Euro Could Bring Major Retailers to the Baltics
The introduction of the euro to Estonia in January may help lure international retailers such as IKEA and H&M to the Baltics, according to participants in an international real estate conference that took place in Riga last week.
The main discussion topic of the "Retail Real Estate in the Baltic Countries" conference, which was organized by the International Council of Shopping Centers, was the prospect of having large international retail brands set up shop in the region, reported Biznes & Baltia.
Despite having an abundance of retail space, Latvia, Lithuania and Estonia are still characterized by a limited range of consumer goods in comparison with their Scandinavian neighbors. A number of international chains found elsewhere in Europe have been as yet reluctant to stake their claim in the Baltics.
Though part of the reason is the small size of the markets, a major factor is also the attitude of investors towards the region, which could be helped by Estonia's entry into the Eurozone, conference participants said.
"I regularly meet with investors from the Scandinavian countries and every time, with great difficulty, I have to explain to them what we were doing here," said Petri Olkinuora, CEO of Citycon, a property investment company that specializes in retail space in Finland, Sweden and the Baltics. "They don't understand what's happening in the Baltics and why we're here to invest. All they read about in the newspapers is the high unemployment and low consumer confidence. The information on the high rates of return on investments doesn't make an impression."
The participants said that Estonia's euro adoption could help change those perceptions.
"This will be an important argument in favor of macroeconomic stability," said Jerry Wirth, a partner in the American company RB Management, which manages ten shopping centers in Latvia. In his view, the Baltic economies set themselves apart by a high degree of openness, so the influx of investment money can be very rapid, as can its flight when problems arise.