Baltic Real Estate Market Overview: Q2 2025
The investment market in Estonia remained expectedly calm (just almost reaching the EUR 100 million level) during 1HY 2025, largely driven by the activity in the industrial (57% of the total invested volume) and retail segments. In May, Millerhawk acquired a portfolio of four retail properties from a Swedish investor. The transaction included three Bauhof stores (located in Haapsalu, Kuressaare, and Valga) and an A1000 store in Võru, totalling 14,300 sqm of fully leased commercial space. Additionally, Capital Mill sold an office-warehouse property located in Tänassilma Industrial Park, while Summus Capital divested the Punane 56 multifunctional complex, featuring a versatile mix of stock-office, office, and retail spaces catering to specialised retail tenants. Real (known) yields in Tallinn generally ranged between 7% and 11%. As investor interest remains elevated, then closing of deals is expected to gain momentum during the rest of the year.
Total investment volume in Latvia reached EUR 100 million in 1HY 2025, modestly meeting annual expectations and being ca 25% up from the historically low figures of 2024, the weakest year in the past decade. While more properties are entering the market, the pool of investors for assets over EUR 5 million remains limited. Transactions below this threshold dominate, driven by end-user acquisitions and strategic purchases, particularly in the grocery retail sector. The largest deal in Q2 was the purchase of Maxima Bikernieki by Madara 89 from Prosperus. Activity in the grocery sector continued for the third consecutive year with Citro acquiring a SPAR-occupied property in Cēsis. In another retail deal, local investors bought Ķirsona Māja for EUR 1.6 million. Sale- and-leaseback deals also supported liquidity and restructuring efforts. Development acquisitions remain active in prime locations, with notable deals like the sale of the Rosme’s former factory to One Development for residential conversion and the EUR 4.5 million auction of Riga Freeport’s office building. Additionally, Vald.K. acquired a site in Dreiliņi from Capital Mill for industrial development, and LIDL purchased a land plot in Vecmīlgrāvis for a new store.
Although total investment volume in Lithuania reached EUR 81 million in Q2 2025 - a 33% decrease compared to Q1 2025 - total investment volume in the first half of the year amounted to a solid EUR 204 million. Among the most notable transactions of the quarter were the acquisition of Savas SC in Kaunas by NDX Group (a deal requiring approval from the Competition Council), and the sale of the 3-star Comfort Hotel LT – Rock'n'Roll Vilnius by Lords LB Asset Management to Union Asset Management. Investor interest has been particularly evident in hotels with redevelopment potential, as well as in stock-office projects and smaller industrial schemes, which continue to attract buyer demand. Standalone grocery stores remain a core investment asset, offering stable returns with moderate risk. Older shopping centres with value-add potential remain also in focus. Furthermore, modern warehouse facilities backed by high-quality lease agreements are attracting sustained investor interest.
Read more: https://www.colliers.com/en-lv/research/q2-2025-baltic-real-estate-overview
