Tallinn was originally a picturesque medieval town with winding cobbled streets and crumbling 800-year-old buildings, but a massive injection of foreign and EU investment over the last few years has changed all that. Tallinn old town has now been renovated to its former glory, and the cobbled streets have become dotted with little shops, boutiques and restaurants to cater for the huge influx of tourists that flood Tallinn during the summer months.

The spring and summer also see regular 'Tallinn Old Town' days, when local farmers and shopkeepers set up stalls in the city centre to sell their wares. In spite of its beautiful centre, much of Tallinn is typically 21st century. Five minutes walk from the Old Town is the central business district (CBD), where the constant construction cranes and towering skyscrapers reflect the new wealth being pumped into the city.

It is there that many of the big companies stationed in Tallinn are based, as well as a growing number of hotels. Tallinn old town can only house a certain number of tourists in peak season, and the majority spill out into apartments and hotels as close to the medieval centre as possible. This means that apartments and property in the new and off-plan blocks in the CBD are very much in demand, as property investors hope to take advantage of the growing foreign presence in Tallinn.

The Old Town isn't Tallinn's only attraction. Buildings from the Tsarist period are equally impressive, and include the magnificent Kadriog palace and Alexander Nevsky cathedral. Even the period of Soviet occupation has left its legacy, with particular attractions being the sinister KGB hq and the Maarjamae War Memorial.

In terms of property and property investment in Tallinn, the best places to invest tend to be central. Property prices in Tallinn Old Town have risen considerably in recent years – a one-bedroom apartment would currently set you back about £60,000 – and are expected to continue rising for the rest of the year. Unless you are experienced, property renovation projects in Tallinn can be tricky due to the vast amount of work that needs doing to improve ancient buildings to modern standards. If you're looking for a property bargain in Tallinn, then the best place to start is the CBD, where off-plan apartments are selling for considerably less than those in the city centre.

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Article published July 2007