2012 Global Market report - NAI Global

The Baltics (Latvia/Estonia/Lithuania)
Contact
NAI Baltics
+371 6731 2396
Country Data - Estonia
Area (Sq Mi)
17,462
GDP Growth
3.5%
GDP 2011 (US$ B) $19.8
GDP/Capita (US$) $14,948.13
Inflation Rate
2.0%
Unemployment Rate 16.4%
Interest Rate
1.0%
Population (Millions) 1.331
Latvia
Area (Sq Mi)
24,926
GDP Growth
3.3%
GDP 2011 (US$ B) $23.88
GDP/Capita (US$) $10,628.40
Inflation Rate
0.9%
Unemployment Rate 17.5%
Interest Rate
3.5%
Population (Millions) 2.247
Lithuania
Area (Sq Mi)
25,200
GDP Growth
3.1%
GDP 2011 (US$ B) $36.73
GDP/Capita (US$) $11,133.41
Inflation Rate
1.3%
Unemployment Rate 16.0%
Interest Rate
2.0%
Population (Millions) 3.299
The Baltics At A Glance
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
EUR
EUR
9.00
9.00
EUR 12.00
EUR 12.00
$
$
13.94
13.94
$ 18.58
$ 18.58
5.00%
5.00%
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
EUR 5.00
N/A
N/A
EUR 7.00
N/A
N/A
$ 7.74
N/A
N/A
$ 10.84
N/A
N/A
20.00%
N/A
N/A
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
EUR
EUR
4.00
1.50
N/A
N/A
EUR
EUR
6.00
4.50
N/A
N/A
$
$
6.19
2.32
N/A
N/A
$
$
9.29
6.97
N/A
N/A
25.00%
30.00%
N/A
N/A
City Center
Neighborhood Service Centers
Community Power Center (Big Box)
Regional Shopping Centers/Malls
Solus Food Stores
EUR
EUR
7.00
N/A
8.00
N/A
N/A
EUR 23.00
N/A
EUR 15.00
N/A
N/A
$
$
10.84
N/A
12.39
N/A
N/A
$ 35.61
N/A
$ 23.23
N/A
N/A
5.00%
N/A
3.00%
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
The outlook for the Baltic States is better than in other parts of
Europe. The GDP is expected to grow by 3.6 % in 2011, but a
slowing global business cycle weakened the recovery with the
growth rates forecasted at 2.6 % in 2012 and 2.9 % in 2013.
Estonia shows the highest growth rate in the region, followed
by Lithuania and Latvia. Earlier imbalances have been reduced
and the resilience against global turmoil is stronger.
The office market faced a slowdown due to the lack of available
financing and a decrease in demand. The market remains
tenant driven with most leases short-term with early termination
clauses. Rental rates have reached the bottom with a stabilization
in vacancies and rents achieved but no significant improvement
expected in the near future as unemployment remains high.
Highly selective investors are interested in only well leased
locations. Recovery is expected no earlier than 2012.
The retail market realized considerably lower vacancies than
the office market. Wage increases and consumer confidence
growth positively contributed to the retail volumes (+4.5%
year-over-year) and customer flow. Factors affecting this
market include; upward pressure on rents in prime locations,
several well performing retailers moved to better locations or
expanded their space and some new, international companies
chose to enter the Baltic’s retail market.
The downturn in the industrial/warehouse market stopped, with
the bottom being reached at the end of 2010. However, despite
a slight stabilization, the activity continues to remains low with
vacancy around 30%. Most vacant space is accumulated in
large scale projects. The recovery in this market is expected to
lag behind the retail and office sectors. Continuing negative
trends regarding Class C properties are due to increasing
vacancies related to the relocation of tenants. Most developers
are looking for pre-let agreements from large international
tenants.
A slight boost is forecast in the number of transactions
expected in the Baltic residential/multifamily market due to an
increase in activity among lenders. There was a 32% yearover-year
price increase for new projects in prime locations.
Equity rich investment funds, developers and private individuals
from CIS countries are active in the residential market.
After two depressing years in a row, hotels have reported
improved results in H1 2011. The occupancy level increased
from 33% in H1 2010 to 43% in H1 2011. However, operators
are still cautious and many have postponed their final decision
to enter the Baltic States market. There is still room for major,
international hotel chains to enter the market.
