Ober-Haus has been voted the strongest brokerage company in the Baltic countries in the annual awards of the European real estate company brands.
The European Real Estate Brand Institute selects the strongest European real estate company brands every year. Set in Berlin, this year, the Institute selected and evaluated over 1,400 different RE trademarks throughout Europe. The Ober-Haus brand took first place in the category of RE brokerage in the entire Baltic region.
More than 109,000 business experts from 45 European countries voted on and assessed trademarks in the survey which was organised for the 12th time. Architects, analysts and valuers, property managers, representatives of commercial banks and other credit institutions, brokers, builders, developers, investors and lawyers all voted. Final evaluations were aggregated following analysis of the company position in the market, image of the employer, resistance and sustainability of the brand, communication, etc.
Ober-Haus, the real estate services company in the Baltic countries, has been acquired by Kiinteistömaailma, a Finnish real estate company. Since 2007, Ober-Haus has been part of Realia Group, a leader in the Finnish real estate market. Following the change in company ownership, Tarmo Kase, general manager of Ober-Haus, and the remaining leadership of the company will continue their functions in the company.
Kiinteistömaailma seeks to expand operations and grow internationally. Ober-Haus is the main player in the Baltic real estate market and this leader position is the result of the targeted approach taken by the previous owners. Ober-Haus will complement the Kiinteistömaailma Group with its high quality knowledge-based real estate brokerage and valuation services,” Risto Kyhälä, general manager of Kiinteistömaailma, added.
“The deal with Realia Group is part of a strategy to focus on business development in the countries of Northern Europe by making use of the available strong market position in Finland. I am delighted that we have found good owners for Ober-Haus who will continue to strengthen corporate operations in the Baltic countries. I would also like to thank Tarmo Kase, general manager of Ober-Haus, for his contribution to the long-term development of the company,” Kari Virta, general manager of Realia Group, said.
Ober-Haus provides a wide range of real estate services in Lithuania and the Baltic region. The company opened its first office in Tallinn in 1994. Today Ober-Haus has 19 representative offices in the main cities of Lithuania, Latvia and Estonia with over 220 employees.
Realia Group is the biggest real estate group of companies in the Nordic countries. Realia Group owns Realia Isännöinti, Realia Management, Huoneistokeskus, Huom! Huoneistomarkkinointi in Finland, and Hestia – in Sweden. The Realia Group has over 1,800 experts; its annual turnover amounts to EUR 130 million.
Set up in 1990 Kiinteistömaailm is the broadest network of Finnish real estate agencies with almost 100 offices. The company offers consultancy and brokerage services in the residential housing and commercial real estate segments. Presently Kiinteistömaailma has more than 600 real estate experts. General turnover of the offices stands at EUR 70 million annually.
Real estate markets of the Baltics withstood the challenges of the pandemic, but became imbalanced
Looking back at 2020, we can see that both the global and the Baltic real estate markets largely withstood the challenges posed by the current pandemic. Cheap cash injections activated on a global scale were also directed at the real estate market, where the residential property remained at the forefront with record-breaking indicators at the end of 2020 and the beginning of 2021. Looking at the global map, we can see that the home prices have been given green light as we observe faster price increase in the USA, China and Europe, including the Baltic countries.
However, the current situation can hardly make us happy. The global health crisis has not only claimed human lives, but has also unbalanced the business environment, including the real estate market. If some business sectors have recovered quickly, the prospects of other sectors remain vague. The same can be said about real estate whose prospects are directly related to the viability of specific business sectors. So far, we can see what difficult situation the managers and owners of hotels, major shopping centres or individual commercial premises face. A notable increase in home prices may also offset the relatively sustainable development (before the pandemic) of this real estate sector. These insights have just been published in the latest annual review of the real estate market of the capital cities of the Baltic countries by Ober-Haus. The review provides a comprehensive picture of the situation in the real estate market for 2020 and forecasts for the coming year.
The slow-down of development may unbalance the housing market of the capital cities of the Baltic countries
In any case, the housing market of the Baltics “benefited” most from the pandemic period in 2020. “First of all, the housing sector in Lithuania and Estonia performed strongly and witnessed all-time records – the amount of money spent on housing (apartments and houses) in a year was the highest in the history of these countries,” Raimondas Reginis, Research Manager for the Baltics at Ober-Haus, said.
