Russian businessman buys historic manor house in Saaremaa

The new owner of the Tõlluste manor house located in Saaremaa is the Estonian subsidiary of Natura Siberica, a Russian-owned natural cosmetics brands, writes Meie Maa.

Businessman Toomas Leis sold the manor house to Russians at the start of August and the property should change hands within this month.

The parties have not disclosed the price, but in the spring Leis was selling the manor house complex for 575,000 euros.

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Businessman Toomas Leis bought the manor in 2007

The construction price index continued to fall in 2Q

According to Statistics Estonia, the percentage change of the construction price index in the 2nd quarter of 2014 was –0.7% compared to the 1st quarter of 2014 and 0.8% compared to the 2nd quarter of 2013.

After three years of growth, the construction price index took a downturn in the 1st quarter of 2014 (compared to the previous quarter). This downtrend continued in the 2nd quarter.

In the 2nd quarter, compared to the same quarter of the previous year, the construction price index was primarily influenced by rising labour costs, which accounted for more than three quarters of the total increase of the index.

Compared to the previous quarter, costs of building materials decreased by 1.7%, while the costs of building machines increased by 3.0% and labour costs rose by 0.7%.

In the 2nd quarter of 2014, the percentage change of the repair and reconstruction work price index was –0.6% compared to the 1st quarter of 2014 and 0.7% compared to the 2nd quarter of 2013.

The calculation of the construction price index covers four groups of buildings: detached houses, blocks of flats, industrial buildings and office buildings. The repair and reconstruction work price index covers office buildings. The construction price index expresses the change in the expenditures on construction taking into consideration the price changes of three basic inputs: labour force, building materials and building machines.

Change in the construction price index, 2nd quarter 2014
1st quarter 2014 –
2nd quarter 2014, %
2nd quarter 2013 –
2nd quarter 2014, %
TOTAL -0.7 0.8
labour force 0.7 2.5
building machines 3.0 3.5
building materials -1.7 -0.4
Index of detached houses -0.5 0.2
Index of blocks of flats -1.0 0.6
Index of industrial buildings -0.2 1.2
Index of office buildings -0.9 0.8
Change in the repair and reconstruction work price index, 2nd quarter 2014
1st quarter 2014 –
2nd quarter 2014, %
2nd quarter 2013 –
2nd quarter 2014, %
TOTAL -0.6 0.7
labour force 0.6 2.5
building machines 2.3 5.2
building materials -1.5 -0.5

 

Source: Statistics Estonia

Kernu manor becomes a business center

Kernu manor, about 40 kilometers from Tallinn, is getting a major overhaul and will open as a business center with a small private airport.

Kernu municipality council member Hannes Orgse said on Kernu’s homepage that the current manor building will be revamped in order to be better suited for seminars, and office and accommodation rooms. A nearby plot is envisioned to be a small airport with all necessary buildings including hangars and maintenance workshops.

The 60.8 hectare complex was purchased by Evore from AS Hoolekandeteenus in 2012, which operated a nursing home there, for 350,000 euros. Evore is owned by businessman Viktor Siilats, Äripäev reported.

The local government is backing the project, saying the new manor complex will create jobs and help make the region more attractive.

Source: ERR News

Pictures – http://kinnisvara.hoolekanne.ee/et/pildigalerii-0

The dwelling price index increased in the 1st Q

According to Statistics Estonia, in the 1st quarter of 2014, the Dwelling Price Index changed by 4.8% compared to the 4th quarter of 2013 and by 17.5% compared to the 1st quarter of the previous year.

Compared to the previous quarter, the prices of apartments increased by 6.8% and the prices of houses decreased by 0.1%.

Compared to the 1st quarter of 2013, the prices of apartments have increased by 20.5% and the prices of houses by 9.9%. The prices of apartments increased in all three areas under observation: by 21.5% in Tallinn, by 21.1% in areas bordering Tallinn with Tartu and Pärnu cities and by 13.2% in the rest of Estonia.

Compared to the 4th quarter of the previous year, the price index of apartments increased by 5.9% in Tallinn, by 5.6% in areas bordering Tallinn with Tartu and Pärnu cities and by 13.9% in the rest of Estonia.
The Dwelling Price Index expresses the changes in the square metre prices of dwellings purchased by households. The Dwelling Price Indices have been compiled for apartments and houses (including detached, semi-detached and terraced houses).

The Dwelling Price Index is published on the base 2010 = 100. The time series start from the 1st quarter of 2005. The annual index is calculated as the average of four quarters.Dwelling Price Index, 1st quarter 2005 – 1st quarter 2014 (2010 = 100)

Diagram: Dwelling Price Index, 1st quarter 2005 – 1st quarter 2014 (2010 = 100)

Source: Statistics Estonia

Tallinn – fastest growing property prices in the world

According to Global Property Guide, property prices in Tallinn in the first quarter grew in average 20%, which is only second to Dubai (32%) in a survey covering property markets of 45 countries.

