2016 The Finnish Property | Market

THE FINNISH PROPERTY MARKET 2016 KTI Finland in co-operation with: City Helsinki; of KIINKO Real Estate Education; Kuhanen, Asikainen and Kanerva Attorneys; Newsec; LocalTapiola; Ovenia Group; RAKLI; SEB Group; Sirius Capital SATO; Partners; Skanska and SRV.

The Finnish Property Market | 2016

Contents

Preface 7

1 The Finnish economy 8 1.1 The structure of the economy 8 1.2 Outlook for the Finnish economy 10 1.3 Finnish public finances 12 1.4 Finland’s international competitiveness 15 1.5 Main city regions in Finland 16

2 Institutional aspects of the Finnish property market 19 2.1 Two forms of property ownership 19 2.2 Market practices of property investment and renting 20 2.3 Planning 22 2.4 Taxation in Finland 23 2.5 Legislation for indirect property investment 27

3 The Finnish property investment market: volumes, structure and players 28 3.1 Investment market in 2015 28 3.2 Ownership structure 29 3.3 Real estate service sector 37

4 Property sectors: market structure, practices and investment performance 41 4.1 The office market 41 4.2 The retail market 45 4.3 Rental residential sector 49 4.4 Public use properties 54 4.5 Industrial / logistics market 56 4.6 Hotels 57

5 Property markets in different regions – outlook for 2016 58 5.1 The Helsinki metropolitan area 58 5.1.1 Helsinki 60 5.1.2 Espoo 65 5.1.3 Vantaa 68 5.2 Other growth centres: Tampere, Oulu, Turku, Jyväskylä, Kuopio and Lahti 69

Key terminology 75

The sponsors of this publication 76

Preface

The Finnish Property Market 2016 discusses the structure, players, market practices and conditions in the Finnish property investment market. The report aims to satisfy the information needs of international investors and other players interested in the Finnish market.

The report is published annually in March. The report is also available in PDF format at www.kti.fi.

KTI Finland also publishes an electronic newsletter twice a month. Finnish Property News covers the latest news from the Finnish property market. To receive this newsletter via e-mail, please subscribe to it at www.kti.fi.

This publication is sponsored by 12 companies and organisations representing the Finnish property investment, development, management, finance and advisory sectors. KTI wishes to thank the sponsors: The City of Helsinki; KIINKO Real Estate Education; Kuhanen, Asikainen and Kanerva Attorneys; LocalTapiola; Newsec; Ovenia; RAKLI; SATO; SEB Group; Sirius Capital Partners; Skanska and SRV.

The report provides a comprehensive overview of the Finnish property market. KTI Finland can also provide more detailed information and analysis on the individual sub-markets for specific needs, upon request.

We hope you find the report interesting, relevant and worthwhile reading.

Hanna Kaleva KTI Finland

KTI Finland is an independent research organisation and service company providing information and research services for the Finnish real estate industry. KTI maintains extensive databases on returns, rents, transactions, operating costs and customer satisfaction measures in the Finnish property market. Based on these databases, various kinds of benchmarking and analysis services can be provided. For more information, please contact KTI, tel. +358 20 7430 130, email kti(a)kti. fi or visit www.kti.fi.

7 8 1 The Finnish economy Basic about Finland facts Parliament State of Head governance and History POLITICS Currency tries indus exporting important Most capita per GDP ECONOMY cities important Other Capital city Religions Languages Population PEOPLE Distances area Total GEOGRAPHY - Social Democratic Party (34). Party Democratic Social (37) The and Party Coalition National (38), The Party Finns (49 The seats), Party Center The parties: Biggest parliamentCurrent in elected 2015. 4years. for elected members, 200 chamber, One 2012) (since Niinistö Sauli Republic, of President 1995 since Union European the of Member 1917 since democracy Independent 2002) (since Euro goods electrotechnical and Electronics equipment and Machinery Metal and engineering products Chemical products industry products industry paper and Forest € 37,351 (2014) Lahti, 104,000 Kuopio, 112,000 Jyväskylä, 137,000 Turku, 186,000 199,000 Oulu, Vantaa, 215,000 Tampere, 225,000 270,000 Espoo, biggest the being Vantaa and –Espoo municipalities neighbouring 13 and Helsinki comprising Helsinki region, 1.4 million inhabitants inhabitants 630,000 Helsinki, Orthodox 1.1 % % 73.8 Lutheran % 5.3 by spoken Swedish, 89.0 by % spoken Finnish, languages: Two official km per 2,904 Helsinki kilometre square per inhabitants 18 Density: 5.49 million west to east km 540 south to north 1,160 km 338,000 square kilometres 2 per km 2 per Finland): (northern region Lappi 174 km per Finland): (southern region Uusimaa 2 2 2 production played an important role during the strong strong the during role important played an production industrial exports, Finnish for importance its to Due world. in the country 25th richest the as Finland places this Fund, Monetary International to According 40,661. USD to amounted capita per production domestic In 2014, well-being. and income gross Finnish the level of ahigh enjoys still Finland challenges, recent the Despite recession. Russian the and industries paper and electronics of the decline the downturn, global the to due fallen has output and deteriorated has economy of the competitiveness the in 2009, started crisis financial the Since crisis. financial and economic global the preceding decade in the base economic Finland’s expanded and rapidly grew products technology high producing industries Electrotechnical 2000’s. early and late 1990’s the during economies competitive most world’s of the one into Finland transformed reforms structural and innovation growth, Strong rapid. very been has but countries, OECD other inmost than later inFinland started Industrialisation of decades. in amatter society welfare industrialised a modern, into itself transformed has which economy, stable and well-functioning open, is an Finland 1.1 structure The of the economy economy1 TheFinnish oil prices, as well as the declining exports to Russia. to exports declining the well as as prices, oil in 4% some by in 2015, decrease the to due mainly further decreased of exports GDP.38% volume Finnish of the The some for accounted 2014, In exports declined. has exports of share the and deteriorated, has production industrial of Finnish competitiveness however, international the crisis, financial global the Since 45% in 2008. some was GDP the of of exports share the highest, At its of 2000’s. years early and 1990’s in the economy Finnish of the growth strong the in role important played an Exports growth. on economic impact aprofound have in exports changes and is crucial, economy Finnish the for trade of foreign importance The services. estate real well as as communication, and information transportation, trade, include sectors service private important most The services. of all quarters three up make services Private GDP. annual of the thirds two some economy, representing Finnish in the sector biggest the currently are Services industries. electrotechnical and of forestry decline simultaneous the from suffered have sectors manufacturing Finnish the years, recent In 20%. some to fallen has GDP Finnish of the production of industrial share the Currently, production. total of the 30% for accounted production industrial economy. Finnish of the 2000, In years growth than thirds two of the Finnish “Services comprise more “Services GDP” Finnish foreign by trade target area decreased from 23.1% from in 2014 18.8% to decreased in 2015. shares The 21.5% (15.6% products of chemical in2014). proportion The to increased exports in 2015, of total share their and category product exported biggest the were products industry Forest exports. 28% total of the some represented goods 2014, In markets. investment target important many in conditions economic weak by depressed was goods investment for demand as difficulties, caused has exports in Finnish goods of investment bigshare the Also, industries. in exporting change structural the and competitiveness international of the deterioration the both by caused challenges faced have exports Finnish years, past the During 10 12 14 16 18 % 0 2 4 6 8

1995

1996 USA Sweden

1997 account for almost “Exports 40% of the Finnish GDP” 1998 Finnish economic structure, % structure, economic Finnish 1999 2000 2001 2002 The Netherlands Russia 2003 ■Privateservices on ■Publicservices ■ManufacturingConstructi production ■ Primary 2004 2005 2006 2007 2008 Germany Germany 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 Source: FinnishCustoms 2009 2010

2011 0 2012

2013 10 2014

2015 20 30 40 Finnish sector by industry exports technology industry, which accounted for 43% of all service 43% for service of all accounted which industry, technology is information sector service exporting biggest The exports. 25% of all some represented 2014, In years. services recent in steadily increased has exports of all of services share The at 14.7% 13.5%, stable and respectively. remained equipment and machinery well as as products metal and of metals increased recently, and its share is currently some 7%. some is currently share recently, its and increased has exports Finnish the for country atarget as USA of the importance The earlier. years 10% two atonly some stood 5.9% in2015, was and years, having inrecent steadily declined has of Russia share The 14of some 10%, and respectively. shares with Sweden and Germany are countries target biggest in 2015. two The exports of 59% total for accounted which countries, EU other to go exports of Finnish majority The services. business-to-business well as as development, and of research licencing services, technology example, for include, services in 2014. exported Other exports 10 15 20 25 30 35 % 5 50 2000 Other products products Chemical industry products industry Forest products industry andtransport Machinery products Metal industry products industry Electric andelectronics

2001 60 2002 70 2003

2004 80 2005

2006 90 Source: StatisticsFinland

2007 100

2008 % 2009 2010 Source: FinnishCustoms 2011 2012 2013 2014 2015

9 1 The Finnish economy 10 1 The Finnish economy previous year. the to compared decrease to continued investments Private in consumption. increase the limited increases wage zero and unemployment increasing 1%.than taxation, Tightening slightly, only less by increased consumption private demand, of components year. other the Of previous the to compared unchanged remained 2015,In exports of Finnish volume the exports. Finnish for demand the decreased has turmoil economic global the period, same the During countries. peer most with compared of productivity development weak and costs in labour increase the to due mainly deteriorated, has industries exporting of Finnish competitiveness the crisis, financial global the Since drivers. global and domestic both by pressured been has economy Finnish the years, recent In of years. couple next in the so do to is expected not and of level 2008, peak the reached not still has of production volume absolute the this, to Due year. every decreased 2012 2014, and production total the 2010 2011 between and years but showed slight growth, by 8.3%, collapsed GDP the in 2009, crisis: financial global the since ever sluggish remained has growth GDP Finnish 0.4%. at some territory, positive slightlyin the land to estimated was In2015, growth GDP years. Finnish the in recent weak been has economy Finnish of the growth The 1.2 Outlook for the Finnish economy “Finnish GDP growth slightly“Finnish growth GDP positive in 2015” Private consumption is expected to continue increasing increasing continue to is expected consumption Private in 2016. 3-4% by grow to volumes construction forecasted group advisory construction of Finance’s Ministry the forecast, recent Inthe buildings. non-residential and residential both for up pick to expected also are volumes Construction facilities. production major in some investments its increasing is currently in particular, industry, 2-3%. Forest by increase to investments private expect economists The demand. ondomestic based mainly be will growth moderate 1-1.5%. of some The figures growth annual with forecasted, 2016For is 2017, and growth GDP slightly positive increase in imports. increase the by mitigated be to is expected of view, growth this point GDP the However, from countries. target important in many outlook economic improving an to due forecasted, economy. is 2017, For Russian of the growth increasing weakness continuing the in 2016, to, instance, for due growth significant show any to expected not are exports Finnish 1-1.5%moderately, some by annum. per unemployment and tightening tightening and unemployment growth limitedgrowth by increasing construction and industrial industrial and construction “Positive development in “Private consumption consumption “Private investments” taxation”

Photo: SRV decrease close to 9% by 2017. by 9% to close decrease will unemployment forecast, of Finance’s Ministry the to According development. show slight positive others while increasing, continue to is expected unemployment forecasts in some in unemployment: development the for predictions differing show somewhat institutes forecasting economic The outlook. economic in the concerns main of the is one unemployment structural inlong-term 9.6% in2015. rise The to increased has unemployment where markets, labour in the reflected are conditions economic challenging current The economy. Finnish onthe impact negative significant a have also might economy global inthe risks prevailing The productivity. and competitiveness enhance to required are actions determined but positive, turned be to economy Finnish the for prerequisites good are economy.the There for point turning 2016 essential an consider as Economists Unemployment rate, Finland –Euro area 10 11 12 13 14 15 16 % 6 7 8 9 GDP growth in Finland growth andGDP in the Euro area -10 -8 -6 -4 -2 % 1996 0 2 4 6 8

1997 1990 Finland 1991 1998 1992 Finland 1999 1993 1994 2000 1995 Euro area (19countries) area Euro 1996 2001 1997 Euro area (18countries) area Euro 2002 1998 1999 2003 2000 2001 2004 2002 2005 2003 2004 which reduced prices permanently during 2015. during permanently prices reduced which of many retailers, between competition increased to due importantly, more even but, demand, sluggish to due recently have decreased prices Food food. for prices decreased well as as mortgages of housing rates low interest include development price sluggish for contributors Other price. oil low is the of level prices of consumer development negative for reason single biggest The at -0.2%. territory, negative in the up end to reported 2015, In was increasing. inflation from prices prevent economy inthe capacity unused abundant and increases wage modest outlook, economic Weak reasons. low many for remain pressures Inflationary

2006 Source: Eurostat,OECD,IMF, MinistryofFinance 2005 2006

Source: Eurostat,Bank ofFinlandandStatistics 2007 2007 2008

2008 increase by 3-4% in 2016 and 2009 “Investments expected to

2009 **Forecasts *Preliminary 2010 2011 2010 2012 2011 2013 2014* 2012 2015** 2017” 2016** 2013 2017** 2014

2015 11 1 The Finnish economy 12 1 The Finnish economy Indebtedness ratio of Finnish households Finnish of ratio Indebtedness Key figures –Finnish economy Private consumptiongrowth Unemployment rate Inflation Change inexports GDP (changeinvol) 100 110 120 130 % 40 50 60 70 80 90 *Estimate 1995 1996 1997 1998 Volume index 1990=100, seasonally adjusted seasonally 1990=100, index Volume Main of components demand 1999 2000 2001 2002

2003 100 200 300 400 500

2004 0

2005 2008 2.1 6.4 6.6 4.1 0.7 1990 2006 2007 1991 2008 1992 -20.1 2009 Source: StatisticsFinland -8.3 2009 -2.7 1993 8.2 0.0 2010 1994 TotalExports demandConsumptionInvestment 2011 1995 2012 1996 2010 8.4 3.1 1.2 3.0 2013 6.2 1997 2014 1998 2015* 1999

2011 2000 2.9 3.4 2.0 2.6 7.8 2001 2002

consolidation is pursued in order to reduce the deficit. deficit. the reduce to in order is pursued consolidation fiscal substantial though even increase to continues debt government general the that means This decade. of the end the until negative remain is to likely and in 2009, deficit into turned budget government economy. The of the change structural the and conditions economic weak the to due years few past the during significantly increased have finances public Finnish by faced Challenges finances public 1.3 Finnish billion. €260 some to amounted of households assets financial The loans. is housing debt all 76% majority, some of vast The income. disposable of the 123.5% at €120 stood represents billion, which households Finnish of the of loans of 2015, amount total the quarter third of the end At the increased. thus has wealth net the and have grown, of households assets financial the time, at same the And, countries. other many with level compared at amoderate stands it still but years, in recent markedly increased has households of Finnish indebtness The 2003 2012 -1.4 1.2 2.8 0.3 7.7 2004 2005 2006