ODRA RESIDENTIAL PROJECT IN TALLINN
Despite that the number of sales transactions of apartments in the capital cities of the Baltic countries decreased from 4% to 10% in 2020, this did not have a negative impact on the sales prices of apartments. According to Ober-Haus, the sales prices of apartments in Vilnius and Tallinn continued to grow and increased by almost 5% in a year. Meanwhile in Riga, only symbolic decrease in the prices of older apartments in residential districts was noted.
Some greater negative changes were recorded in the housing rental segment of the capital cities, which in H1 2020 experienced an instantaneous increase in supply. “This led to a decrease in rents by a tenth in Riga and Tallinn over a year. Meanwhile, in Vilnius, rents for apartments slightly decreased in the middle of the year, but returned to the former level in H2 2020, which shows a strong internal demand in this fast-growing city,” Reginis said.
However, Riga’s performance seems to be the weakest among the capitals of the Baltic countries. It is affected by further deteriorating demographic indicators and the lack of confidence among the real estate market players with the lowest relative number of apartment transactions and new apartments built out of the three capitals. On the other hand, the indicators at the beginning of 2021 show that the situation in the housing markets of Vilnius and Tallinn has gained further optimism, which may lead to at least a momentary shortage of supply and greater home price increases. For example, in 2021, developers plan to build fewer apartments in all the capitals of the Baltic countries than they built in 2020. “In the meantime, Riga may benefit from a positive global mood in the housing sector by offering a significantly lower level of residential property prices and relatively faster potential for market growth and investment opportunities in the future than perhaps Vilnius or Tallinn,” Reginis noted.
Most severe disruption in the hotel sector due to the pandemic
In terms of the commercial real estate and the most affected segments by the pandemic, the advantage of the Baltic countries has been their little dependence on foreign tourism, which accounts for a relatively small part of the economy.
The hotels oriented to foreign tourists have suffered most during the pandemic across the globe, including in the Baltic countries. For example, the occupancy rates of the hotels of international hotel chains in Lithuania, Latvia and Estonia contracted almost threefold in 2020 compared to 2019. As a result, this business and the real estate segment experienced the steepest decline in 2020 and continues to stagnate under the current pandemic in 2021.
“It is not surprising that in 2020–2021 we saw the sale of some hotel buildings to new investors who are planning to adapt the buildings for different business activities, for example, housing for long-term or short-term rent,” Reginis pointed out.
Rental income of retail premises – from a double-digit decline to inflation rate size growth
RAIMONDAS REGINIS, RESEARCH MANAGER
FOR THE BALTICS AT OBER-HAUS
The retail premises sector is also among the most affected real estate segments in the Baltic countries. Full or partial closure of retail outlets had a significant impact on the turnover of the major shopping centres, which resulted in significantly lower rental income for property owners in 2020.
“Depending on the shopping centre tenant mix structure, changes in occupancy and rent discounts granted to tenants, the operating income of companies managing such properties has shrunk from a few percent to a few dozen percent. We can imagine the situation in which the tenants and owners of individual commercial premises found themselves, where shops, cafes or bars could not carry out their activities or had a very small customer flow,” Reginis said.
However, not all businesses in the retail premises sector suffered losses in 2020. Supermarkets with large grocery store chains enjoyed a continuous flow of shoppers and the owners of such supermarkets were guaranteed even higher rental income than in 2019. Like in previous years, rents in such supermarkets were increased by landlords based on the inflation rate of the previous year.
Ample opportunities to office tenants in the face of the pandemic
The office sector also experienced significant changes in 2020. Although the offices were physically empty following the change in the work format, the companies did not start terminating tenancy contracts and managers of office buildings were able to maintain a stable flow of rental income.
However, in 2020 the markets of capital cities in the Baltics saw a significant increase in office supply, which coincided with the pandemic period. This raises legitimate concerns of market players regarding the sustainable development and prospects of this real estate segment in the near future. According to Ober-Haus, in 2020 developers built 186,100 sqm of office space in Vilnius, Riga and Tallinn, or 30% more than in 2019 (in Vilnius – 102,600 sqm, in Riga – 49,500 sqm, and in Tallinn – 34,000 sqm).
