TALLINN - One of Estonia's largest property developers has suspended a project in Jurmala due to the drastic slowdown in the Latvian real estate market, according to reports.
The firm, Manutent, originally announced in February that it had signed preliminary agreements for the sale of one-tenth of apartments in a residential and recreation zone it planned to build in Jurmala, perhaps the priciest property market in all the Baltics. The first phase of the project was scheduled to be completed in late 2008.
Considering the recent changes in Latvia's economy and real estate market, however, the firm has had a change of heart.
"It would not make sense to build the apartments and then start gradually lowering their prices, because the apartment market has been practically at a standstill since summer," Manutent's owner, Mart Vooglaid, told the Postimees daily.
The firm will not quit Latvia entirely since the country offers immense opportunities, he stressed.
The combined cost of the two Latvian projects is estimated at 130 million euros, one-third of which is the cost of the high-rise and the rest of the Jurmala project, Manutent board member Reimo Raid told the Baltic News Service.
Aavo Roomussaar, a board member of Arco Vara, also admitted that new property development projects in Latvia have slowed down.
"We're currently mediating the sale of about 20 new apartment houses in Latvia and have managed to sell just one apartment since April," he said.
Alar Lagus, a member of the board of Merko Ehitus, said project delays were inevitable considering Latvia's economic situation.