2013 2007 -0.5 -0.8 8.2 1.5 1.1 2008 2009 2010 2014 -0.6* -0.9* -0.7* 8.7 1.0

Source: Statistics Finland, Ministry of Finance of Ministry Finland, Statistics Source: 2011 2012 Source: StatisticsFinland 2013 2014 0.4* 2015 -0.2 1.3* 0.4* 9.4 Q3/2015 *Estimate **Forecast *Estimate 2016** 1.8 1.2 0.8 0.9 9.4 2017** 1.4 1.2 2.9 0.8 9.0 in June 2015.in June conclusion same the to came also Commission European The criterion. deficit EU the meet is likely to Finland Therefore, in 2016. deficit the contract to enough be will programme government’s current inthe announced measures savings in late2015, published the forecast of Finance’s Ministry the to in 2015. also According threshold the above in2014, time remained and first the for value reference 3% the exceeded deficit government general Finland’s unemployment. of costs public increasing to due show deficit funds security social Other environment. investment achallenging and out paid pensions of amounts increasing both to due decreased has surplus However, income. this investment and workforce Finnish of the payments pension both from revenue constant their to thanks in aslight surplus remain funds related pension funds, security social the Of decade. of the end the until so remain to is expected and negative turned also has balance government Local revenue. in tax fluctuations cyclical to sensitivity its to due years in recent development negative most the shown has government central areas, three these Of funds. security social and government, local government, of central consists in Finland government General Key figures measured in terms of national accounting in ratio to GDP, to ratio in % accounting national of terms in measured figures Key governmentfinances General Central government debt (% of GDP) (% of debt government Central governmentGeneral debt (% of GDP) -other social security funds social security -other -earnings-related pension funds pension -earnings-related government -local government -central GDP) (% of lending Net GDP) (% of governmentGeneral expenditure GDP) (% of Taxes and contribution social security Photo: SRV 2012 56.1 52.9 42.0 42.7 -3.6 -2.1 -2.4 -1.1 0.2 2013* 43.8 44.3 55.6 57.6 -3.6 -2.5 -0.7 1.8 0.0 the rapid increase in the debt level in recent years, Finnish Finnish years, level in recent debt in the increase rapid the Despite debt. in public increase an to lead has deficit The growth in output exceeding the increase in taxes. in taxes. increase the exceeding in output growth expected of the because but measures, of fiscal easening any of because –not slightly decrease to is expected rate tax total the GDP. of the years, 44.5% coming the In some to rate tax the increase to expected was billion, €3 which by some burden tax the increased economy. 2015,measures In fiscal public the balance to in order taken being are actions Fiscal decade. of the end the by 67% some to grow to forecasted GDP to ratio the and years, coming in increasing continue to is expected debt of public amount The countries. EU other in most than lower clearly remains thus debt government of general amount The 62.6%. in 2015, at GDP some of the ending of 60% threshold the exceeded only debt of government amount The comparison. in international strong relatively still are finances public 2014* 58.2 43.9 46.4 59.3 -0.3 -3.9 -0.8 -3.3 1.7 expected to fall below the 3% ”General government”General deficit Source: Ministry of Finance, Budget review 2016, January January 2016, review Budget Finance, of Ministry Source: threshold in 2016” 2015** 48.5 62.8 44.6 59.1 -0.5 -3.1 -0.9 -3.3 1.2 2016** 44.5 64.9 49.9 58.7 -0.2 -0.9 -2.9 -2.9 1.1 *Estimate **Forecast *Estimate 2017** 44.2 58.3 51.3 66.6 -0.8 -0.1 -2.6 -2.7 1.1 13 1 The Finnish economy 14 1 The Finnish economy society. As a result, government expenditure as a share of ashare as expenditure government aresult, As society. welfare social Finnish of the cornerstones the are funding tax and responsibility public Extensive categories. income in all used is widely which provision, day-care municipal and families all for allowances of child forms in the families for support social well as as healthcare, and education free instance, for including, services, of public supply on comprehensive based is largely society welfare Finnish The allowances. unemployment and benefits leave in annual power, own in its likecuts actions introducing by forward go to plans has government the Therefore, in Finland. unions of labour position strong the of because implement to difficult extremely be to proven have, however, measures These hours. working annual the by, prolonging costs, instance, for labour decrease would that measures through industries of Finnish competitiveness international the enhance to aims also government The services. in public changes structural significant and measures fiscal determined both through economy public the at balancing aims government current The parties. parliamentary biggest three the by formed was government 2015, inspring the and elected was parliament new The Photo: City of Helsinki / Tero Pajukallio ”The government”The aims at introduced several fiscal decreasing labour costs” ”The new government”The actions in 2015” in actions Parliament during spring 2016. In the current plan, the 2016. current In the spring during Parliament the to advance already, to is now set years several for policymakers the among debates serious caused has which reform, The services. healthcare and ofsocial provision and management of the restructuring is the agenda government’s current in the reforms significant most of the One finances. public of Finnish sustainability the in ensuring essential are responsibilities municipalities’ in the reforms structural Therefore, services. inhealthcare burden cost the increases which population, ageing and balance migration negative with municipalities smaller by the faced are challenges economic biggest the municipalities: of the size of the development in the seen are differences Significant position. financial and structure economic size, their to regard with significantly other each from differ Municipalities 313 in Finland. municipalities currently are There services. social and healthcare education, of, instance, for majority the for responsible are Municipalities level, in municipalities. local at the out is carried welfare of social provision actual the of most and implementation, their monitors and welfare of social principles basic and framework the sets government central the system, Finnish Inthe services. in public role asignificant have currently municipalities Finnish production. 58% of total some for accounts and OECD, in the highest is the GDP the population. population. the of expectancy life World War increasing the well as as II, after born generations baby-boomer of the retirement the of because rapidly is deteriorating 17%, ratio 23%. to The of level current its from increase will 15–64) aged those to over 65 and aged (the of those ratio ratio dependency age old- the 2020, By EU. the within unfavourable most of the is one pyramid age Finnish economy. Finnish the The facing challenges main of the is one population ageing rapidly The billion. €6.5 some be to is estimated of which value the properties, healthcare of public financing and ownership the impact also would reform planned The providers. service healthcare for systems information improved and digitalisation well as as competition, increased management, centralised through increase to is expected services of the Productivity providers. service sector private and public between citizens for of choice freedom increased well as as costs increasing the over control improved include reform of the objectives main The defined. be isto yet regions of these financing and governance of the of 2019. details The beginning in the 18 to regions self-governing municipalities the from moved be will services of healthcare responsibility ”A major reform in healthcare and social services isand social services underway” funding at a very low cost. low cost. at avery funding acquire to able be to continues government Finnish the rates, low interest and ratings strong the to Due burden. debt increasing and deficit fiscal the well as as growth economic low included revision this for in 2015. reasons main The negative to rating on Finland’s outlook their revised agencies However, category. all AAA best in the rating Finnish the have, far, kept so Fitch both and at AA+. Moody’s remains rating credit &Poor’s Standard strong. remain Finland for ratings credit long-term the deterioration, recent the Despite markets. of labour flexibility the increasing and leaves parental cutting benefits, unemployment reducing by employment boosting instance, for include, recommendations These competitiveness. and productivity revive to in order actions several recommended however, OECD report, recent its In of citizens. welfare overall well as as economy of the competitiveness the regarding indicators at various looking rankings international in many position good its retained has Finland conditions, challenging years’ few past the Despite competitiveness 1.4 Finland’s international Photo: SATO / Tuomas Uusheimo actions to boost productivity actions to productivity boost ”OECD recommends several”OECD and increase employment” increase and report. latest in the ranking of the deterioration the for reasons main the also are which markets, labour of its inflexibility the and conditions, macroeconomic weak size, market small the include weaknesses Finnish innovation. well as training, and education of higher pillars the in position second holds It also education. primary and health well as as framework institutional of its functioning the for highly is appreciated Finland ranking, In the countries. Nordic other of that the than slightly higher remains still position Finland’s in 2014. place ranking, this In in fourth been having after countries, 140 the evaluated among eighth 2015, ranked was Finland in September published Report, Competitiveness Global World Forum’s latest In the Economic ”Finland’s long-term”Finland’s credit Economic Forum’s Global Competitiveness Index” Competitiveness 8 ratings remain strong” remain ratings th ”Finland was ranked was ”Finland in the recent World 15 1 The Finnish economy 16 1 The Finnish economy as weaknesses of Finland. weaknesses as regarded commonly are regulations labour restrictive and rates tax high Also, market. of the size small the with deal mostly in particular, perspective a business from Finland, of characteristics not-so-positive The living. and business for support favourable provide healthcare and education high-quality and framework regulatory stability, transparent economical and political where economy welfare Nordic a respected as reputation Finland’s illustrate rankings These countries. other from winners the differentiating factors the as of institutions transparency and positions inpublic of those behaviour the governing rules systems, information to access strong identified report The Denmark. after second place, one by ranked ranking its 2015 for improved Index Finland Perceptions Corruption Global International’s Transparency In world. in the countries corrupt least of the one as known is widely Finland balance. life work- and security personal quality, environmental system, education of the accessibility and quality the example, for include, of Finland strengths the comparison, this In areas. assessed well in most performs Finland Index, Life Better InOECD’s countries. in various of living quality the comparing well in reports ranks typically Finland flexibility. market labour and of companies productivity instance, for through, is evaluated which efficiency, business emphasises ranking This place. 20th achieved of 2015, Finland Ranking World IMD’s Competitiveness In among the 102 markets worldwide. Finland has consolidated consolidated has Finland worldwide. 102 the markets among 9th in 2014, Finland published Index, ranked Transparency Estate Real JLL’s world. in the Global transparent most of the one as is regarded market property Finnish The institutional framework and strengths of thestrengths Finnish stability seen key as are The mostThe competitive national economies in 2016 (ranking in 2015) ”Well-functioning ”Well-functioning economy” The Netherlands(8.) United Kingdom(9.) United States(3.) Switzerland (1.) Hong Kong(7.) Singapore (2.) Singapore Sweden (10.) Germany (5.) Germany Finland (4.) Japan (6.) 5.0 5.1 5.2 5.3 of Helsinki suffers from Finland’s weak economy and close close and economy weak Finland’s from suffers of Helsinki ranking year. The previous the to compared improvement slight showing prospects, development and in investment 16th held the position Helsinki ranking this In Helsinki. than positions in higher ranked were Copenhagen and Stockholm both although countries, in Nordic interest investor renewed 2016 showed Europe Estate Trends in Real Emerging report Institute’s Land Urban and PricewaterhouseCooper’s ranking. in this markets transparent” “highly the among position its regions suffering from negative migration. negative from suffering regions in provision service of public maintenance for, instance, for challenges the increases which population, working-age or young the towards weighted are moves Within Finland, immigration. and migration internal of both aresult be will and been has urbanisation Increased people. 500,000 by 400,000- grow to – is estimated inhabitants more or 90,000 –with regions city 14 of the biggest population the 2030, By future. inthe also continue to is expected cities main the to population of the concentration The jobs. of all 70% and 75% GDP Finnish of the represent areas city biggest 14 The cities. in main is concentrating activity Economic regions. city in 10 lives biggest currently population Finnish of the 60% inhabitants. 645,000 by increased areas in urban living population the period, same the During 70%. almost to increased has 2014, by and proportion the areas, inurban lived population Finnish of the 60% some 1990, In fast. proceeded has but late in Finland, relatively started Urbanisation 1.5 Main regions city in Finland sector. property residential in the especially Helsinki, for prospects the enhances urbanisation increasing However, Russia. performing badly with links trading 5.4 5.5 population lives in urban ”70% of”70% the Finnish 5.6 GCI 2016score Source: World EconomicForum 5.7 areas” 5.8 whole country. whole 1.2% only of the represents only area land the as even jobs 31% and 36% GDP of the 26% population, of the of all some represents currently region Helsinki 1.8 The million. 1.7- to increase to is forecasted population the 2050, By 1.4 some inhabitants. accommodates currently which region, Helsinki inthe fastest be to is expected and has Growth Main regions city in Finland NLS’s permission is prohibited. Additions to the map by KTI. 2/2016. KTI. by map the to Additions prohibited. is permission NLS’s without data the Copying 2010. FInland of Survey Land @ National © OpenStreetMap contributors http://qgis.osgeo.org Project. Foundation Geospatial Source Open System. Information Geographic QGIS 2015, Team, Development -QGIS 2.12.2 QGIS using created Map Share of population living in urban areas 10 20 30 40 50 60 70 % 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 inhabitants by 2040. by inhabitants 625,000 of some increase an as result and accelerate, to is estimated regions 14 to city main migration scenario, “urbanisation” Inthe structure. regional oncurrent based are estimates growth population scenario, “conservative” the In 2040. by 5.8 million to grow to is estimated population the scenarios both In scenarios. different ontwo forecasts its bases of Finland Centre Technical Research VTT the 2040, by demand onresidential study recent its In decreased. has apartments large and houses family single- for need the whereas markets, housing rental and in owner-occupied both increased has apartments located well- small, for demand The in Finland. markets housing on impact aprofound have preferences in housing changes and development demographic urbanisation, Increasing Residential demand in main regions city areas. populated sparsely and distant of more cost at the areas city central of the attractiveness increased an as materialised years in recent has urbanisation regions, Within city the 2005 would annually. needed be dwellings 2,500 afurther 30%, by increase is to immigration If of level immigration. current onthe based are forecasts These on average. annum per dwellings 4,500 of some 1991 2015, and increase an between mean would this volumes construction with comparison In annually. needed be would dwellings new 29,000 almost where regions, 14 city main in concentrate would dwellings new for need likely –the is more VTT to according –which, scenario latter the In 2006

2007 housing demand in main city

2008 ”Urbanisation increases 2009 2010

2011 regions” Source: StatisticsFinland 2012 2013 17 1 The Finnish economy 18 1 The Finnish economy all starts. of 40% for accounted which area, metropolitan Helsinki in and starts, of all 68% some comprised which houses, onapartment concentrated was development New dwellings. 30,000 some to amounted and significantly increased starts construction in 2015, developers: residential by apprehended been have to seems need increasing The increase. of the half almost represent would alone region Helsinki cities. largest the towards weighted heavily be would demand inresidential increase the scenario, urbanisation the In Need forNeed new dwellings by 2040 Significance of 14 regions biggestcity in Finland, %of total Completed dwellings (2010-2014) dwellings Completed Research and development expenditure (2013) GDP (2012) GDP Private-sector jobs (2013) Jobs (2013) Jobs 1991-2015 Housing units Population (2014)Population 2016-2040 2016-2040 region challenges residential ”The growth of Helsinki growth ”The regions Geographical distribution of housing production in main city development” 2% 1% 2% 2% 2% 3% Built Dwellings Built Urbanisation scenario Urbanisation Conservative scenario 2% 3% 3% 25% 1991-2015 5% 6% 7% 30% 9% 618,200 815,000 760,500 By 2040 By Helsinki region Mainland Finland 43.9 33.5 34.9 31.8 35.7 27.1 ■ Other ■ Kouvola ■ Pori ■ Lappeenranta ■ Hämeenlinna ■ Joensuu ■ Lahti ■ Vaasa ■ Seinäjoki ■ Kuopio ■ Jyväskylä ■ Turku ■ Oulu ■ Tampere ■ Helsinki In one year one In 32,600 30,420 24,730 New construction starts 2000–2015 starts construction New 10,000 15,000 20,000 25,000 5,000 0 The regions of Tampere, Tampere, of regions The

3% 2000 2% Apartment buildings Apartment Row houses Single-family homes 2% Turku and Oulu Oulu Turku and 2% 4% 2001 7% 2% 612,000 By 2040 By 527,800 719,700 2% 9% 1% 2002 22.4 31.3 17.4 17.4 17.4 17.7