A significant proportion of the companies’ employees are currently fully or partly working from home, and the ongoing pandemic prevents companies from accurately assessing their needs for office space in the future. According to Reginis, under these uncertain conditions it is still difficult to assess the direction that the post-pandemic business model will take, on which the demand for office space will depend in the future.
“Looking at the current market, a significant number of companies are still delaying strategic decisions regarding further development of offices or optimization of the available space. However, regular offers of office sublease that appear on the market, where tenants are looking for sub-tenants for their rented premises, indicate that some companies have decided to reduce their office space without any delay,” the Ober-Haus representative said.
LVOVO OFFICE PROJECT IN VILNIUS
If there is still uncertainty about the future demand for offices, the supply factor is more predictable in the capital city of Lithuania. In 2020, the market in Vilnius saw a record supply of office space, which was successfully absorbed by the market and the office vacancy rate in Vilnius in 2020 increased relatively moderately – from 3.0% to 6.1%.
However, developers may expect greater challenges with further increase in office space in the market, which in 2021 will be at least 130,000 sqm. According to Reginis, such significant amount of office space in the context of the pandemic may pose challenges not only for the developers of the new projects but also for the owners of older buildings.
The risk of company office space optimization may only be compensated by newly arriving companies or expansion of already operating businesses in the capital cities of the Baltic countries. Yet the increasing vacancy rate in all capital cities of the Baltic countries shows that the new supply of offices comes under particularly unfavourable circumstances and tenants of the offices may be the ones to benefit from it.
Riga was the leader in warehouse development; developers in Vilnius embarked on the multi-functional projects
The industrial real estate sector in the Baltic countries had all the preconditions for further growth in 2020. According to Ober-Haus, 208,000 sqm of new warehouse space was built in Vilnius, Riga, Tallinn and their surroundings during the year, which is 46% more than in 2019.
RIMI LOGISTIC CENTRE, RIGA
In 2020, the largest number of new warehouse space was built in Riga, including the development of the largest logistics centre in the Baltic countries. The Rimi warehousing and distribution centre was built by renovating some old space and adding some new buildings. The total area of the complex is 84,000 sqm, of which 74,000 sqm are dedicated to the production storage.
Meanwhile, in Vilnius, in addition to the relatively active development of traditional warehouses, in 2020 development of stock-office concept projects started. “If such projects have already been implemented in Tallinn for some time and in Riga for at least the past few years, so in Vilnius such first larger-scale projects will only be implemented in 2021,” Reginis noted.
Projects offering spaces of various sizes for various purposes under one roof may attract a much larger number of potential tenants, which allows for more flexible planning of the implementation of such projects. “Currently, near ten projects of this type are planned in Vilnius and construction of some of them is in progress. Rapidly expanding online sales and the need to deliver products to end users quickly or to have a suitable product pick-up point contributes to the development of these projects,” Reginis added.
According to Statistics Lithuania, the turnover of mail order or sale via internet businesses between 2015 and 2019 increased by 28% each year on average, while in 2020 an increase of 52% and the record turnover of EUR 814 million was recorded.
Ober-Haus Real Estate Advisors presents its annual real estate market report 2017 on the Baltic States Capitals – Vilnius, Riga and Tallinn. The overview focuses on the office, commercial, storage and residential premises markets, as well as on land plots of each of the capital cities. The overview also includes information related to taxes, which was drawn up by PricewaterhouseCoopers – the audit, accounting and consulting company, while the part with legal information was prepared by the Sorainen law firm.
(press release 08.03.2017)
Realia Group strengthens its international business by acquiring Swedish real estate management services company Hestia
Realia Group, the largest service provider in real estate management and brokerage services in the Nordic countries has acquired the Swedish real estate management services company Hestia. The acquisition is part of Realia Group’s growth strategy and supports Realia Group’s plan to expand its international real estate management services to other Nordic countries.
Hestia, founded in 2007, operates in Sweden, Norway and Finland providing services in property management and corporate real estate management serving property investors, user-owners and tenants. The core of the company is strong expertise, personal service, and an emphasis on customer experience. Hestia employs approximately 170 people in 30 localities.
