Guido Pärnits: T1 Mall will go bankrupt after all

Guido Pärnits.
Guido Pärnits. Source: ERR

While retail picked up 4 percent in July, autumn might prove more difficult for traders, CEO of the Ülemiste keskus mall Guido Pärnits said. According to Pärnits, the T1 Mall of Tallinn could go bankrupt, while the Porto Franco development can benefit the capital.

Pärnits told ERR on Friday that concerns over the coming fall differ from mall to mall and from one region to the next as the strong stand to become stronger and the weak weaker.

"So we might say it is not really a concern for Ülemiste," Pärnits said.

The CEO added that Ülemiste saw sales revenue grow 20 percent in July.

"August has been leaner so far, but it's not tragic either," Pärnits said. He added that retail will not grow on par with July in August one of the reasons for which is salary support instruments having run their course.

Talking about Ülemiste's struggling competitor the T1 Mall of Tallinn, Pärnits said that Ülemiste is not interested in acquiring it. The CEO also said he does not have any ideas for what to replace it with.

"It is a rather monofunctional development for commerce and entertainment and not easily or effectively converted into something else. I tend to believe it will end in bankruptcy," Pärnits said.

He said that the big wheel on the mall's roof is grand and a good look for Tallinn and it would be good if it remained in use.

Pärnits has more faith in the Porto Franco port area real estate project that recently secured a crisis loan from the government.

"I would say, contrary to many others, that Porto Franco is a good project in the city center port area and something the city would do well to develop as something all modern cities are trying to do," Pärnits said.

Opening up the seafront is extremely important and simply leaving concrete posts there would definitely not be good, he added.

"Secondly, I believe that the multifunctional project could bring life to the area, including beachfront restaurants and would definitely benefit Tallinn."

Pärnits said that while he understands Tallink is more important, it does not make Porto Franco unimportant and that it should be financed, especially since the money in question is borrowed.

"It is a completely normal loan product, except that it's issued in this case by the state (KredEx) and with the money coming from Europe. Looking at European state subsidies, they can be much bigger, so certain opinion leaders in this country seem to be thinking too small," he said.

The CEO remained skeptical in terms of whether Estonia could also build a fancy outlet center following Riga's example. Pärnits finds Estonia too small for something like that to work. "I'm afraid it would simply remain empty," he said.


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Editor: Marcus Turovski

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