Finnish investors want to buy thousands of apartments in Tallinn (3)
Finnish property fund Asuntosalkku has announced its plan to buy thousands of apartments in Tallinn's more prestigious areas to rent them out.
So far, the fund has bought 50 apartments in Tallinn, Postimees reported. "We plan to purchase thousands more over the coming years," said Timo Metsola, managing director and majority owner of Finnish rental apartment brokerage and real estate investment service Vuokraturva.
According to him, the investors are mostly interested in the apartments near the Old Town, in the city center, and Kalamaja, Pelgulinn and Kadriorg regions.
The CEO of Asuntosalkku's Estonian division Jaakoo Sinnemaa said that they hope to make an annual profit of 6 percent - 2 percent more than what they currently earn from their 800-apartment portfolio in Helsinki.
However, Postimees also reported that local real estate experts remain cautious, saying that such plans are rather common, but have so far failed to materialize due to low profits involved.
Tarmo Kase, CEO of real estate advisers Ober-Haus said that the high volume of new apartments in the rental market would lower the prices to an unprofitable level.
Real estate analyst Tõnu Toompark added that the plan involves several risks, most importantly the state's housing project, a plan to subsidize the construction of new rentals. "If that happens, the private sector can simply back up and leave. It's unable to fight political decisions."