We are pleased to introduce our annual overview covering commercial real estate market trends and forecasts as well as the latest statistics and insights for the Baltic region.
The Covid-19 outbreak has had a major impact on economies around the globe, Baltic countries are not exception. After strong year 2019, all Baltic economies contracted due to the pandemic. Nevertheless, Baltic investment market observed several large transactions and even entry of new international players. For the fifth year since 2015, total volume of commercial real estate investment in the Baltics in 2020 exceeded the EUR 1 billion mark, remaining precisely at the level achieved in 2019. Since March 2020, the office market has been hit by the Covid-19 pandemic, resulting in drastic restrictions and remote working, thus, postponing a large amount of transactional activity since then. However, construction and project development continued throughout the year 2020 in the office segment.
Retail enterprises have been amongst the most significantly affected by the pandemic due to waves of restrictions that considerably limited or completely halted retail activities, except for e-commerce. Those retailers who have managed to adjust to the changing demand, suffered less. The pandemic has significantly accelerated ongoing market changes, particularly in regard to development of e-commerce, omni-channel retail strategy and its supporting infrastructure, such as last mile logistics.
Warehouse and industrial property development were least affected by the pandemic. Almost none of the projects under construction or in planning were cancelled or postponed. Developers are confident about market perspectives and are initiating construction of new speculative projects.
Hospitality industry was left reeling from the Covid-19 outbreak. Travel activity has ground to a halt and has forced an upsurge in cancellations, a decline in bookings, and rising unemployment across the sector. The tourism sector is facing a crisis like no other, with heightened uncertainty surrounding its recovery.
As always, Colliers team in the Baltics is here ready to serve your needs in the region and worldwide to accelerate our mutual success!