1% 2003 2016–2040 0% 11%

5% 2004

14 biggest city regions city biggest 14 2005 2006 In one year one In 48% 2007 24,480 21,110 28,790 2008 14 biggest city regions city biggest 14 Source: RT 2009 Source: Statistics Finland Statistics Source: 2010 Source: StatisticsFinland 88.3 68.0

2011 79.5 71.7 74.0 74.1 2012 Share 85% 95% 75% 2013 Source: RT RT Source: 2014 2015 In practice, it is very common for property ownership to to ownership property for common it is very practice, In of Finland. Survey Land National the by published and registered are and in nature public are transactions These procedure. aspecific to according out carried be to have that acts legal official are property real with Transactions Offices. Survey District regional by maintained Register Land the with registered are agreements lease land and ownership Direct municipality. the typically landowner, the with agreement lease along-term have and building the only own to possible It is also ownership. property direct of form basic is the This onit. buildings the and land the owning means inFinland property owning terms, juridical In 2.1 Two ownership forms of property market property of theFinnish 2 Institutionalaspects regulates, for instance, long-term planning of repairs and and of repairs planning long-term instance, for regulates, Act company. the for The framework regulatory the as (osakeyhtiölaki) companies limited for legislation normal the or Act Companies Housing the apply to either choose can shareholders property, commercial for company estate real amutual establishing When use. residential for is designated building of the area of the 50% than more when applied always are regulations These (asunto-osakeyhtiö). sector housing inthe operate that companies estate real mutual regulate Decree and Act Companies Housing The properties. commercial and residential in both used is commonly of ownership form This kiinteistöyhtiö). keskinäinen (“MREC”s; companies estate real mutual called are of companies types These premises. of these occupancy and control physical to shareholder the entitling property, onthe of space apartment/amount aspecific to connected be may shares The shareholders. company, several limited or is the one have may which estate real of the owner legal the cases, these In property. the of owning purpose sole the for company) founded housing (a estate/ company a limited real through organised be Photo: SATO The other type of real estate company is a standard limited limited is astandard company estate of real type other The lender. original the to loan the covers then which company, mutual the to (rahoitusvastike) charge a finance pay shareholders the cases, these In collateral. as estate real and building the use and modernisation, and renovation for example, for a loan, out take also can itself company The shareholder. each for designated area floor on the based typically is most fee This shareholders. the from fee amaintenance it collects which for facilities, of joint upkeep and property of the management the for is responsible company housing or estate real mutual The loans. for collateral as company in the shares their use can Shareholders shareholder. the to directly goes flow cash rental the and tenant, and shareholder the between made are agreements rental companies, estate real In mutual shareholders. of responsibilities and procedures decision-making as well as shareholders, to plans of those communication the shareholders. its to dividends out pay can company estate real The income. rental the with it covers which costs, operating and maintenance for is responsible company, company the and the and tenant the between made are agreements Rental premises. specific any to connected not are shares the companies, Inthese properties. or property acertain owning of purpose the for founded (kiinteistöosakeyhtiö), company ”In MRECs, rental agreements shareholder and the tenant” the and shareholder are madeare the between 19 2 Institutional aspects of the Finnish property market 20 2 Institutional aspects of the Finnish property market with most other countries. other most with compared restrictions few very has legislation the there, even but tenant, the protect to exist restrictions some do market residential in the Only ifagreed. possible are clauses break and renewal, for rights automatic no are there regulated, is not indexation terms, lease maximum or minimum no are There parties. two between of agreement freedom full of idea onthe is based world and inthe liberal most the is among agreements rental regulating legislation Finnish registers. company’s in the shares of the owner the as registered be can purchaser the settled, been have taxes transfer as soon simple. 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Rent adjustment, tenant mix changes, changes, mix tenant adjustment, Rent contract. the terminate to cause however, acceptable must, an have landlord The spaces. smaller and buildings office in multi-tenant popular especially are terms lease indefinite These months. twelve or six three, is typically which period, notice agreed an it after terminate to wishes landlord the or tenant the either until is valid contract indefinite an notice”: further is “until agreements lease in Finnish term A common conditions. and onterms agree to freedom parties gives leases regulating legislation liberal The market. property commercial Finnish in the vary practices Rental practices Rental market. in the services of these supply increased in an resulted has This together. – working advisors tax and financial technical, –legal, of experts types several typically with processes, diligence due to approaches new about brought has investors of international entry Market limited. more is typically role advisor’s the parties, domestic two between out carried transactions and assets developed newly transactions, asset In single procedures. diligence due thorough implement and expertise, finance corporate and advisory extensive use typically parties the transactions, portfolio large In involved. of companies type and asset the of characteristics situation, onthe depending varies process typical in thetypical Finnish office ”Indefinite lease are terms markets”

Photo: SRV regarding the space they use. The owner is responsible for repair and replacement costs if caused by normal wear and tear. tear. and wear normal by caused if costs replacement and repair for agreements responsible is cleaning and owner The use. they electricity space own the their have regarding tenants and building, the of areas public the for responsible regards With typically disposal. is owner waste the and water electricity, heating, and with cleaning case to the also is This responsibility. owner’s the are maintenance and building the of management that areas means outdoor This and owner. the by indoor paid both are for costs expenses operational and taxes property insurance, rent, land the where are rents 1 Gross Agreements is common. more or years of ten lease a net building, office single-tenant a purpose-built, For applied. For larger units, longer fixed-term agreements are commonly it. terminate to wishes party one –until period notice agreed an –with period indefinite an for automatically continues then which lease, onafixed-term agree to common is also it market, property commercial the In years. five to three is from term fixed a typical buildings, office In multi-tenant practices. international with compared short quite typically are periods contract the used, are terms fixed Where of moving. costs the and premises new for of searching cost the pay to willing not are tenants turn, In tenant. anew for of searching cost the and vacancy avoid to periodic wants landlord the part, its For market. in the fluctuations temporary tolerate typically parties both as periods, long for last often leases Indefinite is 52%. share their area, space total by Measured indefinite. are area metropolitan in Helsinki agreements office of all 64% some of agreements, number the by measured database, rental KTI’s In termination. lease justify to used conditions the among are portfolio property of the rearrangement or area, metropolitan Helsinki inthe agreements lease office of Distribution Photo: SRV 57% sqm 26% 17% ■ Untilfurthernotice ■ Fixed+untilfurthernotice ■ Fixedterm Source: KTIRentaldatabase includes net rent plus a service charge covering typical typical covering charge aservice plus rent net includes which rent”, “gross for are Traditionally, agreements rental exercised. are that options of different however, are, avariety There renewal. lease a to right statutory no has atenant example, –for market property commercial inthe limited quite are Tenants’ rights years. 20 to of up terms lease have often arrangements, leaseback sale-and- in, example, for buildings single-tenant in large typically called a “shared rent”. These kinds of agreements of agreements kinds These rent”. a“shared called typically is of agreement kind This tenant. the to separately cost maintenance the recharges landlord the cases, In some charge. service (net) aseparate well as base as the rent includes rent total the cases, these In tenants. to offered services of business amount a varying include typically agreements lease the parks, business as such types, property specific In some rent. gross for are database rental KTI in the agreements of office 80% some of agreements, number by Measured types. property in all buildings in multi-tenant common repairs. minor and costs operating number of lease agreements lease of number area, Helsinki metropolitan the in agreements lease office of Distribution 69% 15% 16% ■ Untilfurthernotice ■ Fixed+untilfurthernotice ■ Fixedterm 1 Gross rents are very very are rents Gross Source: KTIRentaldatabase 21 2 Institutional aspects of the Finnish property market 22 2 Institutional aspects of the Finnish property market External External repairs Internal repairs Rent Indexation review Building Building insurance

Rental turnover rent for Basis payments Property Property taxes a regional land use plan, a local master plan and detailed detailed and plan master plan, alocal use land a regional plans: use levels of land three has system The Act. Building and Use Land the by is regulated in Finland use Land Planning 2.3 things. other among improvements, tenant and increases rent stepped periods, rent-free offer to tend levels, landlords rent the decreasing than Rather demand. weakening with coincided has supply in increase when years, in recent markets office area metropolitan Helsinki inthe instance, for seen, clearly been has This applied. be can tenants retain and attract to means various situations, over-supply and downturns market In cash-flow. their for base a stable secure to low, wants quite landlord the as typically is rent of the part However, turnover-based the turnover. of share agreed an by supplemented rent base minimum of a consist usually they and centres, in shopping used commonly notvery but sometimes, are rents Turnover-based indexes. cost operating to rents their index to tend landlords some inflation, overall than rapidly more increased have costs operating as years, recent In index. used commonly most is the Index Price Consumer The years. three exceeds term the where leases fixed-period in and leases indefinite in all freely indexed be can Rents parties. the between freely agreed be can refurbishments and insurances taxes, for responsibility the rents, net In costs. maintenance for is responsible tenant the where rents, net apply to common it is more buildings, single-tenant In savings. energy towards parties both motivate to well as as landlord, the and tenant the between fairly cost energy things, other among of, risks and benefits the share to attempt they leases”, as of “green form basic the as popular more becoming are monthly published are index Finland) cost-of-living the of figures (Statistics point the and index. price series the consumer the as interrupt user’s not time do the same From the at index. revisions index because one, cost-of-living the to usable tied most the is usually are index land, or premises cost-of-living the business point, dwellings, on development, its those as and =100) such 2000 index rents, Many price index. consumer price (currently consumer the index price follows consumer therefore, latest the from calculated series time along is =100 1951:10 index cost-of-living The term Lease Sector Typical leasing in practices Finland ”Tenant’s position is in strong

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securities Transfer tax, companies real estate of mutual tax, shares Transfer real property Transfer tax, property Tax onreal VAT tax rate Capital gains rate tax Corporate 1.6% 2% 4% property) (residential 0.37–0.8% 0.8–1.55% 24% €30,000) exceeding income (34% on 30% 20% T ax rate Source: Finnish Tax Administration, www.vero.fi Tax Administration, Finnish Source: subject totransfertax. housing company arealways are non-residents.Sharesina both thesellerandpurchaser through thestockexchangeorif exempt if the transfer takes place Transfer ofsecuritiesistax- shares. (gross) transactionpriceofthe Tax iscalculatedonthetotal company. of a(mutual)limitedreal-estate outby carried sellingtheshares The majorityoftransactionsare the land. separately forthebuildingand of property. Taxable valuedefined Depends onmunicipalityandtype (0%). andperiodicals newspapers cultural events, etc.(10%);and medicine, books, transportation, (14%); and cateringservices Special ratesforfood, restaurant companies, etc. company shares, sharesinlisted securities suchashousing real property, buildings, Levied onprofitsfromselling Tax ratedecreasedin2014. Note

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Varma. from portfolio property retail million €200 anearly bought company the foundation, its Upon Redito. company management Swedish the with together Ratos, firm equity private Swedish a and Varma by owned Properties, Serena firm investment property of aNordic foundation the was transaction largest third The Ilmarinen. from portfolio million office €400 a bought which and AMF and of Ilmarinen joint venture Oy, established is anewly which Management Antilooppi by out carried was transaction major company.the Another of shareholders the are Kesko and Pensionsförsäkring AMF Swedish the Ilmarinen, insurer Pension Kesko. to rented portfolio property retail million a€650 Oy, bought who Kiinteistöt Ankkurikadun company property established by a newly out carried was year of the transaction biggest The partners. international with together companies venture joint established institutions domestic where transactions portfolio large bysome characterised was year The at high, 66%. remained transactions of all share investors’ year. Domestic previous the to of 27% compared increase an represents and ever volume annual in 2015,billion highest second is the which €5.5 exceeded market Finnish in the volume Transactions 3.1 Investment market in 2015 players volumes, and structure investment market: property 3 TheFinnish 27% in 2015 compared to the ”Investment by rose activity Transactions volume market in the Finnish property previous year” 0 1 2 3 4 5 6 7 1000 MEUR 2.01 0.01 International buyer■Domestic ■ International 2001 1.65 0.36 2002 1.03 1.59 2003 1.30 1.90 2004 1.07 1.71 2005 2.56 2.88 2006 3.82 2.47 2007 2.34 1.81 2008 in 2015 with a share of some 32% of the total volume. volume. 32% of some total in 2015 of the ashare with sector property traded most the were properties Retail Sponda. from portfolio logistics a€100 bought Logicor Blackstone’s Group. Posti from portfolio property alogistics bought who &Partners, Risan Ness, Norwegian the well Varma, as as from portfolio retail €190 an million acquired who Properties, Serena domiciled Swedish- the include newcomers largest The market. the entered year, the players in 2015.11 During foreign new €1.2 some by billion in Finland investments their increased thus investors Foreign million. €640 some to amounted investments of international Sales volume. transaction total of the third one for accounted investors Foreign of all transactions. transactions. of all 23% some for accounted properties residential and office in2015, and, years, both inrecent rapidly increased has market transactions in the position properties’ Residential 0.29 1.47 2009 0.73 1.65 ”Several new foreign investors”Several

2010 Finnish market”The property entered the Finnish market in 1.33 0.45 produced a total return of produced atotal return 2011 1.66 0.48 2012 6.3% in 2015” 0.70 1.81 2013 1.49 2.85 2015” 2014 1.87 3.65

Source: KTI 2015 properties only increased by 0.3% on average in 2015. 0.3% by onaverage increased only properties of investment values market Index, KTI the to According transactions. sale-and-leaseback corporations’ some well as as portfolios in investors’ properties developed newly both of aresult was size market in the increase The euros. billion of 4.4 agrowth 2014, to represents this Compared billion. €54.5 some to amounted market investment property of 2015, end professional At the Finnish of the size the structure Ownership 3.2 development. of negative years four after positive slightly turned return Capital index. in the properties of weight residential increasing well as as of offices, rates occupancy and rents decreasing both to due percentages, 0.2 by 2014, to decreased income net the Compared 6.0%. of income anet of 0.3% and growth of acapital consisting in 2015 6.3% to (5.6% amounted in 2014), market property Finnish onthe return total the Index, KTI the to According all transactions % of 2005–2015 type, Distribution of transactions by property 100 % 20 40 60 80 0 Care property ■Other property ■ MixedCare ■IndustrialHotelResidential ■ RetailOffice

2005

2006 Direct property investments in Finland 2011-2015, billion Finland in EUR investments property Direct investor group investment structureThe of Finnish market property by 2007

2008

2009 10 20 30 40 50 60

0 2010 ■ RealestatefundsCharities,endowmentsandother companies companies■Non-listedproperty ■ Listedproperty investors ■ InstitutionalinvestorsInternational 2011 2011 15.4 9.0 5.2 6.5 5.7 2012

