Finding buyer for Old Town property remains difficult
Tallinn's Old Town real estate prices have been stable for a year, but commercial and residential space remains tricky to sell. Entrepreneurs must choose a business with much care, while tenants prefer refurbished, comfortable apartments.
The apartment building on Suur-Karja tänav in Tallinn's Old Town is an exception, renovated completely from the ground up. Modern heating and plumbing systems are rare in Old Town apartments. This adds to the price of apartments, despite the low demand.
"Real estate prices are higher here because there's not much available for sale, and no new development. And, it's UNESCO. The apartments themselves are spacious, especially in the old town, so the cost is higher. The reason there are fewer transactions, however, is that we have a small number of clients with the ability to buy," LVM Real Estate broker Ilmar Tedremaa said.
Real estate analyst Risto Vähi said there is no limit to what is affordable in the Old Town, but in general the area demands higher prices. Attracting new residents is difficult because of the sometimes stubborn protection of historic buildings and poor infrastructure – streets are narrow, parking is difficult and grocery stores are scarce. The need to repair buildings can drive up utility costs.
"Businesses that are important to the local people are gone. Offices are gone, all kinds of shops are gone. There are a couple of grocery stores, but that may be all that's left. The local feel and touch needs to be brought back," he said.
Commercial space is more expensive than apartments. There are currently about 12 whole houses for sale, a high number for the old town.
"There are very few transactions with them, maybe one or two a year or so," Tedremaa said.
"For example, if you're selling a building that's a hotel or a restaurant, the sales process can be very, very long because neither sector is doing well," Vähi said.
Of the real estate owned by the City of Tallinn, 20 business premises in the city center are currently up for auction.
"The properties we own downtown are different, in different locations. The interest is also different in some ways. There are some spaces that go like hot cakes, and there are others that take longer to find a tenant," said Sander Andla, governor for the districts of Kesklinn (city center).
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Editor: Marko Tooming, Kristina Kersa