EUR 10.00 EUR 60.00 $ 56,206.43 $ 337,238.56
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
EUR 10.00 EUR 100.00 $ 56,206.43 $ 562,064.26
Brussels, Belgium
Contact
NAI Belux
+32 2 420 10 10
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
11,787
The moderate economic recovery of 2010 will continue into
2012. After the recession of 2009 (GDP -2.7%) the economy
experienced a somewhat bumpy recovery during 2010. Even
so, the financial markets are worried about the current political
stalemate, which leads to a postponement of necessary
structural adjustments to the budget. The caretaker cabinet
led by Yves Leterme will aim to reduce the deficit below 4.1%
of GDP in 2011, as agreed with the European Union.
The Belgian real estate market remains subdued with the
availability of Grade A space driving recent rental drops in
a number of submarkets over the quarter. With no new
government for the moment, most public deals have been
put on hold, and although the economy is recovering, the
market remains uncertain. Rents held firm in the CBD, but
eased down over the quarter in the city center, north station
and peripheral submarkets. Take-up activity reached half of
the five year average. This combined with a limited speculative
completion kept the vacancy rate in Brussels at 11.2%.
Development activity was historically low in 2011 and that
will continue to be the case in 2012. Prime face rent
remained stable. The total real estate investment volume in
Belgium reached EUR 0.48 billion in Q2 2011, bringing the
total for the first half of the year to EUR 0.9 billion, up 40%
on the volume of H1 2010. Prime office yields (6/9 year
leases) remained stable at 6.0% for CBD after having
experienced a compression during H2 2010.
The European Union is expected to finalize a large transaction
soon, although uncertainty should continue to characterize
the market as the lack of government deals affect the large
public sector within Brussels. However, other business
sectors are still active and therefore market sentiment should
slowly improve in the remainder of the year.
Investor confidence and competition for large, prime quality
spaces should also continue to increase. Therefore, yields
should hold firm in prime locations, although the peripheral
submarkets may see further softening. Rental values should
largely remain stable, although certain submarkets could see
further downward pressure over the remainder of the year.
Recently, with the downfall of the stock national and
international markets, private investors have shown an
increased activity in the real estate investment market. They
mainly seek investments with low risk and low management
activity such as residential investments or retail investments
(high-street retail or retail warehousing).
Brussels At A Glance
conversion 0.72 eur = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
EUR 240.00 EUR 265.00 $ 30.97 $ 34.19 8.00%
Class A (Prime)
Class B (Secondary)
suburban offIce
EUR
EUR
195.00 EUR 240.00
160.00 EUR 195.00
$
$
25.16
20.64
$ 30.97 11.00%
$ 25.16 15.00%
New Construction (AAA)
EUR 175.00 EUR 195.00 $ 22.58 $ 25.16 8.00%
Class A (Prime)
Class B (Secondary)
IndustrIal
EUR
EUR
155.00 EUR 175.00
120.00 EUR 155.00
$
$
20.00
15.48
$ 22.58 11.00%
$ 20.00 20.00%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
EUR
EUR
EUR
40.00 EUR
44.00 EUR
50.00 EUR
46.00
52.00
60.00
$
$
$
5.16
5.68
6.45
$
$
$
5.94
6.71
7.74
N/A
N/A
N/A
City Center
EUR 1,250.00 EUR 1,650.00 $ 161.29 $ 212.90 N/A
Neighborhood Service Centers EUR 120.00 EUR 170.00 $ 15.48 $ 21.94 N/A
Community Power Center (Big Box)
N/A N/A N/A N/A N/A
Regional Shopping Centers/Malls EUR 1,250.00 EUR 1,650.00 $ 161.29 $ 212.90 N/A
Solus Food Stores
N/A N/A N/A N/A N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
1.7%
$469.13
$43,116.07
1.9%
8.5%
1.0%
10.881
EUR 1,500.00 EUR 2,500.00 $ 8,430,963.90 $ 14,051,606.49
EUR 500.00 EUR 1,000.00 $ 2,810,321.30 $ 5,620,642.60
EUR 100.00 EUR 150.00 $ 562,064.26 $ 843,096.39
EUR 200.00 EUR 350.00 $ 1,124,128.52 $ 1,967,224.91
EUR 250.00 EUR 750.00 $ 1,405,160.65 $ 4,215,481.95
EUR 500.00 EUR 1,000.00 $ 2,810,321.30 $ 5,620,642.60
2010 Global Market Report n www.naiglobal.com 50