2013

2014 2012 Source: KTI 16.2 9.0 5.4 7.6 6.3 2015 2013 16.2 9.3 5.6 8.4 7.1 Pension insurance companies and other pension schemes schemes pension other and companies Pension insurance investors Institutional properties. educational and healthcare instance, for including, properties, use public some also cover to expanded has market investment the years, In recent portfolios. in investors’ centres shopping developed newly to well as as deals sale-and-leaseback significant some to due increased has share properties’ Retail sectors. in other increase the and performance investment weak their both to due years in recent decreased has of offices share The 26%, ofrespectively. 29 and shares with markets investment in the sectors biggest the are properties retail and office properties, commercial the Of at 29%. stable remained share properties’ residential rental market, investment total the Of years. in recent markedly portfolios their increased have investors international well as as funds and companies property domestic including groups, investor other whereas portfolios, property in their investments direct of domestic weight the decreased have of 2014. end at the Institutions 32% to compared it decreased 29%, although large, remains universe investment total of the share investors’ Institutional The occupational pension scheme receives the bulk of the of the bulk the receives scheme pension occupational The insurance. pension employment-based and regime pension public of a basic is a mixture system pension Finnish The billion. €3.5 by increased of assets 2015, amount total the of quarters three first the of 2015. During quarter third €176 some to amounted of the billion at end the schemes pension occupational statutory the administering funds and companies insurance of pension investments of the value total the TELA, Pension Alliance Finnish the to According companies. insurance other and funds life include markets institutional in the participants Other universe. investment institutional Finnish of the majority the form 16.0 2014 property market by 9%” grew property 9.8 5.6 9.9 7.5 ”In 2015,”In the Finnish invested 15.6 2015 11.9 5.8 11.1 9.1 Source: KTI 29 3 The Finnish property investment market: volumes, structure and players 30 3 The Finnish property investment market: volumes, structure and players slightly higher investment returns. investment slightly higher as resulting exposure, equity alarger have typically They allocations. and strategies investment havedifferent thus and institutions, sector private than framework solvency different a under operate institutions pension sector public Finnish out. paid pensions the with in balance is, long-term, in the system pension Finnish of the financing study, the arecent to According years. 20 past in the onaverage annum per 4.2% to amounted has investments institutions’ pension sector on private return real the TELA, to According investments. on return real of a3.5%annual assumption onthe based are flows money pension long-term on the Calculations contributions. incoming exceeding out paid of pensions amount the and oninvestments returns negative both to due decreased, of assets of 2015, amount total the quarters third and second the During investments. existing on onreturns based currently is thus assets investment funds’ in pension increase The contributions. of annual amount the than is now larger out paid being of pensions amount the generations, 1940s the from of people numbers of large retirement the to Due assets. investment institutional Finnish of the basis the form past inthe collected reserves The system. pension Finnish inthe role asignificant have not do insurance, pension individual or agreements market onlabour based systems, pension Supplementary employees. and employers both by paid are Pension contributions employers. by organised foundations and funds pension companies, insurance by pension is administered and contributions pension annual fair values of the properties at the end of 2015, of billion EUR end the at properties the of values fair holdings investorsDirect of property in 30 biggestproperty Finland OP Insuranceandpensioncompaniesfunds Oct/Nov 2015 *Press releases Ilmarinen MutualPensionInsuranceCompany LocalTapiola andLocalTapiola’s Group funds Varma MutualPensionInsuranceCompany Etera MutualPensionInsuranceCompany Bank of Åland Residential Property Fund Bank ofÅlandResidentialProperty Elo MutualPensionInsuranceCompany Nordea LifeAssuranceFinlandLtd Nordea Aberdeen AssetManagement Aberdeen Ankkurikadun KiinteistötLtd Fennia Group andFunds Fennia Group RBS Nordisk Renting RBS Nordisk Forum FastighetsKb Forum CapMan RealEstate Wereldhave Finland ICECAPITAL REAM SATO Corporation Union Investment Technopolis Plc VVO Group Plc VVO Group Sampo Group Sponda Plc Citycon Plc Antilooppi AB Sagax Avara Ltd Logicor* Exilion NIAM Keva 0,0 Non-listed property companies/funds ■ Non-listedproperty ■ Institutionalinvestors 0,5 1,0 1,5 at the end of 2014). The majority of foreign investments investments of 2014). end at of foreign the majority The billion (€2.7 billion €2.9 to amounted investments property of 2015, of foreign amount the quarter third of the end At the in Finland. investments 28% of all some representing class, asset biggest is the property investments, domestic their Of in Finland. invested are investments property majority, €13.6 vast institutions’ of billion pension The billion. €0.5 by decreased investments of 2015, of property amount the beginning €16.6 the to Since billion. 9.4%,was amounting portfolios institutions’ pension Finnish in the investments of 2015, of property share the quarter third of the end At the instruments. market money and in bonds invested were 43% assets Some of the investments. equity other or shares in listed invested were assets institutions’ of 2015, 47% pension of the quarter third of the end At the funds. pension specific industry or company smaller several are there addition, In Pension Fund. State and Keva funds, pension major two are there sector public the In Veritas. and Elo, Etera Varma, Ilmarinen, companies: major five currently are There sector. pension private the in players biggest the are companies Pension insurance International investors ■ International companies ■ Listedproperty Source: KTI(queryforinvestors,pressreleases,annualreports) 2,0 9.4% of pension institutions ”Property represents some ”Property investment portfolios” investment 2,5 3,0 3,5 4,0 shares in SATO, which made the Swedish listed company the the company in SATO, listed Swedish the shares made which Ilmarinen’s also bought Yield Balder buyer. the OP-Rental was fund adomestic where dwellings, rental 1200 comprising portfolio property residential of a large a sale completed also Oy, Ilmarinen Antilooppi and Oy Kiinteistöt Ankkurikadun of foundation the in 2015. to addition In restructurings and transactions large in several player amajor was Ilmarinen 2015. of €3.9 atbillion end to the of amounted Varma investments property total, In Logicor. Blackstone’s to of Certeum shares of its half and Balder SATO company Swedish the to company in residential holdings its selling by transactions major in two portfolio indirect domestic its lightened also In2015, companies. and Varma funds property to assets selling by structures indirect into investments property its of parts In 2014Finland. 2015, and transferred has Varma in investor property biggest second it the makes which billion, €3.3 to amounts portfolio domestic Varma’s direct years. in recent portfolios in their restructurings major implemented have and investors, property major also are Both of billion, €41 respectively. €36 and portfolios investment total with sector, inprivate companies insurance pension biggest two the are Ilmarinen and Varma countries. Nordic in other mainly joint ventures, and co-investments including vehicles, other through abroad invest to started recently only have funds Pension area. euro the within funds property non-listed through invested are ”Institutions’ foreign property property foreign ”Institutions’ ”Ilmarinen and Varma have holdings into joint venture venture joint into holdings increasing in recent years” recent in increasing transferred their transferred direct investments have been Real estate exposure of the Finnish institutions structures” 13.5% 2.1% total valueEUR21.6bn 2015 12.3% 72.1% Source: KTI(queryfor investors,annualreports,KTIestimates) and 2015,and EUR billion 2014 of end the at properties the of values fair Finland in investors property holdingsDirect of property 10 biggest The third biggest private sector pension insurance company company insurance pension sector private biggest third The in 2015. billion €4.2 to increased portfolio investment property of Ilmarinen’s value total The million. €200 some of a decrease represents billion, which €3.0 to amounted portfolio property domestic direct of Ilmarinen’s value total company. in the of 2015, end At the shareholder the majority domestic investment. Keva is an active investor in non-listed in non-listed investor active is an Keva investment. domestic 75% billion,some €3 of which is direct almost was portfolio of 2015, property end At the of Keva’s value the portfolios. institutions’ sector private the from different is somewhat structure portfolio investment Keva’s framework, regulation solvency a different to Due billion. €44.2 to amounted portfolio of 2015, end At the investment of Finland. Keva’s Church Lutheran Evangelical the and governments local and state in the employed of people matters pension the handles which is Keva, sector pension in the player biggest The investments. domestic direct €2.1 are billion holdings, property the Of billion. €2.8 to amount holdings property its billion, and €20.5 of some portfolio investment atotal has Elo Pension Fennia. and fund pension of LocalTapiola merger the through of 2014 beginning in the established was is Elo, which investments ■ investments ■ investments ■ domestic Indirect investments ■ LocalTapiola Group Indirect foreign foreign Indirect foreign Direct domestic Direct Citycon Plc OP Group Ilmarinen Sponda Varma SATO Keva VVO Elo 0,0 ■ 20152014 0,5 1,0 1,5 Source: KTI(queryforinvestors) 2,0 2,5 3,0 EUR billion 3,5 4,0 31 3 The Finnish property investment market: volumes, structure and players 32 3 The Finnish property investment market: volumes, structure and players temporary legislation was introduced, whereby pension pension whereby introduced, was legislation temporary In2014, however, investments. anew in their leverage use to allowed typically not are funds pension Finnish investors. main are clients major their where funds, property unlisted launched also have companies These portfolios. investment property their manage to companies management separate founded have groups, LocalTapiola and OP instance, for institutions, main of the Some providers. to service outsourced often is most maintenance of property management The management. rental onin-house emphasis their increased thus have and in particular, interface tenant of their control retain to want institutions Many pursued. are strategies differing functions, management asset and of property organisation the In keptin-house. are functions management portfolio thus and themselves, by institutions made are decisions investment that requires legislation Finnish structures. company investment in jointventure restructured been typically have holdings property transactions, recent In funds. property domestic in most investors major are Pension institutions companies. of investment kinds different and funds both through made are investments indirect companies’ Pension insurance investments. foreign 48% and 52% some is domestic, investments, indirect the Of 26% for onaverage. account investments indirect portfolios, property institutions’ biggest the In billion. of €17.9 portfolio investment an manages which Fund, Pension State is the investments property onindirect solely focuses that one only the institutions, large the Of funds. between markedly varies investments of indirect share The of 2015. end at the portfolios investment property 82% total some for of their accounted investments domestic direct Pension institutions’ portfolios. property institutions’ pension the dominate clearly investments direct years, in recent investments in indirect increase the Despite in Sweden. centres shopping two acquiring by investments property foreign direct In late 2015, first its made it also funds. property Investment of pension portfolios insurance companies 100 20 40 60 80 % 0 Shares ■RealestateinvestmentsOther ■ Shares anddeposits ■BondsOthermoneymarketinstruments ■ Loansreceivables Elo 13 34 33 14 Etera 32 29 17 Ilmarinen 39 40 11 taking the slightly negative inflation into account is a account into inflation slightly negative the taking in 2015, 6.0% and 3.7% which, between varied portfolios investment ontheir returns institutions’ pension Finnish The cities. main in the property residential of rental supply the enhance is to legislation of this purpose The years. three next the within 50% to up investments property residential their leverage can companies insurance shopping centre and office properties in its vicinity. In late vicinity. in its properties office and centre shopping Forum the million, comprising €576 for CBD Helsinki in the properties six acquiring by markedly portfolio its increased 2016, early In Sponda acquisitions. selected and disposals several effecting by strategy focused this implemented has company the years, Tampere. and In recent of Helsinki areas central in the development and investment centre shopping and onoffice focuses currently Sponda, value, market by measured company property listed biggest second The in Finland. located are 20 which of 53 centres, shopping currently owns company the total, In in Sweden. are 33%. 17% assets some Some of Citycon’s to holdings company’s of the share Norway’s billion, and by €1.5 value asset gross company’s the increased which Gruppen, Sektor Norwegian the 2015,In acquired Citycon in Finland. located currently are assets property Citycon’s 35% of about value, by market Measured countries. Nordic inother strongly now increased has inFinland, concentrated heavily was past in the which portfolio, property Citycon’s (€3.0 billion in 2014). €5 billion to close grew portfolio of property value billion, and €2 exceeded value market in 2015, and, exchange, its stock Helsinki in the listed company property biggest the as position its established has Citycon years, few past the In countries. Baltic and Nordic in the management and development investment, centre in shopping specialising company is a property Citycon 2015. during expansion – – Citycon’s company’s on one based is mainly growth The million. €700 of some 2014,to increase an shows this Compared billion. €3.7 to amounted in Helsinki Exchange Nordic OMX of the list main on the listed companies property of the value 2015, end market At year combined the sector Listed property liabilities. long-term their to regard with level sustainable Varma 16 25 42 10 Source: TheFinnishPensionAllianceTELA Veritas 39 35 11 Keva 35 42 of state-subsidised residential properties, the company company the properties, residential of state-subsidised owner amajor been earlier Having organisations. market labour Finnish major some include also shareholders VVO’s owners. largest VVO’s are Ilmarinen, Varma and companies, insurance pension sector private 2014). largest two Finland’s (€3.6 of billion end at billion the €4.0 to amounted portfolio property of 2015, of VVO’s end At the value locations. fair the 30 insome dwellings rental 32,500 owns currently who company, residential rental sector private biggest is the VVO portfolios. market major well as as portfolios residential subsidised significant holds of which each VVO, SATO Avara, and properties: in residential investing companies property non-listed major three are There of 2015.end €11.1 to amounted investment their total, In at billion the 2015. during at 20% stable remained market investment total of the companies property of non-listed share The companies property Non-listed dwellings. residential of 2014). 1700 rental some owns company The at €196 stood (€131 million portfolio end at million the of 2015, atcompany’s of end the the and value fair the in late 2013, listed was company The properties. residential in rental investing companies investment estate real listed for transparency tax provides which legislation, fund property Finnish the under operating fund property listed only is the Trust Investment Estate Real Residential Orava 14.9%. by increased index Helsinki OMX overall the while of 6.7%, increase showed an index Sector Estate in 2015, Real flat rather OMX the and was companies property listed of the performance share The million. €400 at slightly under stood value market company’s €1.4 to (€1.4 billion amounted of 2014), end at billion the and portfolio of of 2015, Technopolis’end property value fair the At the Lithuania. and Russia inNorway, Estonia, campus one have and inFinland, in8cities operates company The space. office modern with services combine which campuses, park of business achain manages and Technopolis develops owns, €1.1 billion. at some stood of 2014). end the of Sponda value market The €3.1 to of 2015 end at billion the (3.1amounted at billion portfolio property of Sponda’s value total The in Finland. Turku in the region and in Russia properties its all at selling aims also Sponda Logicor. Blackstone’s was purchaser the deals, both €100In million. of some price asales for area Harbor in Vuosaari portfolio property alogistics sold also Sponda InDecember operations. fund all and portfolio property alogistics sold it had whom Varma, for with in2014 together it established company investment logistics a in Certeum, shares of its sale the 2015, completed Sponda investment in the Forum shopping centre in early early in centre shopping ”Sponda made a major major a made ”Sponda 2016” Index (index, 7/2000=100) OM companies, property of FinnishShare performance listed SATO’s current holdings comprise some 23,500 apartments. apartments. 23,500 some comprise holdings SATO’s current Y-Foundation. by administered company property residential is amutual Y-Housing, to which dwellings subsidised 8600 of some sales a 2016, completed In early VVO Lumo. brand housing the under dwellings on market-based only focuses currently controlling stake in the company. in the stake controlling a got thereby who Logicor, Blackstone’s to company the in shares their sold 2015, In million. Sponda and Varma €900 than more worth portfolio property industrial and it sold alogistics and company the founded funds Sponda’s in investors and Sponda company Varma, listed company in 2014, insurance pension when established was company The properties. incommercial investing company property non-listed biggest is the Certeum) (formerly Logicor €100-120 of million equity. I Ky, some raise to it plans which for Asuinkiinteistörahasto Avara fund property residential anew establish to plans company.in the that it Inlate 2015, announced Avara shareholder biggest the being Elo company insurance pension the with institutions, Finnish major are shareholders Avara’s cities. larger in the concentrated mainly apartments rental 7,600 some manages and owns currently Oy Avara Elo. company insurance pension domestic and APG fund pension Dutch the include shareholders major 53% –some company. –of the Other majority the owns Balder Swedish the Currently, shares. their Varma all sold and in 2014 but 2015, and investors, Ilmarinen both institutional held domestic by were of SATO’s shares majority the past, the In Russia. 4% and Petersburg, inSt in Finland cities major other 15% area, in metropolitan Helsinki in the is located portfolio of 2014). atbillion end the billion (€2.5 of the 80% Some at €2.8 stood portfolio of SATO’s property value fair The 100 200 300 400 500 600 0 Helsinki Index and OM and Index X Helsinki 2000 OMX HelsinkiRealEstateIndex 2001 companies were established” companies were 2002 OMX HelsinkiIndex ”In 2015,”In several new

