EUROPEAN INVESTMENTS

Newly built apartments are rare and the financial crisis from 2008 has halted any new developments of residential assets, resulting now in a lack of high standard apartments; this will add pressure on the pricing and we can expect price of apartments to increase radically in the next 2-4 years. Prices have already risen 25% since the beginning of the year. The Tallinn residential market is characterized by the following trends:

The emergence of the new middle urban class in search for new or recently built apartments with high end and up to date specification levels.

Prices in Tallinn still remain very low for recent apartments (between €1,000 and 1,600 per sq M) compared with the equivalent of a range of €8,000 – 12,000 for similar sized apartment footprints in Paris and £10,000 -12,000 GBP in London.

Tallinn is an affluent capital city with very low unemployment levels and high rate of young professionals, looking for new apartments to buy or to rent.

Proven active rental market; Apartments previously sold and managed by European Investments in Estonia have always been leased within less than 1 month.

Between 2003 -2007, real estate price increases in Tallinn have shown to be one of the strongest in the World. The Global Financial crisis and lack of loans and financing from banks explained the sharp decrease in market prices through 2008 and the now predicted recovery in the price level will be dramatic and sustainable. There is now a real demand from the population for newly built quality apartments and as banks start to lend again to the recovering economy.

Estonia has the level of tax that is one of the lowest in Europe with a tax level around 18% either for income tax or for capital gain tax. Transfer tax is less than 1%, and there is no tax on wealth in Estonia.

Both the Tax and legal systems are predominantly one of the most investor friendly in Europe.