Endover: Money is falling from the sky in Estonia, but it is not a boom - Endover

Endover: Money is falling from the sky in Estonia, but it is not a boom

September 14th 2021

According to Robert Laud, Member of the Management Board of Endover, real estate prices in Estonia, and especially in Tallinn, are affected by large injections of cash into technology companies and exits from successful companies, because many people benefit from this ecosystem.

‘Recent price increases are only the beginning and if the environment persists, the rise in prices will continue. There is always room for prices to rise, if wages also rise at the same time. Due to the labour shortage and global supply difficulties, construction input prices are becoming more expensive, which in turn is raising real estate prices, which are derivatives of each other.

Robert Laud, CEO of Endover

We forecast that in the near future the prices per square metre of new developments in the most in-demand areas of Tallinn will exceed EUR 7000. Endover’s highest-priced deals thus far have reached the level of EUR 6400 per square metre, our current average is EUR 3500 and the market average is about EUR 2350.

According to the developer, Endover is in the middle of its best year ever in terms of sales. There was clearly a decline last year; however, when looking at the two-year average, the situation is stable. Temporary market fluctuations are not having a significant impact on our company with its long-term experience and strong team, because we manage and control the entire development cycle – from planning to construction and sales – allowing for flexible responses and efficient management. Preparation of the developments underway has gone according to plan and we are engaged in the usual daily work,’ said Laud.

Rocca Tower I

Endover’s business volumes have grown over the years, with the company moving in the direction of large-scale projects. The developer’s portfolio is primarily characterized today by high-rise buildings and quarters. ‘At present, we have seven high-rise buildings on our table, of which the Torn high-rise, in Kristiine, and the Rocca Tower I, in Haabersti, have just been completed; two new high-rise buildings have just been put up for sale in Rocca al Mare, another high-rise building is planned in Haabersti, and two more are planned in North Tallinn. The Volta Quarter is the largest of the quarters, with a total volume of 142,000 m², and we plan to start building new stages there this autumn. The pre-sale of Volta, which began during the summer, was positively received by the market, with demand exceeding the forecast level. North Tallinn continues to be a popular living environment and an attractive investment area,’ said Robert Laud.

Endover will bring more than 400 new apartments and commercial premises to market in the next six months. ‘Although we are best known for the development of residential real estate, we will soon be vigorously entering the commercial real estate market. Work and home or WoHo quarters, which are already popular in other parts of the world, are also popping up on the Estonian real estate landscape.’

Robert Laud, CEO of Endover
Rocca Tower I

According to the developer, the term ‘boom’ is clearly over used in Estonia, and in terms of the economic cycle, we are currently in an active phase. ‘A year ago, the mood was quite different, of course, but lost ground is being reclaimed and the amount of money in the market has increased significantly. With the onset of the corona crisis, everyone down shifted their activities and a global supply problem arose. Things are shifting back into gear, but the supply chain has yet to be detangled. Whoever holds stocks is king and also dictates the price. We will have successfully retreated from such an anomalous situation by the autumn or winter – no one is talking about a price reduction today. In the end, all price increases are paid for by the end consumer until wages increase. The market today is characterized by high liquidity and a thirst to do things. Money is coming primarily from the technology sector, where start-ups raise the money and the founders, together with the employees, take it out,’ said Laud.

According to the developer, pension money, which recently became available to a certain portion of the population, will be used primarily for consumption. ‘Some of this will definitely end up in real estate. It helps a bit when making a deposit, but the money per capita is small in terms of real estate. The faith of Estonians in investing in real estate continues to grow. The loan market is also favourable for those who are investing in real estate. The interest rate on loans to individuals is instead declining and the number of banks to choose from has grown. As opposed to the past, today you can take a home loan offer from at least six banks, which is what smart people do. However, from the developer’s point of view, the picture is quite different – there are only a handful of banks that could offer a loan corresponding to our volumes,’ said Robert Laud.

 

Endover is an Estonian real estate developer with 25 years of operating experience, which

creates outstanding architecture and creates innovative living and business environments. The company’s portfolio

includes 70 buildings, and 2840 apartments with a total area of 368,000 m2.