With a transaction volume of approximately EUR43.3 billion (2016: EUR41.9 billion, 2015: EUR32.8 billion), more properties were traded in the Nordic countries last year than in the past 25 years, according to research released by Catella.
And Catella is expecting the positive trend to continue in 2018.
EUR3.4 billion was invested by Nordic investors in European real estate outside of the Nordic countries. The core markets are still in focus of investors but second-tier locations are gaining momentum.
The share of international investors has increased in all countries, in some parts particularly strong. The strongest increase is recorded in Finland with 73 per cent in 2017, compared to 31 per cent in the previous year. Denmark also exceeded the 50 per cent-mark, followed by Norway with 43 per cent and Sweden with 13 per cent.
Regarding invested asset classes, a certain degree of heterogeneity can be measured. Investors primarily invested in office properties in Norway and Finland, while residential properties were the most popular asset class in Denmark and Sweden. The share of transacted logistics properties is at a similar level however.
With an average office prime yield of 3.50 per cent, Stockholm is the most expensive office location of the North-European cities. The highest yield is once again recorded in the city of Turku in Finland (7.25 per cent).
A similar picture is seen in the retail yields: the lowest yield here is recorded in Copenhagen (3.25 per cent), followed by Stockholm (3.50 per cent). The yield gap between office and retail properties has also decreased in the Nordics and is currently at 18 base points (4.88 per cent office, 4.70 per cent retail) in the twelve observed markets.
“During the course of the year, we expect stable or slightly increasing office rents in almost all North-European markets,” says Dr Thomas Beyerle, Head of Group Research at Catella. Current frontrunner with a prime rent of 60.60 EUR/sq m is Stockholm, the lowest recorded value is found in the city of Odense in Denmark (11.20 EUR/sq m). “Because of the continuously high demand for office space, a slight decrease of vacancy rates can be expected in most cities.”
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