property investment investment property 2003

2004

2005

2006

2007

2008 Estate Real X Helsinki

2009

2010

2011 Source: NasdaqOMX 2012

2013

2014

2015

02/2016 33 3 The Finnish property investment market: volumes, structure and players 34 3 The Finnish property investment market: volumes, structure and players management companies, managing almost 50 funds. funds. 50 almost managing companies, management fund estate real Finnish 20 about currently are There funds. in these invest also institutions some Currently teams. management investment banks’ various through investors at private targeted mainly were funds of these first The structure. fund mutual semi-open-ended the under launched been have funds investment estate real special 2012,Since several institutions. domestic for structure is afavourable of view point taxation a from which partnerships, limited as structured typically are at institutions targeted funds property non-listed Finnish market. 17% investment some total of the for account currently funds Domestic investors. private to offered funds several also are there Currently investors. institutional at domestic targeted mainly were products fund first The of years. couple past the during significantly increased has funds property of non-listed supply The companies management Real fund estate companies. investment property specialised of domestic examples are Estate Real HYY IVG Polar. and and Renor Genesta instance, for include, These organisation. existing an with company a Finnish bought or in Finland office an established either have that investors foreign major some include property commercial in investing companies property non-listed Other €1.2 of some in 2015. billion acquisitions made companies three these Altogether, companies. of specialised ofkind this examples are Properties Serena and Antilooppi, Kiinteistöt, Ankkurikadun portfolios. property investors’ of institutional restructurings through emerged companies property 2015, new major several During Finnish property fund management companies have diverse diverse have companies management fund property Finnish Fund and Tradeka. and Fund Pension of Varma, State is a joint venture in VVT Turku. Hansa Centre Shopping of the properties of the ownership the restructured Endowment, University Akademi Åbo with who, together Veritas, and Elo funds pension by established was Exilion by managed structure venture joint another late2015, In area. metropolitan Helsinki in the properties in office invested has fund their and funds, pension Finnish of four is ajointventure Exilion VVT. and Exilion include of arrangements kinds of these Examples purposes. specific for fund aproperty establish to forces join of investors number alimited where arrangements jointventure like or club-deal- as considered be can funds Finnish of the Many investment. in residential specialised and partnerships limited as structured are funds estate real its and managers, of these largest is the ICECAPITAL class. asset alternative one as clients their for funds property offer currently that companies banking investment Finnish of examples are Taaleri and Auratum ICECAPITAL, partnerships. limited three and fund investment special one include funds Pohjola’s domestic four partnerships. limited as organised funds property five launched has LocalTapiola investors. other and shareholders their to funds offering business, management fund the into expanded also have companies These companies. in separate management investment property their that haveorganised investors institutional Finnish traditional are LocalTapiola and Management Pohjola Asset company. Group’s OP management investment is aglobal funds, Finnish three manages which Management, Asset Aberdeen areas. business of the is one investment property whom for company equity private aFinnish is originally funds, property Finnish three and Nordic one manages currently which CapMan, strategies. their affects significantly also which backgrounds,

Photo: SRV the top-5 list of foreign investors in Finland. investors of foreign list top-5 the in2015, it entered whereby acquisitions several made Sagax Also porfolio. Finnish in its centre shopping Itis the asset, one has Wereldhave only agreements. lease triple-net long with of assets type in sale-and-leaseback invested mainly has Renting Nordisk €1 to RBS close billion. portfolio its it increased whereby acquisitions major 2015 two made and in market the entered only Logicor Sagax. Swedish the and Wereldhave company listed Dutch the Renting, Nordisk RBS Logicor, include in Finland investors foreign biggest the portfolio, property of the value market by Measured managers. asset local /or and offices Nordic their through operate others while Patrizia), and Cornerstone Niam, Wereldhave, Genesta, IVG, instance, (for inFinland offices own their established have them of Many practices. management and strategies varying with of players group adiversified form investors Foreign market. investment property Finnish 22% total ofsome the €11.9 for of 2015, account end at billion the thus they and some to amounted investors of foreign holdings total The International investors properties. in commercial invests fund Fennia’s investment. property inresidential is specialised fund Ålandsbanken’s €150 and capital. of debt million equity of million €600 some had of 2016, fund the beginning the In projects. development property and acquisitions through in 2015 rapidly grow to continued fund the and properties, residential and commercial in Yieldboth invests Rental Pohjola’s OP- portfolio. of a €155 property care million acquisition amajor made 2016, fund Inearly the properties. in commercial investing another and properties in care of 2015: end at million the €420 specialised one of some value portfolio property atotal with funds, investment estate real special two manages eQ Fennia. company insurance and Management Pohjola Property Ålandsbanken, Bank, eQ include sector in this managers significant most The market. investment property professional the for of capital source a new opened thus has emergence their and investors, as of households lots have funds Mutual years. in recent rapidly increased has sector fund property mutual The investors. institutional international are investors fund’s the All properties. store in 2015, in grocery launched invests fund, first Sirius’ funds. estate real and managers multi institutions, domestic and global for deals club or funds well as as basis, deal-by-deal ona co-investments makes company The Sveafastigheter. Swedish of the team Finnish former bythe founded was company The sector. management investment and fund the in company established is anewly Partners Capital Sirius investors. foreign some to services management asset offer also They properties. healthcare and retail example, in, for investing funds manages that company management fund property is aspecialised Management Trevian Asset funds have increasedfunds rapidly ”Special mutual property property mutual ”Special in recent years” in recent Genesta, Niam, Redito and Hemsö Samhällsfastigheter. Samhällsfastigheter. Hemsö and Redito Niam, Genesta, Sagax, in 2015 instance for include, operations Finnish their expanding continued who investors, Swedish in Finland. players major are in particular investors Swedish Many countries. Nordic in other origins with investors by made were in 2015, majority the acquisitions investors’ foreign all Of Bank. Deutsche and Schroders by managed funds include in 2015 in Finland active investors German Other Amundi. French the by acquired was which portfolio, Aqua of the disposal of the part as inFinland assets some sold also Union SRV. developer its from of Helsinki, City the to rented centre, wellbeing and health Kalasatama new the instance, for in 2015. purchased, Deka acquisitions new through portfolios their increasing continued Deka and Union Both in Finland. million €400 worth held aportfolio Investment of 2015, end At the inFinland. Union players major are Immobilien Deka and Investment Union funds German The million. €640 some totalled disposals investors’ Foreign volume. transaction total of the third one €1.9 billion, representing some worth acquisitions made In 2015, investors foreign are from elsewhere in Europe. elsewhere from are rest the and US, the from are ¾of investors some fund new Sirius’s inthe Also Properties. Serena through market Finnish the entered Ratos firm equity private Swedish Oy. The Kiinteistöt Ankkurikadun and Oy Management Antilooppi in both invested Pensionsförsäkring AMF Swedish The SATO. company of residential shareholder majority the became transactions, who, Balder, inseveral company listed Swedish the by and Certeum company logistics of the stake controlling the purchased who Logicor, Blackstone’s by made were investments indirect biggest The funds. and companies property various through market property Finnish in the placed also was capital of foreign amount A significant Logicor. investor property logistics and &Partners, Risan Ness, Norwegian Fastigheter, Hemfosa Swedish the instance, for included, in 2015 market Finnish the entered who investors New 2015. during investments new several made NREP manager fund Danish the Also investments worth €1.9 billion ”Foreign investors made new new made investors ”Foreign investments in Finland in in Finland in investments ”Foreign investors made made investors ”Foreign significant indirect indirect significant in 2015” in 2015” 35 3 The Finnish property investment market: volumes, structure and players 36 3 The Finnish property investment market: volumes, structure and players minority shareholder in University Properties of Finland Ltd. of Finland Properties inUniversity shareholder minority the remains state the while universities, the by owned fully now are companies two These area. Metropolitan Helsinki in the operating companies in the shares its sold state Ltd). 2015, In of Finland Finnish the Properties (University in Finland elsewhere one and Properties), University Aalto and Properties University (Helsinki area metropolitan Helsinki in the buildings university manage and own Two companies of the buildings. university manage and own is to purpose sole whose companies, limited three by owned are properties university Finnish of the majority The term. long in the agencies state by needed not are that of properties dispose is to purpose whose unit abusiness has Senate properties. Senate by sold be to of space amounts significant free thus would which efficiency, in space increase ambitious at an aim will which strategy, workplace a new pursue to started also has state The unit. expertise environment working internal state’s the as strategy its implementing is currently and of Finance Ministry of the control the under operates Senate Army. Finnish the by used properties well as as buildings, cultural and prisons ministries, and agencies state by used of offices consists portfolio sqm million 6.4 diversified Its billion. €4.7 of some portfolio a property with in Finland, owner property largest is the Senate investors. property sector private and agencies state between agreements in lease intermediator an as acts It also holdings. property state’s the let and manage develop, is to task whose Properties, Senate called enterprise onagovernment-owned holdings property of its most concentrated has state Finnish The market. property Finnish inthe players important very are entities sector Public Public sector transactions in FinlandLargest direct in property 2015-2016 ASSET /PORTFOLIO ASSET apartments) (1200 properties residential 28 Kaari Centre Shopping property office head Finland EY Three industrial properties 20 retail properties property centre warehouse and one logistics Three postal centres, one 27 properties care area metropolitan Helsinki in properties office Six Finland and Sweden in properties hotel and office 97 retail, 22 retail properties area metropolitan Helsinki in properties office 15 CBD Helsinki in properties office and retail six block, Forum Sweden) 6in Finland, in (33 centres 3shopping properties, retail 36 2015Q4 2015Q4 2015Q3 2015Q2 2015Q2 2015Q2 2015Q2 2015Q1 2016Q1 2016Q1 2016Q1 2016Q1 2016Q1 DATE n/a n/a 93.3 100 115 120 155 160 450) total in (portfolio 180 191.5 400 576 ) 652 total in (portfolio 605 (M PRICE € ) OP-Rental Yield OP-Rental NIAM GmbH Estate Real Investment Union Logicor (owned by Blackstone) Partners Capital Sirius (NRP) &Partners Risan Ness, Care eQ NIAM Group Partners AB Properties Serena AMF) and Ilmarinen by venture Ky (a joint Antilooppi Sponda Plc KiinteistötAnkkurikadun Oy PURCHASER properties commercial of structure Ownership municipalities. to services their sell who providers service sector private to premises the rent they and investors, private by developed currently are care elderly for needed properties new of, instance, for proportion A big ownership. property impacts also which provision, service in their strategies varying more apply to have started municipalities years, In recent players. market private to let they that of space amount asignificant have also in particular, of Helsinki City the as such municipalities, Some billion. €20 around to amount holdings property municipalities’ Finnish the that It is estimated buildings. cultural well as as centres, healthcare and nurseries schools, offices, as such provision, service and administration public for required properties of majority the own typically municipalities Finnish 100 % 10 20 30 40 50 60 70 80 90 0 ■ Publicsector investors■Smallandowner-occupiers ■ Professional Ofc eal(nl oes Industrial(incl. Retail(incl.hotels) Office Company Pension Insurance Mutual Ilmarinen HOK-Elanto Company Pension Insurance Mutual Etera Sponda Plc investors Private Oyj Group Posti Capital) Horizon Northern by I(managed Healthcare Pension Insurance Elo Mutual Sveafastigheter Fund III Company Insurance Pension Mutual Varma Company Pension Insurance Mutual Ilmarinen Konstsamfundet r.f. FastighetsForum Kb, Föreningen Oy Satama Kruunuvuoren Fund, Pension Kesko Oyj, Kesko SELLER

warehouse andlogistics) warehouse Source: KTI Source: KTI S-Group, HOK-Elanto in particular has also sold properties properties sold also has in particular HOK-Elanto S-Group, within co-operatives the Of investment. and development property retail in the player amajor remains it still but sheet balance in its properties fewer holds currently Kesko of 2015, deal sale-and-leaseback large of the aresult As market. property in the players active been traditionally have chains, retail Finnish major two Kesko, the and S-Group Oy. Kiinteistöt Ankkurikadun established newly the to million €650 worth properties bysold Kesko, who out carried was transaction 2015, sale-and-leaseback biggest the In market. investment of the size total the increased has part, its for which, of properties, worth billion €6 than more sold corporations Finnish decade, last Inthe leases. long relatively through buildings in these tenants as remained companies the cases, inmany and, holdings property existing their sold also have corporations Finnish major several of years, couple past the During investors. professional by developed – are in particular properties –office properties new of the Most strategies. management and ownership property evolving of corporations’ execution the enabled has market finance and investment property of the development and broadening The investors. professional by owned are 80%, almost properties, of office majority vast the value, by Measured 57%. at some stands currently and years, in recent markedly decreased has of owner-occupancy share the sector, (approx. 82%).sector property retail the In industrial inthe common very is still owner-occupation and owner-occupied, been traditionally has stock property of commercial majority The portfolios. property of large ownership their through market property Finnish inthe role played asignificant have occupiers Traditionally, property Corporations dwellings. state-subsidised 47,000 some owns who Heka, company property residential its through in Finland landlord single largest is the instance, for of Helsinki, €10 City some to The billion. amounts which of value estimated the stock, state-subsidised own mainly companies These companies. separate through portfolios property residential significant own also municipalities Most billion. €6 some to amount to estimated are properties these total, In solutions. viable exploring are groups working several but defined, been yet not have restructurings of these details The management. and ownership of property restructuring major require also will authorities regional to services healthcare all of management of the centralisation The municipalities. single by owned are properties healthcare smaller while of municipalities, federations regional by owned are properties hospital main responsibilities: provision service to according organised are holdings property well. Currently, as issues ownership onproperty impact asignificant have will services healthcare and in social reform planned The property ownership ofproperty the ”The planned”The healthcare have major impact on service reform will service municipalities” corporations, 2006–2015 2006–2015 corporations, Finnish the disposals of Property their headquarters and other office premises. Companies Companies premises. office other and headquarters their of more rent to beginning are they even but properties, production their own typically still companies Industrial fund. Niam’s to in Helsinki Kaari centre 2015, In years. shopping itthe sold in recent investors to management companies Realco and KJ- Kiinteistöjohto. KJ- and Realco companies management Finnish the 2015, In bought Realia investors. institutional among and management property in commercial position its at strengthening it aims acquisitions these through and firms, management domestic of smaller acquisitions through expanded has Management Realia years, In recent services. advisory and valuation management, property commercial for services management offers also and portfolios, residential investors’ major some manages Group, of the company affiliate another Management, Realia markets. management and brokerage property residential in the player amajor companies, daughter its is, through Group Realia management. housing and management property residential management, property commercial divisions: in three is organised Group Ovenia sectors. management housing and centre shopping the in, example, for companies specialist several purchasing by years inrecent acquisitions company through expanded has Ovenia corporations. well as as investors, international and Finnish major include clients Oy’s Ovenia firms. equity private by held is currently companies these of all ownership majority The Management. Realia and Corbel Ovenia, include companies service management property and asset Finnish major The companies. Nordic and domestic by dominated is market services management property and asset The services management property and Asset 3.3 Real sector estate service premises. new move to companies when reduced is typically usage space and efficiency, space emphasise also companies Most premises. their rent typically and strategies, workplace sophisticated increasingly pursuing are space office using MEUR 1200 1500 300 600 900

