ICSC: Baltic recovery well under way (EE/LV/LT)

Consumer confidence in The Baltics has risen over the last few months, investment is starting to flow again and Estonia's commitment to adopt the euro in 2011 is another sign of stability within the region. There are significant opportunities for retail investment in the Baltic States, according to speakers at the ICSC Baltic States Retail Real Estate Conference held in Riga, Latvia recently, but the region must make sure it is not overlooked and shout louder about its successes.

Mr Petri Olkinuora, CEO, Citycon

Petri Olkinuora, CEO of Citycon.

With a combined population of around 7 million, Latvia, Lithuania and Estonia can be overlooked by multinational retailers such as H&M. However conference chair Marcis Budlevskis, Director of Lease and Development at Linstow Center Management of Latvia, points out there are huge opportunities for franchisees seeking to bring retail concepts familiar elsewhere in the world, into the region.

He said: "There is a golden opportunity for multi-national retailers seeking to establish a global reputation to introduce their brand into the Baltics at low risk, and for professional franchisees to create successful businesses. Every retailer is looking for expansion and this region represents a first class opportunity."

According to Alvydas Zabolis, Managing Partner at Zabolis Partners of Lithuania, who also spoke at the conference: "Local capital also continues to fund development: We have capital available and the banks are continuing to work with people who have shown they can perform. For those looking long term, land is now affordable and retailers are more willing to talk because supply is low. For a sound business there is no lack of money."

Jerry Wirth, of Latvia-based Retail Investment and Asset Management company R B Management, said: "Investment interest in the Baltics at the moment appears to largely come from Russia, the Nordic Countries and Germany. Many retail development businesses failed during the recession, but the good news is that the developers who remain are in large part those who do it rather well. Investment capital today is coming from countries that understand the Baltic market, its' sold foundation and real potential."

While all the signs are good, The Baltic States biggest problem could be its own view of itself as small.

Petri Olkinuora, Chief Executive Officer at Helsinki-based owner and long-term developer of shopping centers, Citycon, said: "I have a hard time persuading our investors why we are investing here, even when I tell them that our capital rates are good and we make money. The region must have more confidence in itself, be prepared to spread the good news and educate the world."

Source: Nicky Godding

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