Expert – Is the Old Town "Making a Comeback"?
The sharp growth in commercial real estate transactions last year and several new projects are a clear sign that the confidence of entrepreneurs in the Tallinn Old Town area, which seemed to be in the shadows due to the coronavirus pandemic, has been restored, confirms Kirill Vigul, CEO of 1Partner Commercial Real Estate.
Commercial properties and non-residential premises in the Old Town were transacted last year for a total of 32.2 million euros, which is nearly five times more compared to 6.6 million euros a year earlier. There were a total of 43 transactions, which is over 50% more compared to 28 transactions in 2020.
"When transaction activity in any sector grows rapidly, it is usually a good sign. Investor confidence and capital, combined with new concepts and business plans, are firmly back in the Old Town," analyzed Kirill Vigul, CEO of 1Partner Commercial Real Estate, and added that, in contrast to the scarcity of foreign tourists, the region benefited well from the near doubling of domestic tourists visiting Tallinn during last summer season.
"By now, conclusions have been drawn from the crisis period. For example, the new restaurants Art Priori and 38 Restoran on Olevimäe are new projects by experienced and successful restaurant owners, which market themselves primarily to the local clientele," explained Kirill Vigul and added that new large-scale investments can also be seen on Rataskaevu Street, located on the other side of the Old Town.
According to Kirill Vigul, immediately after the start of the war in Ukraine, there was some uncertainty about the development of Tallinn's commercial space market, but no specific impact can be observed. "Nevertheless, thousands of new people have arrived in Tallinn due to the war, some of whom are already looking for spaces to open a new café or restaurant. It is understandable that people with the appropriate background and experience want to continue doing in Estonia what they engaged in for a long time in their home country," said Kirill Vigul, who confirmed that 1Partner Commercial Real Estate has been approached repeatedly in the last two weeks by people with such interest.
Vigul considers business development in the Old Town to be an important priority for Tallinn city as well, which offers price discounts on commercial spaces it owns that will continue until the end of April to help entrepreneurs recover better from the difficult pandemic. "Tallinn's Old Town has survived several plagues and, as we can see, it is also surviving the coronavirus pandemic," Vigul concluded the topic on an optimistic note. "It is likely that the Old Town's new rise has begun and the era of bread-and-butter rental agreements will come to an end for now," he added.