0

2006

2007

2008

2009

2010

2011

2012

2013

2014 Source: KTI

2015 37 3 The Finnish property investment market: volumes, structure and players 38 3 The Finnish property investment market: volumes, structure and players property services management. services property on solely concentrating of acompany example is another Management Service Coor investors. domestic for working mainly company service management property traditional of a example is an Oy J. Juhola Kiinteistömanagement corporations. to services management facility offered earlier has CBRE CBRE. to Nordics in the administration property and accounting property management, property outsource to adecision made In2015,in Finland. however, Aberdeen services valuation and brokerage advisory, on transaction typically concentrate firms service estate real global The in Finland. portfolios investors’ international some company, manages which management asset and investment estate real Nordic It is a boutique Group. of Catella is part Management, Asset Amplion as known formerly Management, Asset Catella company. management asset and fund Finnish specialized of a example is an Management Trevian Asset funds. property several manage also currently they but portfolios, property shareholders’ of the management property and of asset care take to founded originally were companies The investors. institutional domestic by founded companies ManagementProperty are examples of management Pohjola and Management Asset Property LocalTapiola corporations. and investors property international and domestic both for services valuation and advisory management, estate of real spectrum awide offers Newsec sector. management property and asset inthe player major is another group, Stronghold- Swedish-originated of the part Newsec, Finland. throughout locations invarious services management housing offers also It funds. property and investors institutional Finnish some instance, for services, company company. The management property and asset domestic is another Oy Corbel Photo: SRV one of the major players in transactions, valuation, leasing leasing valuation, in transactions, players major of the one become to grown has and in 2007 market the entered JLL C&W the brand. under operations its continue will company the and companies, two of the merger the after also partner alliance its become will Finland DTZ that &Wakefield announced Cushman 2016, Inearly in 2004. company alocal with agreement alliance an through market the enter to first the among was DTZ firms, service property international major the Of &Wakefield. of Cushman partner alliance Finnish the been previously had who Tuloskiinteistöt, firm agency leasing and transaction aFinnish acquired it that has announced Newsec 2016, Inearly services. in valuation Savills with operates co- currently Realia services. transaction and advisory valuation, offer also Management Realia and Group Catella Newsec, companies, management major the Of companies. global big and firms entrepreneurial domestic of small mixture acolourful includes market service advisory The services transaction valuationand Advisory, market.service management technical and property in the player significant is a Oyj Caverion SOL. and & Tikanoja Lassila ISS, include services management offer currently also who maintenance) and catering cleaning, (such as provision service traditional in backgrounds with companies service largest The chain. service whole the offer to expanded that have companies service traditional and companies management specialist both in Finland. office an has also Leimdörfer advisor Swedish-originated Oy. The Finadvice firm advisory transactions Finnish the acquired It recently agreements. collaboration through represented been previously having in2009, in Helsinki office own its established CBRE brokerage. and consultancy Facilities management services to occupiers are offered by offered are occupiers to services management Facilities years from the issuance date. issuance the from years five after option aredemption exercise may company the but maturity, no has bond *The currently the most active in the Finnish market. Finnish in the active most the currently is Hessen-Thüringen) (Landesbank Helaba German the banks, finance property specialised international the Of projects. or transactions property commercial major in financing active most the been recently has SEB banks, these Of Banking. Merchant SEB and Bank Danske Group, OP Bank, Nordea including banks, Nordic and local major the by is provided financing estate of real part major The financing Property in Finland. services specific estate real offer also PwC, and EY KPMG, as such firms, consultancy business Global in Finland. unit estate real a separate has Finance Corporate Enskilda SEB Also Estate. Real Aventum and Finance Corporate Advium including companies, domestic some by offered are services finance corporate firms, services transaction actual the to In addition Partners. Property Pangea Swedish the with collaboration havestarted they that announced recently just who and in particular, investors Swedish and domestic for adviser transactions as works Oy, of who mrec brand the under business continues team Tenzing’s Finnish Swedish former The investors. major some Peltola serves & Co firms, valuation local the Of players. domestic mainly servicing firms service valuation and transactions local of smaller acouple also are There Bonds issued investors by the Finnish property Sponda Citycon SATO Citycon Technopolis SATO Citycon Citycon Sponda Citycon SATO VVO Technopolis SATO ISSUER ”Transaction services advisory ”Local banks are the banks are major”Local providers of debt for real are widely available”are estate investments” ISSUED DATE ISSUED 20.12.2013 18.6.2013 26.3.2013 28.5.2015 20.3.2013 20.5.2015 29.5.2013 16.9.2015 24.6.2013 10.9.2015 1.10.2014 9.10.2013 1.9.2015 1.9.2015 MATURITY DATE MATURITY 20.12.2022 26.3.2018* 28.5.2020 18.6.2023 23.5.2020 20.5.2020 20.3.2018 16.9.2022 10.9.2020 24.6.2020 1.10.2024 9.10.2018 1.3.2021 1.9.2025 MATURITY, YEARS 5,5 10 10 10 7 5 5 9 5 5 7 7 5 - AMOUNT, mEUR 1.25 bn NOK bn 1.25 has decreased the margins for best properties and clients clients and properties best for margins the decreased has of debt availability Good investors. well-known solvent, and cash-flow stable with assets core do, however, favour Lenders transactions. and investments estate real for available easily is relatively finance debt conditions, market current the In improve the availability and terms of bond financing. of bond terms and availability the improve to inorder ratings credit SATO acquired and also have Citycon financing. in their bonds SATO and use VVO also companies investment residential Technopolis, and Citycon Sponda, companies listed major the to addition In sheets. balance their financing for bonds corporate use currently companies property Finnish biggest The of finance. sources several to access have investors property biggest The market. property Finnish million, the into €400 capacity, some lending of its half focus thatwould fund debt of anew launch the it that is preparing announced Capital Estate Real 2016, Brunswick Swedish early In the Finland. in insignificant is, however, volume currently sector’s This investments. property for debt mezzanine or senior either provide which funds, is debt capital of debt source Another non-significant. remained has institutions by provided of debt volume the and competitive, more be to proven have however, banks circumstances, market current In deals. in financing banks with in co-operation act or clients, their to directly debt property provide either can funds insurance life Pension and investments. property for financing debt provide to funds, life instance for investors, institutional for attractive it more made has framework II Solvency finance. in property cautiousness banks’ increases regulation tightening hand, other the On in particular. 1.4 bn NOK bn 1.4 ISSUED ISSUED 300 300 500 350 150 150 100 100 175 25 75 24 use several sources of severaluse finance” sources ”Major property companies”Major property 12 m Euribor +2.50% mEuribor 12 6 m Euribor+ 2.25% 6 mEuribor+ 3 m NIBOR +1.55% 3 mNIBOR FIXED COUPON FIXED INTEREST, 3.375% 2.375% 2.375% 2.875% 3.90% 2.50% 3.25% 2.25% 7.50% 3.75% 3.75% unsecured unsecured unsecured unsecured unsecured unsecured unsecured unsecured unsecured secured secured secured secured hybrid TYPE Source: KTI 39 3 The Finnish property investment market: volumes, structure and players 40 3 The Finnish property investment market: volumes, structure and players they can, for instance, look for new uses for vacant properties. properties. vacant for uses new for look instance, for can, they where portfolios, in their assets of existing redevelopment the emphasise strategies development Institutions’ developer. main the with risk development the share company, thus they and developing in the shareholders as investors institutional are Tripla, and there example, for REDI In both projects. large in some developers other with jointventures into entered however, have they years, In recent pre-let. are premises the of majority the when a project enter only typically They development. property commercial concerning strategies conservative quite have traditionally investors Institutional Helsinki. in Itäkeskus, project centre shopping sqm a26,000 out carrying is currently Kesko municipalities. to revenues tax bring also but employment increase only not they because issues in planning authorities local with power bargaining strong have typically They developers. property professional and significant –are in particular Kesko, and SGroup retailers –large owner-occupiers Some homebuyers. for apartments develop mostly who players, local smaller typically numerous, also are there sector, development property residential Inthe million. €700 to increased companies and funds property to sold dwellings of new markedly, in 2015, and amount total the increased -have in particular funds -property investors to sales the years, recent In of plots. amount hold asignificant and buy typically this, they For quantities. in larger investors to and units single as homebuyers to both directly sold be to – properties residential develop also companies of these All Helsinki. in Pasila, Tripla major the project start to about just is YIT projects. current of SRV’s largest the are Kalasatama in projects other and REDI centre Shopping cities. major other and area metropolitan Helsinki in the concepts park business of its developer active an as especially is known Development Property NCC Helsinki-Vantaaof the airport. vicinity in the building office an developing is currently CPD Skanska temporarily. –at least it develops buildings in the investor an as remain also circumstances, certain under can, which Development Nordic, Property Commercial Skanska through Nordics inthe operations development its organised has Skanska investors. international and domestic both with cooperated have and years in recent field in this active been all have companies Peab. SRV and These Lemminkäinen, YIT, Hartela, Skanska, NCC, include development property in involved commercial companies construction Major owners. their by handled is mostly buildings of existing redevelopment the whereas development, in new players active are They development. property in commercial specialises that arm a separate have typically who companies by construction dominated is market development property commercial Finnish The development Property into joint in ventures major ”Institutions have entered property development development property projects”

Partners is another real estate investment company focusing focusing company investment estate real is another Partners Property HGR premises. of old industrial redevelopment on is Renor, example concentrates which One markets. niche in their development in property active funds and companies property non-listed smaller some also are There in Tampere. project centre shopping Ratina Sponda’s and Citycon; by in Espoo Omena of Iso expansion the include companies of listed projects development ongoing main The strategies. in their included countries in other well as as in Finland both areas core own in their development in property players active Technopolisand are Citycon Sponda, portfolios. own in their assets develop actively also companies investment property Finnish development. residential in financing debt use to allowed temporarily are funds pension and regulators, by encouraged been also has development Residential portfolio. in their plots appropriate have they where in cases especially development, property commercial than risky less is considered which development, residential in strategies active slightly more pursue typically Institutions feasibility. financial and technical into studies thorough and inplanning changes require often most they as atime, long take often processes However, these solutions. new for look to investors pressures which area, metropolitan Helsinki in the premises of office oversupply the to due conditions market in current is emphasised This strategy. strategy. in their development property include also funds property Some use. other some for redeveloped be to buildings in existing investing mainly development, estate on real

Photo: SRV project was the completion of the OP Group’s Vallila Group’s OP of the completion the was project individual biggest The area. metropolitan Helsinki in the completed was space office of new sqm In 2015, 80,000 some of 2015. end at the construction under of offices sqm 35,000 some only were there activity, development of high years several After onaverage. annually completed was space office of new sqm 2015, 105,000 some and 2008 Between development. new through years in recent significantly increased has region Helsinki in the stock Office stock. office in the reflected is also which size, same of the centres European other in many than is greater market property commercial and economy Finnish in the area metropolitan Helsinki of the dominance The cities. major other in six million 3.6 another and area, metropolitan Helsinki inthe is located metres square million 8.6 this,about Of metres. square 19.4 is some in Finland million space of office stock total The Stock market 4.1 office The increased. sectors other in the volumes the time, same at the and, down, slide to continued values market their as further decreased properties of office share The portfolios. investors’ professional to corporations from transferred were assets new inwhich transactions sale-and-lease-back some to due increased, also properties of retail volume investment total The portfolios. investors’ in properties of new development the and values market in €1.2 by increase both to billion, due increased market invested in the properties of residential amount total The strengthen. to continued development 2015,In structural this classes. asset property recognised as attractiveness their increased also have properties, educational and healthcare instance for properties, use public of years, couple Within past the capital. of investment supply increasing an and dwellings residential rental for demand strong to due strengthened has in particular properties of residential position the time, same At the third. one than less markedly, is currently and decreased has of offices share the sectors, inother base of investor expansion and of offices performance investment weak to due years, recent In database. Index KTI of the 50% than more represented properties office ago, A decade years. in recent markedly changed has market investment property Finnish the structure, sector of property terms In investment performance practices and market structure, sectors: 4 Property Helsinki metropolitan area” metropolitan Helsinki ”44% of the Finnish office stock is located in the investors, and, in the case of new development, offices are are offices development, of new case in the and, investors, to properties headquarter their sold have companies many decade past the during but owner-occupied, typically were properties headquarter past, Inthe area. metropolitan Helsinki in the areas other insome (CBD) and district business central Helsinki in the both found be can These headquarters. company as typically used buildings tenant is single- category second The areas. office recognised and centres in city located typically buildings, office tenant is multi- stock office of investable proportion largest The area. metropolitan Helsinki in the located are database, Index KTI in the offices of the 77% majority, some The performance. investment poor their to due years inrecent rapidly decreased has share their although portfolios, property institutional Finnish in role played asignificant traditionally have Offices Players is underway. building one where inOulu, and construction, under were buildings office three in Tampere, only where projects development ongoing of 2015, end At the were met. are there criteria pre-letting high quite when started only typically are projects new low and rather remained has activity development office area, metropolitan Helsinki the outside cities major In the in 2015.completed project major another was in Pasila project Ilmalanrinne Sponda’s sqm. 30,000 of some area aleasable with Campus total size EUR 54.5 bn 54.5 EUR size total investment market by sector structureThe of Finnish property 28.6% ”Office development”Office activity 8.1 % 4.6% 3.7% is low ” low is 25.9% 29.2% ■ Other ■ Hotel ■ Residential ■ Industrial ■ Retail ■ Office Source: KTI 41 4 Property sectors: market structure, practices and investment performance 42 4 Property sectors: market structure, practices and investment performance properties. office Finnish in the investments have significant also Schroders and Investment Union Immobilien, Deka instance for investors, Foreign funds. domestic non-listed specialised Technopolis and some and Sponda companies listed Keva, and Varma, Ilmarinen as such institutions Finnish large include sector office in the investors biggest The metropolitan area. Helsinki in the concentrated and properties, park business and headquarter-type by dominated are investments office investors’ Foreign strategies. focused havemore to tend funds and companies property whereas portfolios, in their types office three hold all typically institutions Domestic area. metropolitan Helsinki in the mainly connections, traffic good near located properties is business-park-type category office third The investors. with together developed typically sqm Distribution stock by location, of office 37% 19% in 2008-2015 in area Helsinki metropolitan the in offices of Completions 100,000 150,000 200,000 250,000 300,000 50,000 44% ■ RestofFinland ■ Othermajorcities area ■ Helsinkimetropolitan 0 has beenestimatedbasedongrossareainformation. onrentable areahasn’t* Ifinformation beenavailable, rentablearea 08 09 00 21 02 21 04 2015 2014 2013 2012 2011 2010 2009 2008 ■ RevelopmentNew Source: StatisticsFinland EY headquarters in the Helsinki CBD, which was acquired acquired was which CBD, Helsinki in the headquarters EY include of transactions kinds of these biggest The properties. well-located of modern, made transactions single-asset in 2015 mostly were transactions property office Otherwise, acquisitions. single-asset some through grew year in the later who and area, metropolitan Helsinki in the portfolio property million a€400 bought first which of Antilooppi, of 2015 foundation the was transaction office largest The cities. European other most to compared gap yield positive the by Finland to attracted been have who investors foreign by acquired been mainly have properties prime these years, recent In liquidity. and cash-flow secure their to due target investment attractive most the be to continue CBD Helsinki in the Offices and characteristics of the building. building. of the characteristics and location on the depending metre, square per €4 and €3.50 between vary properties office for costs Typical operating tenants. to separately charged be also can costs Operating costs. operational include which rents, gross often most are rents buildings, office multi-tenant In sub-categories. office different between significantly differ agreements of rental terms The varied. are market office in the practices Rental practices Rental Management. Asset Deutsche by managed afund by purchased was which Valley in Espoo, Business Sola the and Investment, by Union ”Transactions volume of office ”Finnish prime offer offices a properties amountedproperties to €1.3 positive yield gap compared to most other markets” billion in 2015” Source: KTI,RPTDocu Oy and rents continue decreasing. decreasing. continue rents and high remain rates vacancy areas, secondary in the whereas conditions, economic challenging the despite tenants attracting continue areas in prime premises Best increased. have areas office secondary and of prime performance rental in the differences the years, past the During offices – market Rental use. temporary and short-term for services business acquire and space rent can occupiers where concepts, space flexible or of co-working kinds new through need this to responded have owners supply. Property space office flexible more for aneed up brought has demands flexibility occupiers’ in office increase the years, recent In Index. of Living Cost the to linked typically are rents Office charge. service separate a plus rent of afixed consist typically rents park Business facilities. meeting and services postal catering, cleaning, security, reception, supply, as such service extensive and agreements flexible offering by compete parks Business deals. in sale-and-leaseback applied typically also are of agreements kinds These applied. commonly are rents net agreements, these In years. twenty and ten – between long quite usually are terms the buildings, single-tenant In units. office in applied larger commonly are terms lease Fixed period. notice agreed the with term indefinite an for continues contract the which after years, five or of three period fixed ona agree to common It is also landlord. the and tenant the both for applies period same the and months, twelve or six three, are periods Typical notice buildings. office inmulti-tenant applied commonly are terms lease Indefinite sluggish, and as most occupiers aim at increasing space space at increasing aim occupiers most as and sluggish, remains However, growth high. job as rather remained has activity market rental leasings, major some to Due space. office vacant 1.1 some of 2015, end ofAt the were sqm million there Property. Catella at to 13.3%, area, according metropolitan Helsinki in the high remains of offices rate vacancy The decreased. has rate recently,vacancy the and tenants large several attracted has inHelsinki area Ruoholahti the hand, other the On rates. vacancy high relatively from suffer in Espoo, inKeilaniemi Vantaa and area airport the as such areas, office established some Even in question. asset individual of the characteristics and location micro on the is dependent performance the areas, office other most In CBD. in the is, however, slightlyrents positive office for outlook the Barometer, Property RAKLI-KTI the to markedly. According increased rate 2015, vacancy and during increasing stopped rents top the centre, city in the however, even conditions; market challenging recent in the resilience its proven has market office CBD Helsinki The sqm per annum. annum. per sqm 300,000-350,000 at some stable, rather take-up kept gross has activity market leasing and development new Active market. in the space of empty amount the increases which premises, smaller move to typically tenants efficiency, growth and increasedgrowth space pressured by sluggishpressured job ”Office space demand demand space ”Office efficiency”