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Estonia’s construction sector feeling gloomy

Construction volumes will decrease in 2014
In 2014, construction volumes are expected to fall in Estonia. Current order books are below average, and employment in the sector is expected to decline. Residential construction will continue increasing at recent volumes, whereas non-residential construction and civil engineering works will decline. An increased supply of new or recently renovated apartments will, it is hoped, cool down the prices of real estate. 

Construction prices will stay at around last year’s level
Lower construction volumes and intensified competition will put pressure on construction prices. Maintaining last year’s profitability will be difficult in 2014. Mostly due to a fast increase in wages, construction prices are already above their pre-crisis peak in Estonia. 

Estonia has done better than its neighbours
Construction volumes and prices have increased more in Estonia than in other Baltic or Nordic countries since the last slump in 2009-2010. Public sector orders supported larger construction volumes in Estonia in 2011-2012. In 2013 and 2014, the share of the private sector in enterprises’ order books has increased, while the volume of public procurement projects has declined, mostly due to a gap between the two EU funding periods.

Source: Swedbank

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Owners of Tallink to develop a shopping centre

Finally, after eight years the Tallinn City Government has decided to give its approval for owners of Tallink ferry group to start developing a shopping and entertainment complex in Lasnamäe, writes Äripäev.

The complex, code-named Tallink City, will be developed by Inf Maja that belongs to Enn Pant, Ain Hanschmidt and Kalev Järvelill, large shareholders of Tallink.

The development could cost around 100 million euros.

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Foreign investors interested in former prison

The Patarei sea fortress and prison, which has been mostly abandoned since 2002, when the prison was shut down, has attracted interest from a number of foreign investors.

State Real Estate, which owns the 4-hectare seaside property, said it will wait for the approval of a detailed plan.

The state attempted to sell the property with a initial price of 3 million euros two years ago, but received no bids.

Read more from ERR

Construction volumes decreased in Q1

According to Statistics Estonia, in the 1st quarter of 2014 compared to the same quarter of the previous year, the total production of Estonian construction enterprises in Estonia and foreign countries decreased 3%. In Estonia construction activities decreased 2%, and the construction volumes of Estonian enterprises in foreign countries decreased by nearly a fifth.

In the 1st quarter of 2014, the production value of construction enterprises amounted to 376 million euros, of which the production value of building construction was 254 million euros and the production of civil engineering totalled 122 million euros. Compared to the 1st quarter of 2013, the volume of building construction in real terms increased 4% and the volume of civil engineering decreased 15%.

The upturn in new building construction on the domestic construction market, which started last year, continued the growth trend at the beginning of this year. The repair and reconstruction work in building construction stayed on the level of the previous year. The construction of civil engineering objects, which supported the construction market positively for nearly three years, has decreased for two quarters in a row and caused a downturn in the whole construction market.

The construction volume of Estonian construction enterprises in foreign countries continued to decrease – there was a decrease in the construction of buildings as well as in civil engineering. Construction volumes in foreign countries accounted for 10% of the total volume of construction in the 1st quarter of 2014 (this share was 12% in the 1st quarter of 2013).

According to the data of the Register of Construction Works, in the 1st quarter of 2014, the number of dwelling completions was 748, i.e. 323 dwellings more than in the same period of 2013. About three quarters of completed dwellings were situated in blocks of flats. The majority of completed dwellings were situated in Tallinn.

There is still a demand for new dwellings with a good location and high quality. In the 1st quarter of 2014, building permits were granted for the construction of 667 dwellings, which is about a tenth more than in the 1st quarter a year ago. The most popular type of building was block of flats.

In the 1st quarter of 2014, the number of completed non-residential buildings was 187 with a useful floor area of 157,700 square metres – this was primarily made up of new storage, office and agricultural premises.

Construction volume index, 1st quarter 2003 – 1st quarter 2014
(average of quarters of 2010 = 100)

Diagram: Construction volume index, 1st quarter 2003 – 1st quarter 2014

 

Source: Statistics Estonia

Two real estate developers imprisoned

In 2006, one of Estonia’s largest banks SEB lent almost 3 million euros to two Estonian real estate developers who promised to build an office building and parking lot in central Tallinn, but actually invested it in real estate in Spanish Costa del Sol, writes Äripäev.

The real estate businessmen in question were 42-year-old Kaido Kaljusaar and 41-year-old Andres Lauri. To be more believable for banks, they set up a company called Arco Kapital which sounded similar to the listed real estate developer Arco Vara.

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