Latvians bracing for fall after an economic boom

RIGA, LATVIA — Like other Latvians, Ralfs Jansons has been on an economic rocket ride that has taken him from Soviet Union austerity to free-market nirvana.

As a boy in communist-era Riga, Jansons' family lived in a communal apartment with two families that peddled illegal liquor and sometimes stole his clothes. Today, Jansons, 36, drives a Toyota Land Cruiser, lives in a posh downtown flat and handles real estate for an investment firm with a $5 billion portfolio.

But as the boom that transformed Latvia and its Baltic neighbors winds down, Jansons and his countrymen are left pondering two questions: Are tough times ahead, and how tough will they be?

Homburg Invest Inc. announces Baltic property acquisitions

Homburg Invest Inc. ("Homburg Invest" or "The Company") announces that it has finalized its acquisition of the "Baltic" portfolio consisting of 54 properties located in Estonia, Latvia and Lithuania (the "Baltic's") from SEB Group ("SEB"). The transaction was previously announced on April 26, 2007, when SEB and Homburg Invest entered into an agreement to acquire the Baltic portfolio. Due to the exercise of pre-emptive rights by third parties for certain of the properties, the acquired portfolio consists of 54 properties instead of the original 63 properties previously announced. With respect to the properties, 39 are occupied by SEB under long-term leases and 15 properties are primarily leased to other tenants or have short-term leases with SEB.

E-STAR PROPERTY acquires office building in St. Petersburg

Real estate investment company E-STAR PROPERTY AS has signed a letter of intent to purchase a 7200 m2 office building in St. Petersburg, Russia, from Stockholm listed Russian real estate developer Ruric AB.

The purchase price will be USD 30 million subject to a six year lease to a Swiss multinational and represents a triple net yield of 8,5 percent in the first year.

Moscow real sector to grow

Moscow's real economy growth is projected to reach 11-12 percent in 2007, Moscow Mayor Yury Luzhkov told a real estate taxation conference, adding that the non-financial sector had started developing at a steady pace after the financial crisis of 1998 and had been gaining 11 percent annually. Luzhkov added that Moscow's GRP was expected to double by as early as 2009, a year earlier than envisioned by President Vladimir Putin's program.

Russian commercial real estate market set to expand

RBC, 05.12.2007, Moscow 19:57:40.Russia's commercial real estate market is set to grow by 10 to 15 percent on average, experts believe. This year, Moscow, St. Petersburg and other cities with the population exceeding 1m people have seen a rise in new commercial real estate facilities put in operation. A significant increase in demand for commercial real estate is linked to a certain degree to the fact that this business is fashionable, stable and remunerative.

Moscow's real estate market is already nearing saturation, and the focus is shifting towards regions. In Moscow, demand is rising for larger real estate formats, and most retail operators are looking to expand their format. New formats are likely to appear, alongside the development of smaller-area convenience stores.

This Bubble Won't Burst

Boasting 13 years of experience in Russia's real estate market, Jones Lang LaSalle has become a true household name in this business here. In a recent interview with The Moscow News, JLL's Managing Director in Russia, Mark Jagger, explained the reasons behind the investors' foray into the country's far-flung regions, told us why Russia needs twice as many more shopping malls and offered a view on the impact of the credit crunch.