2011, it should be noted that investment activity in 2011 was driven by several large single deals such as the acquisition of Kristiine Shopping Centre in Tallinn for EUR 105 million, which comprised almost 16 per cent of the total transaction volume of the year.
Retail continued to dominate the investment landscape, accounting for over one third (37 per cent) of all investment activity. Interest in retail properties is driven largely by stable retail sales growth figures across the region during the last two years (above the EU average).
At EUR 77 million, investment in industrial/warehouse property accounted for the second largest share of the transaction volume in Baltic States in 2012, mostly due to the largest single-object real estate deal done by East Capital – the acquisition of a 40,000 sqm VGP warehouse park near Tallinn with the transaction price of EUR 24 million.
Investment activity in the office segment declined in 2012 compared to 2011. Office deals, which accounted for 26 per cent of all transactions in 2011 in the Baltics, amounted to only 14 per cent in 2012. The largest deals were the sale of Baltika Quarter (13,130 sqm) to Kawe Group for EUR 13.6 million in Tallinn in 3Q and the acquisition of an historical office building at Kalku St. 15 for EUR 8.9 million in Riga in 4Q.
The hotel investment market (approx. 11 per cent of total volume) was continually active in Latvia during 2012. More than 10 hotel properties sold during last two years.
„Colliers expects the upcoming years (2013-2014) will be relatively active with rental flows slightly growing. Prime yield is expected to remain stable. Capital value growth will happen more likely as a result of improving net operating income. The main investment targets in 2013 continue to be retail and office properties with strong cash-flow and core locations”, said Colliers Latvia CEO Deniss Kairans.