Bonava Entered the Rental Property Market and Opened Its First Rental Housing Complex in Mustamäe

One of the largest residential real estate developers in Estonia has expanded its portfolio beyond sales apartments by adding 99 brand new rental apartments. In Tallinn, at the address Aiandi 11, Bonava has completed a complex consisting of three buildings that were built specifically for rental housing.

Bonava's CEO Taavi Soorm said that the demand for new rental apartments is still high in Tallinn. "In today's market situation, where euribor is only beginning to decline slowly, renting an apartment is a good alternative for those who don't want to take on a home loan for several decades," noted Soorm and added that regardless of whether a person has decided to buy or rent a home, their actual expectations for a home – quality, floor layout, neighborhood, accessibility – are exactly the same.

Soorm highlighted as an advantage of renting from a major developer that Bonava's rental building is covered by a construction warranty and defects are eliminated on exactly the same basis and principles as their development apartments built for sale. "Compared to renting from a private individual, renting from a business entity allows you to expect stability and professionalism if any problems arise with the rental apartment. This gives the tenant greater peace of mind that the road in front of the building is always cleared of snow, the stairwell is cleaned, and technical systems are maintained and functioning without problems," said Soorm.

At the opening of Bonava's rental building, real estate analyst Tõnu Toompark provided an overview of the current state of the rental real estate market and noted that renting an apartment is currently extremely affordable. "The average rental apartment price as a percentage of the average salary is today more favorable than the monthly mortgage payment for buying an equivalent home," explained Toompark.

"Currently, the rental market is very fragmented and mostly in the hands of small investors. However, today's economy shows that people are staying in the rental market for increasingly longer periods and the demand for rental apartments is therefore growing," noted Tõnu Toompark. The real estate analyst is confident that the entry of larger rental providers into the market is an important sign that society is undergoing changes where home ownership is no longer an end in itself. "In ten years' time, definitely more people will be living in rental apartments than today."

Mustamäe district was one of the first in Tallinn where modern apartment buildings began to be built in the 1960s. By today, many of these buildings have undergone proper renovation, but some buildings still need urgent attention. "Bonava's concept and direction toward young families is very welcome, as Mustamäe has 15,000 young people aged 25-39 who need modern living spaces," said Mustamäe district elder Aivar Riisalu.

Bonava's recently officially opened rental building in the Uus-Mustamäe residential area welcomes new residents starting Friday, December 15, when the first tenants begin moving in. In total, Bonava has already built a complete residential area with nearly 700 apartments on the former Kadaka aida lands, complete with multiple playgrounds, a community garden, and a public park. In the new year, the Aiandi 14 apartment building will be completed during the next phase of development, and several more buildings are awaiting construction.