Strong global commercial real estate investment in 2015 has positively affected the Finnish property market. According to KTI's Autumn 2015 market review, transaction volume in the first three quarters of this year (totalling €4.1 bn) is already close to last year’s total volume, which was significantly higher than previous years. However, unlike in many other markets, the volume is not likely to achieve the levels of record years 2006 and 2007.
The number and variety of players in the Finnish property market is increasing rapidly due to both new international investors entering the market and new domestic structures being established. Strong demand has pressured prime yields to record low levels. However, the tight economic situation has kept investors cautious, and yield premiums for secondary assets remain rather high. Higher yields have also started to attract investors to riskier assets. Differently from the previous years, some properties with high vacancies have also been sold this year.
Retail properties were the most traded sector in the first three quarters of 2015 and despite the increase of new retail developments, retail sales decreased by 1.1% in January to August compared to the previous year, according to Statistics Finland. The retail rental market has been challenged by both the economic conditions and the changing behaviour of consumers. The ongoing structural change in the retail business is also impacting space needs and usage.
To find out more, download the KTI market review here.
Source: KTI
