Baltic property markets could outperform the UK and Europe by more than 15% over the next two years,...
Baltic property markets could outperform the UK and Europe by more than 15% over the next two years, according to Stellar Asset Management.
Chief executive Jonathan Gain said more bullish predictions put potential growth as high as 30% but the group feels 15% is a comfortable estimate.
The specialist asset manager, which has a Baltic property offering, said Lithuania, Latvia and Estonia are currently achieving some of the highest GDP growth rates in Europe.
Demand for office space in the region is driven by the burgeoning financial, banking and IT sectors, with restricted supply and currently no available space in Tallin's central business district for example.
Stellar said prime office rents are at a sustainable high, as new supply is unable to keep up with increasing demand.
The highest rents are currently in Riga, which is expected to grow to overtake Tallin as the pre-eminent shopping destination in the Baltic region.
Since joining the EU in May 2004, the three countries have become Europe's fastest growing economies, according to Gain.
He said the planned adoption of the euro is expected to attract further cross-border investment opportunities, higher transparency and lower currency risk.
Gain said: "The point to make here is that this is very much an infant market.
"According to IPD figures for last year, the UK property market was down around 16% - it will not be that bad looking forward, but it will be flat at best for the next two years.
"The thing about the Baltic States is that the opportunities for debt refinancing and finding capital are significantly more optimistic than in the UK and Europe.
"Their backing comes from Swedish banks, which have lower exposure to the factors behind the credit crunch, compared to the UK and US banks."
