Transaction volumes in the Nordic commercial real estate market will exceed €42 billion ($50 billion) in 2017, which is 3 percent lower than 2016, according to a report by Pangea Property Partners. This is the second-highest level ever recorded.
“There will always be variations between the individual countries, but the Nordic region as a whole continues to be one of Europe’s most liquid property markets,” said Bård Bjølgerud, CEO and partner at Pangea Property Partners.
Volumes have increased significantly in Norway (up 11 percent), Finland (up 30 percent) and Denmark (up 31 percent) from last year, with the Finnish property market setting an all-time high in 2017.
Sweden remains the largest property market in the Nordic region; however, Sweden is the only country showing lower volumes than last year. The transaction volume dropped 28 percent from a very strong 2016.
“The decline in Sweden can be explained by increased uncertainty related to new tax regulations, a weaker housing market and few really sizable deals,” said Mikael Söderlundh, head of research and partner at Pangea Property Partners. “That said, the decline is not as dramatic as it first seems since we compare with the record volumes from 2016, and the number of transactions has only decreased marginally.”
| Transaction volumes 2017 |
Sweden |
Norway |
Finland |
Denmark |
Nordics |
| Number of transactions (#) |
450 |
265 |
130 |
140 |
985 |
| - change from 2016 |
-3% |
+9% |
-10% |
+10% |
0% |
| Transaction volume (€ billion) |
15.4 |
8.5 |
9.6 |
8.6 |
42.1 |
| - change from 2016 |
-28% |
+11% |
+30% |
+31% |
-3% |
| Average transaction size (€ million) |
34 |
32 |
74 |
61 |
43 |
| Foreign buyers (%) |
22% |
23% |
83% |
59% |
44% |
Estimated figures for full-year 2017 based on property transactions above €5 million.
The largest property sector in 2017 is office, accounting for 33 percent of the Nordic transaction volume, followed by residential and retail, accounting for 22 percent and 17 percent, respectively. In 2016, residential was the largest property sector in the Nordic market.
The share of foreign buyers in the Nordic property market is 44 percent in 2017, a significant increase from 23 percent in 2016. In terms of volumes, foreign investors are significant net buyers, acquiring property for about €18.5 billion ($21.9 billion) and selling property for about €8.5 billion ($10 billion) in 2017.
“We see a continued strong demand from offshore investors, as well as significant pan-Nordic asset rotation. In particular, the share of foreign buyers in Finland and Denmark is exceptionally high this year, with the bulk of capital coming from the United States, China and Sweden,” said Bjølgerud.
