Finland's biggest construction firm, YIT, is building a strong brand in residential construction in the Baltic states and Russia. The demand for market-financed non-rental residential units will increase enormously. This year we will start build more than 3,000 residences in the region," says director Mikko Rekola.

According to the Senior Vice President with responsibility for YIT international operations, it is a question of a very fast-growing and one of YIT's most important new business areas.

"Residential production began in these countries three years ago. This year we will be building in Tallinn, Pärnu, Kaunas, Vilnius, Riga, St Petersburg and the Moscow area," Rekola says.

Record order book

YIT's technical and financial performance will benefit from the growth in the demand for technical services in the Baltic states in the next few years. The favourable prospects are based on a strong order book.

According to forecasts, economic growth in the Baltic countries and Russia will be twice as fast as in Scandinavia. The growth in investment will be even faster. The strengthened middle class will mean in particular a rapid increase in the market for residences in the major cities.

"In terms of turnover, construction in the Baltic states alone will reach between EUR 120 and 150 million," Rekola believes.

Plots for 5,000 residences

According to forecasts concerning EU enlargement, construction needs in the Baltic states will exceed general economic growth. There will also be the desire to invest. "The Baltic states as a market are extremely interesting, but the competition is fierce," Rekola points out.

One of YIT's construction resources is the reserve of plots, which will protect the continuity of the business operations. In the Baltic countries YIT has been concentrating on the acquisition of plots in the most central areas of the capitals and some of the biggest cities, and in the area around Moscow and in St Petersburg in Russia.

During 2003 work started on an amount of residential plots with a floor area of about 32,000 square metres. The rights to build 390,000 square metres of residential construction have been acquired. At the end of 2003 YIT had plots equivalent to about 430,000 square metres outside Finland, which is enough for the construction of about 5,000 market-financed residences.

Baltic specialist

YIT has more than 40 years' experience of construction in Russia and almost 30 years' experience in the Baltic states. Rekola depicts the situation in Estonia and Lithuania as being extremely strong. In terms of total volume, the company is one of the leading two building firms in the Baltic states.

"We can bring special expertise to the market, which means among other things reliability and safety, local expertise, quality in planning and construction and responsibility for the entire service chain," Rekola emphasizes.

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Dozens of building projects are under way in the Baltic countries and Russia; industrial buildings, hotels, shopping centres, hospitals, spas and waste water treatment plants. Photo: the Pirita residential area in Tallinn.