Record Year
Finnish real estate highly attractive to foreign investors
The year 2017 is sure to clinch a new record in transaction volume Finland . The previous record level in transaction volume – € 7.4 billion reached in 2016 – was exceeded already by the end of October 2017 . Contributing to the high times , there is the largest-ever property transaction in Finland : Polar Bidco acquiring the listed company Sponda , with its property port folio of € 3.7 billion . Delisting of the Sponda shares will decrease the market capitalisation of the Finnish listed property companies by more than one third .
Janne Larma , CEO of Advium Corporate Finance , is not surprised by the record year , since investing on real estate is a global trend that keeps gaining momentum . “ With interest rates down , and stock market losing traction , the real estate market becomes more attractive .”
Presently , the share of foreign investors of all transactions is historically high in Finland : 73 % at the end of the third quarter . Naturally , the Sponda transaction is a large
54 Nordicum factor in this , but there have also been many other significant transactions with foreign investors heavily involved . In 2017 , more than 10 new foreign investors have entered the Finnish market .
Nordic Number One
According to KTI Property Information , the attractiveness of the Finnish market is sustained by higher yields in comparison to most other markets . Janne Larma agrees :
“ In many regards , Finland is now a more attractive market than other Nordic targets or European ones , for that matter .”
Also , the improving outlook of the economy strengthens the position of the Finnish property market . As it stands , the spectrum of strategies of foreign investors is broad ; both core players looking for prime properties with low but stable cash flows and opportunistic players with two-digit return expectations have been active in Finland in recent months .
However , as the future liquidity of investment targets is held in high regard by especially the foreign investors , the attractiveness of the “ rural ” markets remains limited .
It ’ s noteworthy that in addition to the “ usual suspects ” – Europeans and Americans – also Asian investors have shown an interest in Finnish markets . Chinese are leading the way in this , with CIC ( China Investment Corporation ) eyeing logistics real estate assets .
The attractiveness of property investment is also apparent in the number of new property funds being launched . In 2017 , new mutual property investment funds have been founded by , for example Fennia , Trevian and CapMan .
Star Performance
The megatrend pushing property investment is urbanisation – and the largest cities in Finland are growing strongly . So far , the foreign investors target their main interest in