The property investment markets in the Baltic states of Estonia, Latvia and Lithuania are characterised at present, on the one hand, by a combination of a general economic slowdown and the obvious impact of the credit crunch and, on the other, by a remarkable supply of new investment opportunities. International real estate investors’ attitudes toward the Baltic states have been tempered by the somewhat vague macroeconomic background and by higher credit costs. One positive for investors is that local property owners are having to look at selling their assets so they can find the resources to complete projects that are underway or to start new ones.

Depending on the type and quality of investment, net yields were affected by 25 to 100 basis points during the second half of 2007 and by a further 25 to 50 basis points during the first quarter of 2008. The fallout from the credit crunch has had implications for property pricing and for the spectrum of potential buyers. The Bal