Photo: SRV 43 4 Property sectors: market structure, practices and investment performance 44 4 Property sectors: market structure, practices and investment performance on average. For the best properties, yields are currently well currently are yields properties, best the For on average. history, at 5.0% 20-year barometer’s in the level ever lowest 2015, at the stood they in October out carried Barometer, Property RAKLI-KTI latest in the and decreasing, continued have yields well. Office perform to continue offices CBD Helsinki conditions, market challenging the Despite capitals European other inHelsinki yields and rents and Office rates and rents. occupancy decreasing by both pressured year previous the from decreased 2015. for return Income recorded 0.2% was of growth capital a slightly positive values, capital decreasing of 6.1% in 2015 of (4.0% years in 2014). several After return atotal produced offices Index, KTI the to According stable. mostly remain cities in major rates vacancy and rents office Prime centres. city outside areas office two or one and centres in city concentrated typically are offices region, Helsinki of the outside cities In 2007. since area metropolitan Helsinki in the use property healthcare or hotel residential, into redeveloped been have sqm, 270,000 some comprising buildings, office 60 some total, In buildings. of the characteristics technical /or and issues planning to due execute to impossible even or difficult however, are, often projects of use Change use. residential or hotel for developed been location, ontheir depending have, Old offices explored. actively being are opportunities redevelopment vacancy, long-term from suffering properties For tenants. demanding increasingly attract to in order concepts service and of space kinds new developing also are landlords Many tenants. retain and attract to in order applied being –are improvements tenant and periods free rent- –including means various management, Inrental issue. vacancy the respond to actions several pursuing are Landlords 75%. below now have decreased and in Espoo, lowest the remain rates year. Occupancy past in the points 3 percentage of some adecrease of 2015, end at the of Finland all represents which for 80% at about stood portfolios investors’ inmajor premises of office rate occupancy the database, rental In KTI’s and whole Finland whole and occupancy rates in the HelsinkiOffice metropolitan area 70 75 80 85 90 95 %

2005 HMA 2006

2007 Whole Finland

2008

2009

2010 property barometer. property RAKLI-KTI the to according year-end, the towards however, positive more slightly turned, of rents outlook The 0.5%. by decreased half, index the latter the during 1%, of some but, increase showed an CBD for index rental of 2015, half KTI the first the During month. per sqm per €30 at some stand currently CBD Top Helsinki in the rents regions. other in lower all clearly remains demand investment therefore, and area, Helsinki at the targeted is mainly demand investment slightly. International increased even or stable remained have yields region, Helsinki the outside cities in all and areas However, in secondary area. metropolitan Helsinki in the submarkets office well-established other in also yields pressured has demand investment Strong capitals. European other to compared gap apositive offers still Helsinki compression, yield the Despite below this. Helsinki metropolitan area Helsinki metropolitan take-up gross Office 100,000 200,000 300,000 400,000 500,000 2011 sqm

0 2012 2006

2007 2013

2008 Source: KTIRentaldatabase

2009 2014

2010

2011 2015

2012

2013

2014 Source: KTI

2015 retail corporation’s sale-and-leaseback transactions and new new and transactions sale-and-leaseback corporation’s retail both to due years in recent steadily increased has investors professional by owned stock property retail the Therefore, market. investment inthe attractiveness their supported has which sectors, property commercial other to compared strong been has performance investment properties’ Retail areas. city major in the located mainly are centres shopping biggest of 1.9 The sqm. million area retail leasable a total with 93 centres shopping are there Centres, Shopping for Council Finnish the to According cities. major in other 5.4 and million area, metropolitan Helsinki in the is located stock space retail of the sqm million 3.8 About properties. hotel includes also this data, Finland’s InStatistics Finland. in space of retail sqm 29 million some are there Altogether, Stock market retail The 4.2 Total investments, returns on office 2000-2015 10 12 -6 -4 -2 0 2 4 6 8 % Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000

2001

2002

2003

2004

2005

2006 Total return 2007

2008 at 26%. at stands currently share properties’ retail market, investment property total the Of transactions. portfolio property retail significant afew by supported market, transaction in the sector traded most the were 2015, properties retail In third. one and fifth one between varied has transactions of all share properties’ retail years, past the In development. under construction, and some major projects just about to to about just projects major some and construction, under space retail of new sqm 190,000 some of 2015, were there end at the and active, be to continues development property Retail 20%. than more by increased has area metropolitan Helsinki in the stock property retail 10 years, Within past the

2009

”Retail property development development property ”Retail 2010 Helsinki metropolitan area” metropolitan Helsinki

is active in currently the 2011

2012

2013

2014 Source: KTIIndex 2015

Photo: City of Helsinki / Suomen ilmakuva 45 4 Property sectors: market structure, practices and investment performance 46 4 Property sectors: market structure, practices and investment performance Also Sponda is currently strengthening its position in the in the position its strengthening is currently Sponda Also Finland. across centres shopping 20 its with market centre shopping Finnish in the player biggest is the Citycon investment. and development property in retail players major also are SGroup, and Kesko retailers, Finnish major two The properties. retail smaller or centres in shopping either investing onretail, concentrated also have investors international Some group. inthis biggest the being Citycon with in retail, specialising players major some also are There units. retail smaller well as as properties hypermarket and centre shopping both including portfolios, investment funds’ in pension well represented typically is 19% 28%. Retail to from increased has database Index KTI of the share properties’ retail 10 years, Within past the Players Jyväskylä. and in Tampere, Oulu underway projects centre shopping major also are there region, Helsinki the Outside connections. traffic public good with units retail in large concentrated is development New underway. connections railway and metro city, new by well as as capital of the population increasing the by is driven development New started. be Q4/2015 cities, European other Helsinki in and yields office Prime Q4/2015 rents in HelsinkiPrime office and other European cities, Copenhagen Copenhagen Amsterdam Amsterdam Stockholm Stockholm Budapest Budapest Brussels Brussels Moscow Moscow Helsinki Helsinki Warsaw Warsaw London London Madrid Madrid Dublin Dublin Berlin Berlin Milan Milan Paris Paris Oslo Oslo 0 0 1 200 2 400 3 600 4 800 5 1000 centre in Lappeenranta, as well as in Renor’s Puuvilla in Pori. inPori. Puuvilla inRenor’s well as as in Lappeenranta, centre IsoKristiina inCitycon’s is aco-investor Ilmarinen S Group. and Kesko of Elo, Unibail-Rodamco, consisting agroup by in Vantaa is owned centre shopping Jumbo the –while Etera and Elo – Keva, institutions pension three by jointly owned is in Espoo centre shopping Sello the example, For centres. in bigger investors other with jointinvestments into enter often also Pension funds in Hämeenlinna. centre shopping developed a newly owns Keva and Tornio Hyvinkää, and of cities in the centres in shopping invested Varma has example, For of development. phases early quite during invest typically they inwhich centres shopping regional, whole, typically own institutions pension Finnish Some CBD. Helsinki in the Forum centre shopping the 2016, in Tampere, in early it acquired and centre Ratina of the construction the In 2015, market. it started centre shopping 6 1200 7 ”Retail properties continue properties ”Retail to attract bothto attract foreign and 1400 8 domestic investors” domestic Source: JLL,KTI(Helsinki) Source: JLL,KTI(Helsinki) 1600 9 1800 10 e/sqm/year 2000 11 % Aberdeen and CapMan, have also invested in shopping in shopping invested also have CapMan, and Aberdeen by managed those as such funds, property Domestic in Helsinki. Kaari centre shopping the acquired 2015, In fund Niam’s Cornerstone. with centre shopping Kamppi inthe investment venture ajoint into entered has Estate Real Allianz Also Estate. Real Cornerstone and Investors Global CBRE by managed funds retail well as as Unibail-Rodamco, Wereldhave and as such funds and companies property foreign specialised some attracted also has market centre shopping Finnish The Onvest. company investment and Company Insurance Mutual Fennia and Life Fennia Etera, include co-investors the inPasila, Tripla project YIT’s In funds. LocalTapiola’s and SRV, Group’s OP and between Ilmarinen ajointventure by is developed project REDI sqm 60,000 The underway. currently projects development centre shopping major two in the investors also are institutions Domestic Hartela. developer its from in Helsinki centre of asmallish 50% 2015,In acquired Etera planning under =project circle light project, of =size circle of size Major retail development projects in the Helsinki metropolitan area Licence; Helsinki City Survey Division’s open data licence 1.0. Additions to the map by KTI. 2/2016. KTI. by map the to Additions 1.0. licence data open Division’s HSY, 2014. and Survey Region City Helsinki Helsinki of Licence; municipalities the Division, Survey City @Helsinki contributors © OpenStreetMap - QGIS Development Team, 2015, QGIS Geographic Information Open System. Source Foundation Geospatial Project. 2.12.2 QGIS using created Map shopping with centres good ”Investors believe in large traffic connections” traffic its capital from foreign investors. investors. foreign from capital its raised has which management, Capital Sirius by established fund anew well as as Ratos, Swedish the Varmaand between ajointventure Properties, Serena include market investment property retail in the newcomers Other in Finland. centres shopping three including properties, of retail worth million €600 some owns company The Pensionsförsäkring. AMF Swedish the and Kesko, Ilmarinen chain retail between in 2015 a joint venture as founded was company The market. investment property retail Finnish inthe player major established newly a is Kiinteistöt Ankkurikadun properties. centre in shopping investors also are SGroup and Kesko chains Retail centre. of the manager the be will Exilion Endowment. University Akademi Åbo and Elo, Veritas owners property direct former the between partnership alimited as restructured in Turku was centre shopping In late2015, Hansa of the in Espoo. ownership centre metro Niittykumpu in the recently most schemes, centre retail insome invested also has YieldOP-Rental fund years, recent In cities. in other ones larger some and area Helsinki the in centres smaller on concentrating centres, ”Several new retail property new retail property ”Several investment structures were investment structures set up in 2015” http://qgis.osgeo.org 47 4 Property sectors: market structure, practices and investment performance 48 4 Property sectors: market structure, practices and investment performance preferences of the investors and tenants. tenants. and investors of the preferences the to and unit of retail type the to both according significantly vary market retail inthe practices Rental practices Rental Lähikauppa. of Suomen acquisition of Kesko’s confirmation the to conditional is also deal portfolio property This Lähikauppa. Suomen to rented mostly portfolio property retail million a€90 acquire to aplan published 2016, Sagax Swedish the early In approval. authorities’ competition to subject is still merger The Lähikauppa. Suomen acquire to it plans late2015,In announced Kesko premises. in rented operates predominantly Lähikauppa Suomen whereas properties, supermarket its owns mostly Lidl of 7%. ashare with Lähikauppa followed Suomen by 8%, of some ashare with place third the to rose Lidl German In2014, the stores. smaller and supermarkets hypermarkets, – categories store in all operate 2014, They respectively. in 33% sales and of 46% of total shares Kesko, with and SGroup by is dominated market goods daily Finnish The transactions. major several in investors to properties sold have and strategies, finance property diversified more applied have they years, recent However, in buildings. supermarket and of hypermarket developers and owners major remain in particular, Kesko and SGroup operators, Retail investors. foreign attracted recently also has sector flow. cash This secure and leases long typically the to due institutions Finnish by favoured traditionally are investments supermarket and Hypermarket cities. in main supply space modern and population increasing the both by attracted market, Finnish the entered have chains retail international new several years, few past the During centres. shopping town out-of- with consumers for compete typically shops street high cities, regional In many in Helsinki. retail in prime owners retail significant also are Ilmarinen and Keva Sponda, as such investors office major aresult, as and, buildings, office in CBD located typically are shops street High Top 10 Shopping centres in Finland CENTER ITIS MYLLY MATKUS JUMBO IDEAPARK SELLO OMENA ISO WILLA VETURI KAARI NLA RETAIL 106,165 48,500 85,000 65,000 51,600 53,514 60,700 97,900 47,445 Niam 91,712 M Plc Kesko Ltd, Finland Wereldhave Oy Kuopio Centres Retail Ikano Plc Kesko HOK-Elanto, Elo, Unibail-Rodamco, investors Private Elo Etera, Keva, HOK-Elanto Ab, Oy EjendomsInvest Estate, Real CapMan Varma, Ltd Mylly Kauppakeskus Oy Finland Citycon Oy Kiinteistöt Ankkurikadun Ow ain ners the follow-up of KTI and the Finnish Council of Shopping of Shopping Council Finnish the and follow-upthe of KTI to in 2015. sales According retail overall the than better slightly performed centres shopping markets, retail the In 0.5-1.0% by only in 2016. grow to expected is consumption of private growth the sluggish: looks also sales retail for outlook The sales. their increased retailers specialty some while prices, food decreasing to due mainly 0.8%, by decreased goods of daily sales the categories: retailer between differences however,were, significant in 2015. poorly There perform to continued sales Retail retailThe market in 2016 small. rather typically is rent of turnover-based share the but centres, shopping in increasing is gradually leases of turnover use The leases. shorter have typically tenants Other leases. inshorter applied sometimes options renewal with 15 even years, and ten to of five leases have often tenants anchor centres, In shopping premises. of their management the steering organisations management property in-house strong have both Group S and Kesko rent. net with contracts long-term relatively typically are agreements and driven, cash-flow increasingly are investors properties, supermarket and hypermarket In especially. shops street in high applied typically are of terms kinds These period. time indefinite an for continued then are and period afixed for made first are agreements cases, many In years. is three space retail for term fixed minimum typical The agreements. with business their of continuity the ensure to want tenants as market, retail the in applied commonly more are terms Fixed market. office the in than retail in the longer normally are agreements Rental categories. retailer different between of sales development in the differences however, were, significant 1,8%. There by sales total and 3.0% by increased of visitors number the quarter, last the during and positive, more turned outlook the slightly, year of the Towards end the 0.6%. by decreased slightly, 0.4% by increased in 2015, sales centres but shopping Finnish in the of visitors amount the Centers, Source: Finnish Council of Shopping Centres Shopping of Council Finnish Source: L HELSINKI KUOPIO VANTAA LEMPÄÄLÄ ESPOO HYVINKÄÄ RAISIO RAISIO ESPOO HELSINKI KOUVOLA ocation prime retail rents have remained stable during the past past the during stable remained have rents retail prime centres, shopping best in the and CBD Helsinki In the Esplanad. Galleria and Citycenter Kamppi, Forum, Kluuvi, including centres, shopping several accommodates also centre city The streets. two these interconnecting streets as well as Esplanade Northern and Aleksanterinkatu include streets shopping main CBD’s The in Finland. area retail prime the as position undisputed an has CBD Helsinki The in the future. However, rents in the best locations remain remain locations best in the However, rents future. in the decrease to rents expected year. Respondents previous the as level same the is about which onaverage, month per sqm €110 at some stood CBD per Helsinki in the rents prime Barometer, Property RAKLI-KTI the to year. According ”Shopping centres performed performed centres ”Shopping better thanbetter retail sales on average in 2015” Total return on retail investments, 2000-2015 Prime retail rent in the Helsinki CBD eur/sqm/month 100 110 120 130 140 40 50 60 70 80 90 10 15 20

