A new era with new conditions has reshaped the real estate landscape. While there’s rising demand for larger apartments, smaller office spaces, summer homes, and compact retail units — what’s happening in the industrial and logistics sector? What’s in demand, is supply sufficient, and which properties are harder to lease or sell? What kind of spaces need to be built more, and where are the current “hot” locations? Uus Maa’s Head of Warehouse and Production Real Estate, Fred Linnukütt, shares his insights.
Growing Interest in Industrial Land
There’s noticeable interest in purchasing land for industrial and logistics purposes. I’ve closed deals at record-high land prices, especially in Maardu. Previously, prices topped at €27/m² with an average around €22/m², but recently, deals have been done at €38–45/m².
Investors are increasingly interested in logistics properties and are looking for cash-flow-generating assets. While the transaction volumes are significant — often €10 million or more — the supply is limited. Property owners are reluctant to sell. Small industrial businesses are also growing and looking for 200–800 m² production spaces, yet the market offers very few options.
Flexibility Is the New Security
Shorter lease terms are becoming the norm — where previously 5-year minimum contracts were standard, 3-year leases are now more common. This reflects landlords’ increased flexibility and trust in tenants’ business models.
Developers are looking for new plots — both with and without detailed plans — but availability is low due to most being already sold or developed. Even individual plots in ongoing developments are in demand. The Tartu Road corridor remains especially hot, and land prices there are expected to keep rising.
Inside the City or Just Beyond?
There’s demand for representative urban warehouse/showroom spaces with loading docks — and some are already being planned. But due to high urban land prices, developers are cautious. In areas like Lasnamäe or Betooni Street, land prices can’t increase much further (currently €50–80/m²) because rents don’t support higher land costs — they’ve likely reached a ceiling.
Tech parks are evolving based on distance from the city and intended use. Mõigu Tech Park and Peetri are more stock-office and owner-use focused rather than speculative builds. Planning is more thoughtful, and quality matters more, especially for smaller spaces. The closer to the city, the more representative the space needs to be. In contrast, heavier industry is moving outward to areas like Rae, Jüri, Vaela, Tänassilma, Saue, and Maardu.
Source: Äripäev, Helen Roots
