According to Danel Talpsepp, CEO of UUS MAA Commercial Real Estate, Estonia’s largest property agency, there is currently a strong shortage of plots near Tallinn suitable for developing larger industrial and commercial buildings. However, over the next few years, 3–4 major projects are expected to come to market, which should help ease the situation.
“There has been a shortage of commercial and industrial plots near Tallinn for years,” Talpsepp explains. “If someone wants to build a larger warehouse or production facility—say, 10,000 m²—there are only a few suitable plots available. Most of what’s for sale are outdated spaces, and there’s simply no land for new developments. Some companies and developers have been searching for a location for years.”
“Business activity continues to concentrate around Tallinn and a few other major regional hubs where logistics and workforce availability are strong. The main bottlenecks are the lack of available land and land being locked up by speculators, which limits both local and foreign investment,” he adds.
“While land is technically available around Tallinn, the main obstacle is restrictive municipal zoning plans and bureaucratic hurdles. For example, if a company purchases two adjacent plots and wants to combine the development rights, such a change can take years,” Talpsepp notes.
“In some nearby municipalities, progress is virtually nonexistent. Inter-agency communication is poor, and development often depends on the individual vision of one official. Some areas have seen projects delayed for ten years or more due to inefficiencies,” he continues.
However, Talpsepp says that several large-scale industrial park projects are finally gaining momentum and will help relieve the shortage. “One of the closest areas to Tallinn is the Männiku direction, where Silikaat Grupp has 28 hectares and Maru Ehitus owns 11 hectares of development land. The area’s future depends largely on tenant demand, which will likely increase once the Tallinn Small Ring Road is completed. Since the main logistical bottlenecks are resolved, Maru already has warehouse and production facilities in the design phase,” Talpsepp notes.
“The Pärnu Road exit from Tallinn is also heating up, particularly around Jälgimäe and Gate Tallinn near the Tänassilma Technology Park. There is interest and land available, but most plots have already been sold, and rising price expectations have slowed transactions. Developers are mainly waiting for the right client to build for,” he adds.
“There is also development potential in Rae municipality, where prices haven’t yet peaked. While in Peetri—along the same corridor—most prime plots are already sold and development land with building rights is priced at €75–100 per m², Jüri remains at the lower end of that scale. Larger spaces are being developed in Jüri with relatively affordable rental rates (€5.9–6.7/m²), though interest has been modest so far,” Talpsepp explains.
“The most rapidly progressing area right now is along the Vana-Narva Road between Tallinn and Maardu. This emerging commercial, industrial, and residential zone already features the completed Iru Business Center, upcoming 20- and 11-story towers with serviced apartments and commercial units, the new Selver logistics center, and various stock-office-type developments combining showroom, warehouse, and production space,” Talpsepp concludes.
