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BREL Forum 2022 insights

panel of people sitting in half circle in brel forum

Questions remaining in spotlight for Baltic investors

Two intense event weeks are behind us. First, EXPO real in Munich, then BREL Forum in Riga - despite almost 2000 km apart, it is evident from the conversations during both events that real estate markets across Europe are experiencing the same pressures and must face similar decisions.

When it comes to the Baltics, below are some of the questions that remain in the spotlight:

  • With increasing financing costs, will yield spread that Baltic markets offer be enough to maintain investment volumes and compete for investors’ attention within wider CEE region?
  • Shall we see an upward yield shift, which more mature and larger European markets are already experiencing? Or overall lack of supply, moderate leverage across landlord portfolios and narrow investment geography of many domestic investors will keep prime opportunities rare and in high demand, stabilising the pricing locally?
  • Will the indexation caps that many landlords choose to apply despite lease agreement terms not requiting to do so, combined with other factors, result in valuation drops which otherwise could be partially avoided even if yields shift?
  • Shall we see a stable “new normal” when it comes to the development costs during the next 6-12 months? Will rent rate growth and developers’ ability to minimise additional tenant costs by sustainable developments be enough to make business plans work again?

Either you are on the hold, buy or sell side, it is important to ask yourself these questions and more. Meanwhile, one thing that is absolutely clear in this uncertain environment, is that real estate players will not be bored in the next 12 months.

See the Colliers investment team insights from Expo Real 2022 by clicking on the link here.


Related Experts

Angela Kolesnikova

Partner | Director | Investment

Riga

My area of expertise includes, but is not limited to:

• Real estate investment advisory;
• PanBaltic Asset disposal process coordination and property marketing organization;
• Analysis of cash flow and development projects for investment purposes;
• Financial and competition analysis; 
• Risk and overall performance evaluation; 
• Strategy development and negotiations;
• Real estate auction organization.

View expert