Tartu business center challenges Tallinn

TARTU - The traditional division of Estonian business regions could change in the near future now that the university town of Tartu has opened a new business center on the Emajogi River.

The Emajoe Business Center was finished a couple of months ago, and now the 14 story office building attracts various companies operating in the fields of real estate, insurance and finance. The industrial company Estico invested 92 million kroons ($6.57 million) in the center's construction.

Tallinn accounts for one-third of the Estonian population and three-quarters of Estonian financial institutions. Most Estonians consider Tartu a province town, not a center for big business or an attraction for investors.

But Ilona Leib, a spokeswoman for the center, looks at things differently. "Tartu is in an excellent position, considering the tourism development of St. Petersburg and Novgorod. The university town is the nearest destination to visit from abroad," she said.

"Province is a mentality, a way of thinking. Tartu is Estonia's cultural center with it's world famous university, therefore one can hardly consider Tartu a province," Leib continued. "Most Tallinn city blocks, especially those which make Tallinn a city, are far more provincial than Tartu ever has been. It's provincial to classify towns as provinces."
According to Leib, the Emajoe Business Center will not remain a sole competitor for Tallinn.

"This pilot project will most likely be accompanied by others of the kind, as the flamboyant building affects future city planning and the new facilities to be constructed in Tartu will be influenced by this."

At the moment, almost two-thirds of the business center's space are still vacant. According to real estate experts, the 300-kroon rent per square meter is the main factor for that in addition to the distant location from Tallinn.

"Despite the overheated real estate market in Estonia, we do believe that we have taken into account the three major requirements of real estate business: location, location and location once more," Leib said. "It's more likely that buildings, which have been constructed in random locations, will get into trouble. Emajoe Business Center has undoubtedly high potential in the centre of Tartu."