Developers descend on Estonia's richest parish

Photo: Postimees.ee

Viimsi Market, Viimsimarket, Viimsi Shopping Centre, Viimsi Centre, to say nothing about Maxima. In Viimsi Parish, developments have reached the realm of the ridiculous – with five shopping centres locking eyes across the street.

As the reader realises, creativity has been exhausted to name them all. In the wealthiest parish of Estonia, €74m to €79m worth of developments are underway and the competition is close.

In Viimsi Parish, all things central have converged in Haabneeme Town. Huddled around its main intersection, all the department stores are either freshly opened, under construction, in repairs, or recently expanded. Among them, Maxima is the veteran – having opened doors in 2013. In addition to the recently opened Viimsi Market and the expanded Viimsimarket, the Viimsi Centre owned by Tallinna Kaubamaja Group kicks into gear on August 13th. In it, Selver shopping mall will be joined by places like bowling hall, sports club and eight eateries. Between the two of them, Viimsi Market and Viimsi Centre cost €18m and blessed the parish 380 new jobs.

In the engulfing competition, Viimsi Shopping Centre swaps its current tenant Comarket for a flashier Delice (owned by same chain) which is a copy of what we have in Tallinn Solaris Centre – offering a wider variety of stuff to eat.

«We used to lack everything, and now it overflows,» was what real estate businessman Viljar Arakas told Postimees in a recent interview regarding the Viimsi retail rush – adding that time would tell who would survive.

The developers do not think the abundance is a problem and deem Viimsi’s booming population and prosperity the chief investments point.

Place for business

Margus Puis, business property developer at Viimsi Market’s holding company OÜ Lugosta, said they intend to keep investing into Viimsi while declining to reveal details. He explained that Viimsi is experiencing rapid development and the business environment is excellent. Also, he praised the open and helpful attitude in parish government. «In some parishes it takes months on end for the government to take decisions, but these guys are online, as if... decisions and agreements come so smoothly,» beamed Mr Puis.

Not limited to shopping, people in Viimsi have other options to entertain themselves: such as a movie house and two (!) spas. At that, Tallinn Viimsi SPA will feature a €12m experience-centre Atlantis H2O, to be opened in August, where a science-based discovery centre and planetarium/concert hall are complemented by a water fun area with slides and tubes.

«Feels like Viimsi will be a kind of a hub for the people in Pirita garden suburb and around,» observed Haldo Oravas, head of Viimsi development centre and former parish elder. «Perhaps the developers agree and are therefore eager to rather build the centres in Viimsi than spread them all over Pirita and towards Tallinn.»

As noted by Mr Oravas, Haabneeme has obviously emerged as the heart of Viimsi, thus boosting the development of the region. He said the parish is hopeful for Haabneeme to develop a cluster of offices so people would not have to commute to Tallinn to work. As it is, Mr Oravas said Viimsi features some 2,500 firms, home offices included. According to him, among all Estonia’s local governments Viimsi pockets the best income tax per payer.

As services now abound and inhabitants keep adding, homes are developed briskly. As you are reading this, two real estate companies are building terraced house and twin-house complexes for €11m.

According to sales rep Mati Meier of the one called Hausers, lion’s share of Viimsi’s apartment houses date back over a decade and during that time the needs of the families have changed. Therefore, the developers are busy offering homes bigger and more private. Mr Meier said the longer perspective is for Viimsi real estate to rise in value.

The kindergarten issue

As explained by Mr Oravas, it is mostly families with one kid minimum moving to Viimsi, such as require immediate investments. He admitted the parish is rather hard pressed with this. Kindergarten places are badly lacking in Viimsi, and it’s hardly better with schools.

Thus, with help by EU funding, the parish will build a Uus-Pärtle kindergarten by fall of 2016. And, by 2018, state money will also build for Viimsi a state gymnasium. But till then they will have to expand an existing Karulaugu School.

The bulkiest project of the parish is rebuilding its plumbing – a work with sewerage has been going on by a decade. With EU money, the parish is building a new water treatment plant in Muuga which will be cleansing the water of Viimsi, Jõelähtme Parish and perhaps even that of Maardu City. The area would entail a common plumbing and total cost will exceed €15m.

In addition to all of the above, the parish is building a stadium and planning cycle/pedestrian tracks, a health/ski complex, reconstruction of manor park complete with a new concert arena. With several of these not yet launched, the costs are hard to estimate. The parish finance department and development centre would guess the parish managed developments might cost some €33m to €38m.

For its developments, Viimsi Parish has been piling up loans. At the moment, the debt burden stands at €22m and yearly budget at €21.3m. Mr Oravas said that broadly speaking the Viimsi debt obligation equals one year budget. For years, loans were assumed as they needed a school and a kindergarten, explained Mr Oravas. «As for the land we needed for these institutions, it was not granted to the parish,» he said to point out scope of expenses.

In eyes of the development chief, the large debt burden is no problem. «With our obligations, we are nicely within the allowed boundaries,» he said and added that while the obligations used to stand at 150 percent of the parish budget, it’s within a 100 percent now. «I really don’t see a problem with debt obligations, we definitely have the capacity to pay,» assured Mr Oravas, adding that they have actually managed to beat the planned tempo.

For Mr Oravas, the problem with Viimsi’s speedy development lies someplace else. «To grasp the bigger picture, we used to have this document called Estonian Regional Development Strategy (for 2005–2015 – edit) prescribing that flow of Estonian population into area around Tallinn should not exceed 41 percent,» he said. «I cannot tell you the numbers, but I guess the percentage has been exceeded long ago.»

Mr Oravas is right – in 2012, Harju County had 41.6 percent of Estonian population living in it. As explained by Mr Oravas, Viimsi’s development has triggered an internal migration: from the countryside, they come to Tallinn; having prospered in Tallinn, they head to garden suburbs. «This might be a painful process for us as at places Estonia will be empty,» noted Mr Oravas.

Viimsi Parish

73 km2, located in Harju County, next to Tallinn and Maardu.

This May, Alvar Ild was elected the parish elder.

By population, the 6th local government in Estonia – 18,268 inhabitants (June 1st 2015), plus 3,000 people dwelling in the parish not registered as inhabitants of Viimsi.

2nd best local government in Estonia by capacity (considering population, income, employment rate, financial situation, services etc).

In 2014, showed largest average monthly gross income per inhabitant – €1,362.

The parish’s 2015 budget is €21.3m.

Debt obligation stands at €22.0m.

The estimated costs of main near-term developments (including private enterprises, state gymnasium, EU support) will amount to €74m to €79m.