Investors showing interest in properties in Finland

Two-thirds of investment capital coming from abroad

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Property investments are reaching new heights in Finland this year. According to Catella, the leading consultancy firm in the field, the total value of investments will exceed EUR five billion, which is more or less double the annual average for the past few years.
      The aggregate sum is partly elevated by a number of property portfolio deals, where hundreds of premises may switch owners all at once. Retailing company Tradeka, for one, sold no less than 270 of its retail outlets in one go.
      According to Catella managing director Timo Nurminen, the interest of foreign investors towards Finland is now spreading from the capital area to the rest of the country as well.
     
By the end of August, EUR 2.8 billion had already been invested in properties in Finland this year. The foreign investors' share of this was 70 per cent.
      In the Finnish investment market, the Helsinki area still attracts the most attention, but the share of the rest of the country is on the up. Forty per cent of the new property investments are now directed outside the capital region.
      The property deals made in the early part of the year include, among others, the selling of the Kamppi Commercial Center with the adjacent office premises, as well as the selling of the hotels portfolio of the property investment company Kapiteeli.
      The EUR five billion estimate is based on the assumption that the State will manage to complete the selling of the rest of Kapiteeli as planned by the end of the year, as the favourable market situation would suggest.
     
An office block in downtown Helsinki has generally been considered a time-defiant cornerstone of property investments in Finland. To some extent this still holds true, but interest towards such properties has subsided somewhat.
      The invasion of foreign investors together with low interest rates has sent the prices of fully-occupied rental properties in prime locations sky high. According to Catella, deals are struck on centrally located office buildings at a price level that will yield an annual net rental income of around five per cent. This is no longer all that attractive to prospective buyers, who are starting to turn their eyes elsewhere, for instance to warehousing or production facilities further afield, where the net return can be several percentage points higher.


Previously in HS International Edition:
  London & Regional Properties acquire Dividum hotel property company in Finland (8.9.2004)
  Major Helsinki region shopping centres into British hands (7.5.2004)

Links:
  Invest in Finland
  Kapiteeli
  Kamppi

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