Tallinn Real Estate Investors Looking More Toward Tartu
Estonia's largest rental apartment developer Scandium Kinnisvara's sales statistics show that residents of the capital are overrepresented among investors in Tartu rental real estate. The share of local Tartu investors makes up one third.
Overview of What's Happening in Tartu
Scandium Kinnisvara has sold over 40 small apartments in Tartu over the last 6 months. 90% of buyers plan to rent out their apartments upon completion, meaning they are rental investors. Of the investors, 60% are from Tallinn, outnumbering local investors by about twenty percent.
Maia Lõško, Sales Director at Scandium Kinnisvara: "Our experience shows that Tallinn investors are looking for ways to diversify their real estate portfolios, and moving to a new city is a logical step in that direction. Tartu is Estonia's second most active rental market after Tallinn, where demand for quality rental apartments significantly exceeds supply. The large number of students and IT specialists ensures a constant need for rental space, and requirements for apartment quality have risen notably over the past couple of years."
While local investors tend to look at apartments one at a time, investors from other cities prefer to purchase 2-3 apartments at once in the same building, so that expanding their portfolio has a greater effect.
Maia Lõško: "Many investors in Tartu real estate also consider short-term rental through Airbnb and Booking as an option. Today, Tartu's Airbnb market is still in its infancy and there is a lack of quality apartments in good locations that are tastefully furnished. From an investor's perspective, short-term rental allows for generating better returns. A reliable property management service provider plays an important role here, one that would take care of daily operations and apartment furnishing so that the investment would be as passive as possible for a 'foreign investor.'"
Apartment purchase statistics also show that the share of loans is declining and increasingly more investment is made with equity capital.
Scandium Kinnisvara is Estonia's largest real estate company specializing in the development of smart rental apartments and rental buildings with additional amenities. The focus of the projects is on implementing new technologies to ensure easy management for investors, increasing returns over time, and providing residents with sustainable and comfortable homes.
In Tartu, Scandium Kinnisvara is developing DUO Lofts with lofts and small apartments, which will be completed by the end of 2020. 40% of the building has been sold. www.duoloftid.ee
