Feature: INVESTING IN THE NORDICS
Europe’s north star Cities like Oulu in Finland are proving a beacon for overseas capital
Last year broke investment records in Northern Europe, with residential leading the way and a net positive flow of foreign investment for the sixth year running. Mark Faithfull reports
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he Nordic property markets set a ground-breaking record in 2021, with transaction volumes of more than €71bn, 65% up on the previous year and by far the highest volume ever recorded, according to figures from property advisor Pangea Property Partners. “This is an extraordinary year, with high transaction activity all across the Nordics. After a strong first half of the year, activity has just accelerated during a second half that will be difficult to beat,” Mikael Söderlundh, head of research and partner at Pangea Property Partners, says. The volumes in Sweden, Norway and Denmark hit all-time highs in 2021. In Sweden, the transaction volume increased 93% to €35bn, representing half of the Nordic transaction market. In Norway (54%) and Denmark (61%),
volumes increased significantly, while budging up 6% in Finland. The total number of transactions in the Nordics exceeded 1,300 for the first time and the average deal size increased to €53m from €41m. Pangea’s bullish outlook is shared by Copenhagen-based Lior Koren, partner, capital markets, Cushman & Wakefield, who adds: “We had a record-breaking year in Denmark in 2021, with transactions totalling €14.2bn, ahead of the former highest of €12bn in 2017. With constrained supply, the capital flows have been going further and further out of Copenhagen to other cities, with the top 25 cities the main target. “For international investors, it’s quite a big story to head to smaller cities and one of the main appeals for investors is demographic development and for around 20 of
those cities, these figures are moving in a positive direction,” Koren says. Koren describes the situation as the most liquid Denmark has ever had, adding that residential investment included multi-family, apartment blocks, student housing, senior living and even row houses. Pangea says foreign buyers accounted for a third of Nordic transaction volumes in 2021 but only 15% of sales, which gave a positive capital inflow to the region for the sixth consecutive year. In Finland and Denmark, the share of foreign buyers was more than half and investor interest in Finland has headed north, boosting some of the country’s furthest flung cities and regions according to Janne Ylitalo, service manager, investments, BusinessOulu, Invest in Oulu. Ylitalo adds: “The north has attracted large industrial investments in mining, green energy,
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