Favorte at Äripäev: we will not be influenced by short-term market fluctuations

Äripäev’s portal “kinnisvarauudised.ee” asked Favorte about the market situation and the company's plans. Read more about the interview below.

1.    How did the first quarter of 2023 turn out for Favorte OÜ?

 

The first quarter went according to plan and successfully for ongoing projects.

 

Veskimetsa Perekodud project has been completed in Haabersti, next to the Tallinn Zoo. A total of 62 apartments with energy-class A.

 

In Järveküla, the construction of the sixth stage of Käokella residential area at Sõnajala tee 1 is progressing according to plan. It has 64 A energy-class apartments and 350 m2 of commercial space to serve the residents. More than 170 families and 5 companies have already found a home in Käokella residential area. 

 

The construction of the two commercial projects progressed on schedule so that we were able to celebrate with rafter parties.

 

Kadaka Trade Center on Kadaka tee with a gross area of 16,000 m2. We offer office and sales premises and stock-office commercial spaces. One of the biggest business centres on Kadaka tee. 

The fourth aka Mäeküla 7 commercial building of Tähetorni Tehnopark with a gross area of 4,850 m2. We are offering three-in-one stock-office commercial premises. Suitable for opening an office, warehouse, or a showroom under one roof. Tähetorni Tehnopark is located in Haabersti, right by Paldiski maantee and is one of the few modern technology parks within the city borders. So far, 17,000 m2 of commercial space has been completed and 26 companies have signed rental agreements. The 20.5-hectare business park development area can accommodate up to 12 commercial buildings (60,000 m2 of commercial space), the first three of which have been built to date.

Most of the tailor-made premises of Iru Ärikeskus, which was completed in the fourth quarter of last year, were handed over to tenants. Iru Ärikeskus is in the Iru-Maardu industrial area, at the beginning of Vana-Narva mnt. 

 

 

2.    Based on what knowledge and in what direction are you currently making plans in your company?

As we are aiming to build a large commercial real estate portfolio, we will not be influenced by short-term market fluctuations and plan to launch several new developments in the second half of the year. We plan to start the construction of Väo Tehnopark right next to the Väo traffic junction (a total of six commercial buildings, 21,300 m2 of stock-office commercial space), the construction of Kärmu 1 stock-office commercial building in Maardu (gross area 7,200 m2) and the construction of Taevavärava stock-office commercial building near Jüri roundabout (gross area 7,000 m2). Construction of the fifth aka Mäeküla 9, stock-office building (gross area 5,000 m2) is also starting in Tähetorni Tehnopark.

In terms of residential projects, this year we will focus on launching the construction of the first four apartment buildings in Rehelepa residential area. Rehelepa residential area has a total of 334 A energy-class apartments, which will be built in the next few years on the border of Nõmme and Haabersti. 

3.    What is the situation and expectation in the construction and development sector as a whole? What is the labour demand of the sector in the coming year?

 

We share the general expectation that Euribor will start to fall in the second half of the year, boosting demand for both residential and commercial property. We are currently forecasting a small fall in construction prices, but they will also start to rise slowly towards the end of the year. 

 

The need for labour remains unchanged. While volumes may be down now, it is difficult to assemble a good team, and right now at least, reducing the size of a functioning unit is not rushed. The hope is that at the end of the year, demand will recover, and the existing team will be able to start with the works immediately.  

 

 

4.    What are the major challenges facing the construction and real estate sector and the economy in the coming year?

Energy-efficiency and effectiveness will be the focus to get through the tougher times. In our work, we specialize in the development of commercial buildings with a stock-office space concept, which fully supports this goal. 

There are still companies with different departments spread across the city that do not take advantage of the benefits of three-in-one stock-offices, which help to minimize logistics, time, and other side costs. In addition, we are always available to support our customers in developing tailor-made office spaces, so that every square metre is put to smart use. We ensure that our commercial buildings are easily accessible for people without cars, use modern technological solutions to minimise the energy consumption of commercial premises & produce and consume green energy. We keep up with the changing space needs of our tenants and offer flexible contract in technology parks, allowing you to relocate comfortably in the same location.

 

5.    What do you expect from the newly elected government?

We expect the government to take a fair approach to private property protection. State and nature conservation restrictions on private property must be fairly compensated to the private owner. The compensation of the people affected by the construction of the Nursipalu training ground must be appropriate. 

We also want to see better cooperation between public and private businesses. Both sides should be ready for compromise and transparency to support economic growth.