”Realia Group has a strong growth strategy and the acquisition supports in an excellent way our plan to expand our real estate management services in the Nordics. For Realia Group, 2016 was a year of rapid growth and I am confident that the acquisition strengthens our competitiveness as a provider of real estate management services,” says Matti Bergendahl, CEO of Realia Group.
”Expanding our business after Finland and the Baltic countries to the other Nordic countries, and especially to Sweden is and a significant step that makes Realia Group a strong partner for our clients in the Nordic area. We are very happy that Hestia, a company with excellent services and good reputation, is joining forces with Realia Group, continues Bergendahl.
I am really pleased that we are joining forces with Realia Group. We will now have an access to new markets and at the same time we can continue as the flexible and customer centric partner for our existing customers. We become a much stronger service provider for customers that operate on the Nordic and Baltic markets,” says Gunnar Isaksson, CEO of Hestia.
Hestia will operate as Realia Group’s Swedish subsidiary and continue its operations as before. All services for Hestia’s customers will continue as before and be further strengthened in the future.
For further information, please contact:
Realia Group Oy, Matti Bergendahl, CEO, +358 40 833 5461
Hestia Fastighetsförvaltning AB, Gunnar Isaksson, CEO, +46 (0)73 357 26 26
Realia Group
Realia Group is the biggest service provider in real estate management and real estate brokerage services in Nordic and Baltic countries. Realia Group consists of Huoneistokeskus, SKV Kiinteistönvälitys, Huom! Huoneistomarkkinointi, Realia Isännöinti, and Realia Management in Finland, and Ober-Haus in Baltic countries. Annual revenues of Realia Group is approximately 100M€, and the Group employs some 1,900 persons. www.realiagroup.fi
Hestia
Hestia, founded in 2007, is the first real estate management company in Sweden to combine competence, openness and flexibility.The core of the company is strong expertise, personal service, and an emphasis on customer experience. Hestia employs approximately 170 people in 30 localities.
(Press release: 01.09.2016)
Realia Group strengthens its real estate management services by acquiring Corbel
Realia Group, the largest service provider in real estate management and brokerage services in the Nordic countries has acquired a Finnish real estate management company Corbel. The acquisition is part of Realia Group’s growth strategy and supports Realia Group’s plan to expand its real estate management services and to work as a pioneer in real estate management and real estate brokerage services. The Nordic private equity fund Valedo Partners Fund I AB has sold Corbel Holding Oy to Realia Group. The sale and purchase agreement was signed on August 31, 2016.
Realia Group brings together a broad spectrum of competencies in real estate management and real estate brokerage services in Finland and the Baltic countries. Operations are conducted through the subsidiaries Realia Isännöinti, Realia Management, Huoneistokeskus, Huoneistomarkkinointi, and SKV Kiinteistönvälitys in Finland, and Ober-Haus Real Estate Advisors in Baltic countries.
Corbel, founded in 2008, provides services in property management and corporate real estate management serving both domestic and international property investors, user-owners and tenants in Finland. Service offering includes property management, financial management, professional services as well as property asset management provided on a country-wide basis through 12 offices in major Finnish cities. Corbel employs approximately 190 people in Finland.
”Corbel complements in an excellent way Realia Group’s real estate management business and expertise. The acquisition is part of our growth strategy and supports our plan to expand our real estate management services. I strongly believe that the acquisition strengthens our competitiveness as a provider of real estate management services. I am looking forward to working together with Corbel,” says Matti Bergendahl, CEO of Realia Group.
”Under ownership of Valedo, Corbel has been developed since 2011, and the company has very well strengthened in all business areas. We are very happy that Corbel now joins forces with Realia Group,” says Sampsa Ratia, CEO of Corbel.
