LAWIN legal experts comment on the Baltic real estate market
On 2 March 2011, LAWIN legal experts participated in the media breakfast briefing organised in Lithuania (Vilnius) and Latvia (Riga) by the leading property consultancy in the Northern Europe – NewSec.
Real estate (Newsec), legal (LAWIN) and financial (Danske Bank in Vilnius and Unibanka in Riga) experts presented the latest development and currently observed trends in different areas of the real estate market in the Baltics and in each jurisdiction, in particular. The presentations covered areas of office, warehouse and land property market as well as the real estate commerce and dwelling market, and proceeded with the questions and discussions.
In Vilnius LAWIN partner Tomas Milasauskas commented on the latest real estate tendencies in Lithuania. He stated that the tension among lessors and lessees is gradually subsiding and the lease relations become settled. Lessors have realised that even the conditions established in long-term agreements not subject to termination and modification are not inviolable in Lithuania – the lessee may go bankrupt or “make bankrupt“ its company and be restored to life, also that in similar situations Lithuanian courts can apply analogous legal rules in a way which is completely different than that in mature European states. The above lessons will likely get resembled in lease pricing and acquisition prices, and as a rule in economics the end user pays for everything.
“In 2010 again we had many planned real estate investment transactions and not so few of such transactions were performed. Although due to the general market situation such transactions should be deemed opportunistic, however, they obviously involved most serious calculations, responsible assessment and professional planning. An evident tendency of market professionals entering into associations and alliances with financial investors can be noticed in partnership transactions and development projects,” added Tomas Milasauskas.
In Riga LAWIN Senior associate Sanda Lāce provided an overview of the planned legal changes in regard to the local real estate market, mainly focusing on the new draft construction law, draft law on territorial planning and a number of laws regulating enforcement issues. “Taking into account the current economic situation, the most painful issues in Latvia are management and outstanding payments for utilities, which are often not covered in case of collection under compulsion, because the creditors are the ones who take hold of the funds obtained from sale of the property,” commented Sanda Lāce. Then, she introduced to the audience the ideas and suggestions raised among legislators and lawyers in order to find a solution both to the mentioned problem and to the other poignant issues arising due to the deficient legislative basis.
LAWIN in cooperation with Newsec and other partners annually provides a consolidated overview of the latest situation of the commercial property market in three Baltic countries as well as introduces the relevant update on property related legal and taxation issues.
