globe retail outlook data


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In Estonia shopping centres are more common as retail destinations than high street shops. This is mainly the result of low population density, city planning decisions and often inhospitable climate. Since independence, international brands have been slowly entering Tallinn market. However they have done so mainly through franchises or department store concessions. In recent years, some large international brands have also been establishing direct subsidiaries in Estonia, these include, H&M, Marks&Spencer, Takko Fashion, Debenhams, River Island, Massimo Dutti, Sportsdirect.

The strong and continuous growth of retail sales has positively influenced the commercial real estate market which is expressed in higher demand for retail space and reduced vacancies of higher quality premises. However, shopping centres with a less favourable location and/or planning struggle with vacancy rates higher than average. In Tallinn prime shopping rents in Q1 2017 have  have decreased by 1-2% year-on-year and this tendency may continue during 2017.

At the beginning of 2017 the total leasable traditional shopping centre area (for shopping centres above 10,000 sq m of GLA) in Estonia amounts to 740,000 sq m or 560 sq m per '000 capita, by far the highest among CEE countries.

Tallinn remains in the driving seat in terms of new retail space deliveries set for the next two years. If all of the announced pipeline is realized in the coming years or not transformed into usage other than retail, the following years will be challenging for both the retailers and owners of shopping centres as competition tightens. This will put pressure primarily on the profits of retailers with weaker concepts in less attractive locations. It is likely that the rent increase will remain lower than inflation, even at successful centres.

Increasing popularity of e-commerce and the possible market entry of German supermarket chain Lidl would increase competition and put further pressure on retailers profitability.


Our Top Tip For
New Arrivals

Estonians may seem cold and distant at first, but don't take this as rudeness, it's simply the national character. Estonians are loyal and honest once you get to know them. English is widely spoken in Estonia, don't hesitate to make first contact.


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