For further information, please contact:
Realia Group Oy, Matti Bergendahl, CEO, +358 40 833 5461
Valedo, Hanna Bilir, Brunswick Group, +46 (0)709 16 68 66
Realia Group is the biggest service provider in real estate management and real estate brokerage services in Nordic and Baltic countries. Realia Group consists of Huoneistokeskus, SKV Kiinteistönvälitys, Huom! Huoneistomarkkinointi, Realia Isännöinti, and Realia Management in Finland, and Ober-Haus in Baltic countries. Annual revenues of Realia Group is approximately 100M€, and the Group employs some 1,600 persons. www.realiagroup.fi
Corbel Group is a leading service provider in property management and corporate real estate management services in Finland. The company is serving both domestic and international property investors, user-owners and tenants.Properties the company manage range from large office buildings and shopping centers to residential property. Service offering includes property management, financial management, professional services as well as property asset management provided on a country-wide basis through 12 offices in major Finnish cities. Corbel has approximately 190 employees. www.corbel.fi
(Press release: 02.06.2016)
Realia Group, the largest service provider in real estate management and brokerage services in the Nordic countries, is to be acquired by Altor Fund IV (Altor). The Nordic private equity fund acquires the company from the current majority owners Sponsor Fund III, Nordea, and Varma. The sale and purchase agreement was signed on June 1, 2016.
Realia Group brings together a broad spectrum of competencies in real estate management and real estate brokerage services in Finland and the Baltic countries. Operations are conducted through the subsidiaries Realia Isännöinti, Realia Management, Huoneistokeskus, Huoneistomarkkinointi, and SKV Kiinteistönvälitys in Finland, and Ober-Haus Real Estate Advisors in Baltic countries.
”I am looking forward to working together with the new owner Altor, and I strongly believe that the collaboration will benefit the entire Realia Group and its subsidiaries. We have taken significant steps in developing Realia Group together with Sponsor Capital, Nordea, and Varma over the last years. This development will now be further strengthened as Altor shares our view of how to build high quality real estate management and real estate brokerage services,” says Matti Bergendahl, CEO of Realia Group.
”We have followed the development of Realia Group closely for a long time, and real estate management and real estate brokerage services are in a highly interesting developmental stage in Finland and other Nordic countries. Realia Group has very well-known brands in both real estate management as well as real estate brokerage services in Finland and the Baltic countries. We want to continue developing these services together with the management and personnel of Realia Group towards the Group’s vision: For better living and real estate wealth,” says Risto Siivonen, Partner at Altor.
”We have been building and developing Realia Group and its subsidiaries for a long time, and the Group with all its brands is very close and important to us. We decided this spring that Realia Group should continue its development in the next strategic phase supported by a new owner, and we are delighted that the new owner will be Altor, a company we know well,” says Kaj Hägglund, Managing Partner at Sponsor Capital.
The transaction will require an approval from the Finnish Competition and Consumer Authority, and it is expected to be completed by the end of June. The transaction value will not be disclosed.
For further information, please contact:
Matti Bergendahl, CEO, Realia Group Oy, +358 40 833 5461
Risto Siivonen, Partner, Altor , +358 50 575 7662
Kaj Hägglund, Managing Partner, Sponsor Capital, +358 400 403 046
Realia Group is the biggest service provider in real estate management and real estate brokerage services in Nordic and Baltic countries. Realia Group consists of Huoneistokeskus, SKV Kiinteistönvälitys, Huom! Huoneistomarkkinointi, Realia Isännöinti, and Realia Management in Finland, and Ober-Haus in Baltic countries. Annual revenues of Realia Group is approximately 100M€, and the Group employs some 1,600 persons. www.realiagroup.fi
About Altor
Since inception, the family of Altor funds has raised some EUR 5.8 billion in total commitments. The funds have invested in excess of EUR 3.4 billion in more than 40 companies. The investments have been made in medium sized Nordic companies with the aim to create value through growth initiatives and operational improvements. Among current and past investments are Lindorff, Carnegie, Palodex, Helly Hansen, Dustin, Byggmax and Sats-Elixia. For more information visit www.altor.com.
Sponsor Capital is a Finnish private equity firm founded in 1997. The firm makes mainly majority investments in Finnish mid-sized companies that have an excellent management, stable market position and predictable cash flow. Sponsor Capital operates responsibly and long term as well as in a strongly profit-oriented mode and believing in management’s entrepreneurial spirit. Large Finnish institutions invest their capital through Sponsor Capital.