OREANDA-NEWS. March 30, 2010. The joint venture agreement between the Estonian innovation incubator Ulemiste City and Finland's Technopolis is an event of signal importance and hard to overestimate, CEO of the Estonian investment company Eften Capital Viljar Arakas says.

"This is a step of signal importance and high significance which is hard to overestimate in the context of the Estonian real estate market in such a transaction-poor time," Arakas said.

In his words, the agreement is another sign of Scandinavian companies' renewed readiness to invest in Estonia. "Be it the takeover of Eesti Telekom, Autoliv's buyout bid for Norma -- it's like a sign of faith that the worst is behind in Estonia," he said.

The old owner's staying on in Ulemiste City was certainly expected by Technopolic, Arakas said. "As this probably is Technopolis' first transaction outside Finland, they surely want the old owner to be on board so the risks are smaller," he said.

Technopolis plc representative Martin Seppala said at a news conference on Friday that the deal does not represent a real estate transaction for Technopolis. There would have been multiple opportunities for various property deals but that's not the objective of Technopolis' business, he said.

According to the agreement, Ulemiste City and Technopolis will establish a joint venture called Technopolis Ulemiste, which will acquire around 12 hectares out of the 33 hectares of land owned in Tallinn by Ulemiste City. The property is worth one billion kroons (EUR 64 mln). Out of the building rights for 162,000 square meters, 46,000 square meters has been built up.