-5 1995 % 0 5 1996 Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000 1997 2001 1998 1999 2002 2000 2003 2001 2004 2002

2005 2003 2004 2006 2005 2007 2006 dwellings are in apartment buildings. in apartment are dwellings of the 44% than More homes. single-family are 40% about these, Of in Finland. dwellings million 2.6 some are There Stock sector residential Rental 4.3 of 4.2%. return atotal produced and in general, properties retail than slightly better performed centres Shopping at -2.3%. negative remained growth Capital 6.4%. to slightly 3.9% in 2015 (5.7% decreased in2014). return Income to amounted investments property onretail Total return healthy, 95%. atremained some portfolios property retail of investors’ major rate occupancy the (4.7% of 2014). database, end at the rental KTI the In of 2015 end at the at 4.6% stood markets retail metropolitan Helsinki for rate vacancy the Catella, to According to cyclical changes. changes. cyclical to vulnerable less be to seem and average, the above clearly 2008 2007 Total return 2008 2009 Source: RAKLI-KTIPropertyBarometer 2009 2010 2010 2011 2011 2012 2012 2013 2013 Source: KTIIndex 2014 2014 2015 2015 (autumn 2016) 49 4 Property sectors: market structure, practices and investment performance 50 4 Property sectors: market structure, practices and investment performance specific groups like students, elderly people or the disabled. disabled. the or people elderly likestudents, groups specific for housing offer who charities or foundations by is owned stock subsidised of the rest The years. in recent holdings subsidised their decreased thus have and strategy in their supply housing have, non-subsidised however, emphasised SATO and VVO in particular dwellings. subsidised own –e.g. VVO, –also SATO Avara and status utility public specific with companies sector Private companies. daughter municipalities’ by owned are dwellings of subsidised majority The housing. of rental development for subsidy interest an or loans state-guaranteed as subsidy, such of public kind some with provided havebeen 390,000 some apartments, these Of inFinland. apartments rental 820,000 some are there total, In at 32%. stands Finland whole for rate the while dwellings, in rented live 43% some of households area, metropolitan Helsinki whole the In rented. are dwellings of 48% all some and on average, country in the than common is more housing rented Helsinki, In houses. single-family and houses terraced and detached well as as apartments including housing, of forms in all is widespread ownership Home homes. in owner-occupied live 65% households Finnish of the About awhole. as country in the person per sqm 40 around to compared area, metropolitan Helsinki in the person per 35 at sqm some country, whole in the than lower is somewhat density housing the Helsinki, In region. Helsinki in the located are dwellings of all fourth one Some locations. in urban especially steadily, increased has dwellings smaller for demand the Therefore, 48%. is currently households single-person of share the InHelsinki, persons. two or of one consist 75% some households of Finnish Currently decreasing. constantly been has household of aFinnish size average The Photo: SATO common in major cities than ”Rented housing is more elsewhere in Finland” vary significantly between different forms. Some have Some forms. different between significantly vary subsidy of public types of different regulation and terms The 1970s. the from buildings for loans the of termination the by caused is mainly decrease The years. inrecent decreased has stock of subsidised supply total The portfolios rapidly. portfolios their expand to continued who funds property residential commonly most were purchasers transactions, these In companies. construction by sold buildings developed of newly transactions billion were €0.7 Some investors. two between buildings of existing transactions portfolio 43% some were of transactions, amount total the Of million. €600-700 to 2014, increased volume the in 2013 million, and and €200-300 between varied volumes transactions 2012, ever. until Up annual volume highest €1.2 to is the billion, which amounted portfolios property residential of rental volume 2015,In transactions the years. in recent dwellings in rental investments their increased also have households Finnish stock. subsidised of restrictions of the termination the through also amount, alesser to and, construction, new through both years, recent in markedly increased has stock The dwellings. 435,000 some to amounts currently stock housing rental Non-subsidised in late2016. force into come to is planned legislation proposed the and of March, end by due are comments The distribution. profit for possibilities their limit to time, same at the but, subsidies, public for entitled companies of the regulation utility public the ease would in regulation change planned Another comments. for circulated being is currently proposal This levels. rental moderate for low-income to tenants rented be have to dwellings the period which subsidy, during interest a 10-year on is based framework This cities. in major dwellings rental priced of moderately supply the boost to framework subsidy anew introduce to planning is currently government The support. housing public through subsidised be also Tenants may cost-based. are rents stock, subsidised of the majority in the and, selection tenant for rules strict specific rest of the subsidised stock is owned by private, non-profit non-profit private, by is owned stock subsidised of the rest The apartments. 47,000 around with segment in this player isbiggest the of Helsinki, city by the owned a company Oy, Heka municipalities. Finnish the by is owned dwellings, 240,000 some stock, housing subsidised of the majority The Players construction. housing non-subsidised of the 50% than is more region Helsinki of the share The construction. inresidential growth the for driver main the is currently stock housing residential rental for demand Investment buildings. of apartment kinds in different are 21,000 some dwellings, 2014. to started all Of in comparison a slight increase in2015, represents which started was 27,000 dwellings some of construction the Industries, Construction Finnish the of of RT, Confederation the estimations the to According ”Demand for”Demand rental housing total 824,000 rental apartments rental 824,000 total Ownership structure of in rental Finland apartments the growth inthe housing growth is the main for driver construction” construction” 237,000; 29% by player group transactions property residential Rental 153,000; 19% 1,000 1,200 1,400 MEUR 200 400 600 800 0 ■ From investor toinvestor ■ From developer toinvestor 2013 440 220 139,000; 17% 295,000; 36% 2014 340 360 Source: ARA,Statistics Finland,SuomenVuokranantajat,KTI some 140,000 dwellings. dwellings. 140,000 some of consists currently and years in recent rapidly increased has market investment residential professional so-called The households. mainly investors, small by – is owned dwellings 295,000 –about thirds two majority, some the stock residential rental of non-subsidised supply total the Of VVO, SATO Avara. include and segment inthis players significant most The companies. rental residential market. Residential properties are a are properties Residential market. residential rental inthe players significant also are funds pension Many holdings. subsidised their reduced have and stock subsidised innon- concentrated years, have, inrecent in particular SATO and VVO in Finland. companies investment property residential specialised biggest the VVO, are SATO Avara and ■ ■ (non-subsidised) ■ Households /privateinvestors (non-subsidised) ■ Subsidised /otherowner Subsidised /municipalities investors Professional ”Supply of rental housing has 2015 increased rapidly in recent 530 710 Source: KTI years” 51 4 Property sectors: market structure, practices and investment performance 52 4 Property sectors: market structure, practices and investment performance conditions. For the landlord, the notice period is minimum is minimum period notice the landlord, the For conditions. specific certain under contract the terminate only can landlord The month. one typically period, notice agreed an after contract the terminate to right the has tenant The notice. further until continues agreement the a year, as afterwards and such period, fixed onacertain agree to possible It is also period. indefinite an for made typically are agreements Rental levels. rental or periods rental for restrictions no are there Currently, 1990s. the during deregulated gradually were dwellings rental market free for Rents practices Rental APG. fund pension Dutch the by isof owned SATO. 23% company of the Another ownership share of the majority the acquired Balder company 2015, In market. the property however, listed Swedish the in investors direct major no low, are remained there and has market residential Finnish in the interest investor Foreign funds. investment mutual of special framework legislative the under operate which funds, open-ended are funds These investors. private to distribution for platform agood create networks branch whose Ålandsbanken and Management Pohjola Property Group’s OP by managed are investors at private targeted funds residential largest The of capital. plenty have attracted these and established, been have investors at private targeted funds new some years, two past the In institutions. at domestic targeted are Estate Real LocalTapiola and ICECAPITAL instance for by managed Funds investment. property residential in specialised funds property non-listed several currently are There funds. and companies property specialised through investment residential to exposure indirect significant have also institutions Many portfolios. in their dwellings rental thousand several have all Elo, instance, for and Keva Varma, Ilmarinen, and market, investment institutional in the sector recognised *Estimate Residential construction activity construction Residential Non-subsidised Total Subsidised Non-subsidised Started residential dwellings Single-family homes Single-family Subsidised Non-subsidised buildingsApartment funds investingfunds in residential ”Special mutual property property mutual ”Special properties haveproperties attracted plenty of households’ investment capital” investment 34,500 12,500 23,300 12,500 11,200 11,200 21,000 9,800 2010 11,000 11,600 21,200 33,700 12,700 8,500 8,500 2,500 2011 13,900 24,800 31,000 20,100 6,200 6,200 9,800 9,800 2012 Rents are typically indexed, with the cost of living index index of living cost the with indexed, typically are Rents period. rental the of length onthe depends also period the but months, three rental levels and tenant selection. In so-called ARA-housing ARA-housing Inso-called selection. tenant levels and rental both to related restrictions mightbe –there of subsidy form on the – depending stock housing subsidised In the buildings. and areas in different conditions market prevailing to increases rental adjust to landlord the allows and in particular, investors professional by used is of indexation kind This cent. 5per of 3or a minimum instance for increases, of level rental onahigher agree to common it is also conditions, Incurrent used. most the being in main cities in the coming years. years. coming in the cities in main dwellings rental for demand increase also will seekers asylum of number increasing an for Housing size. household average in decrease and urbanisation continuing by strengthened is demand The cities. major inthe apartments small for especially strong, remains housing rental for Demand negative. be to is expected development price the country, of the slightly, rest in the whereas increase to forecasted are prices area, metropolitan Helsinki Inthe significant. be to however, will, continue differences in 2016. Regional onaverage country whole 0.2%inthe by increase will prices housing PTT, Research Economic Pellervo to According housing. owner-occupied for demand sluggish the to due years two past the for flat been has prices of housing development 0.4%. by The increased prices area, metropolitan Helsinki In the on average. country whole in the 0.6% by some in 2015 dwellings decreased residential for prices Finland, of Statistics statistics preliminary the to According residentialThe market in 2016 applied. are size dwelling’s the to well as as prices rental and income tenant’s the both to related criteria subsidy, set ahousing receives tenant the where In cases buildings. of the period holding the to related are restrictions only the dwellings, In these levels. rental or selection tenant for restrictions no are there sector, construction in the employment and supply housing both stimulate to was ofwhich aim the 2009–2010, in subsidy interest specific the with produced In dwellings market-oriented. typically are rents but selection, tenant for conditions varying mightbe subsidy, there interest with produced dwellings some In cost-based. are rents used, are subsidies or loans housing state where stock, 13,400 19,800 28,100 21,700 6,400 6,400 8,100 8,100 2013 18,900 11,900 26,300 19,300 6,800 6,800 7,400 7,400 2014 Source: Statistics Finland, ARA, RT ARA, Finland, Statistics Source: 19,000 12,700 20,700 27,000 2015* 8,000 8,000 6,000 6,000 26,500 20,200 19,000 12,700 2016* 6,000 6,000 7,500 7,500 ratios of residential portfolios remain strong, at some 95-97% 95-97% at some strong, remain portfolios of residential ratios Occupancy in particular. areas residential developed in newly increased has of tenants supply, turnover With increasing the apartments. developed at well newly as as connections transport public good with at locations targeted currently is demand supply. Strongest increasing and conditions economic challenging both by is restricted growth Rental in 2016 2017. annum 1.5-2.5%and some by per increase will cities in main rents forecasts, KTI the to According down. of slowing signs some shows currently inrents Increase cities. in major growth rental drives in particular apartments small for demand strong 2-3.5% The some by annually. less, slightly increased have rents cities, main In other annum. per 3-4% some by increased have area metropolitan Helsinki in the rents residential years, five past In the Prices of old residential dwellings, index (1983=100) 100 200 300 400 500 Residential and price rent indexes, Helsinki metropolitan area

1985 Helsinki metropolitan area Helsinki metropolitan 100 120 140 160 180 200

1986 80 1987 2000 1988 –– Rents–– 1989 2001 1990 1991 2002

1992 Prices 2003 1993 Other areas 1994 2004 1995 2005 1996 1997 2006 1998 Whole Finland 1999 2007 2000 due to increasing supply. increasing to due year, past the slightly during have decreased but on average, the KTI Index every year since 2008, and it continued to to it continued and 2008, since year every Index KTI the in sector performing best the been has Residential Index. in the 31%, to sector biggest it the made increased which database index total of the share properties’ residential 2015, In market. investment in the proportion sector’s in the increase the for driver main is the which strong, remained has performance investment properties’ Residential 2008 2001 2002 2009

2003 of the total investment market ”Residential share properties’ 2010 2004 has increased markedly” 2005 2011 Source: KTIandStatisticsFinland 2006 2007 2012

2008 2013 2009 2010 2014 2011

Source: StatisticsFinland 2015 2012 2013 2014 2015 53 4 Property sectors: market structure, practices and investment performance 54 4 Property sectors: market structure, practices and investment performance market. in the attractiveness their increased also have buildings educational instance, for properties, of public kinds other years, past the during but properties, at healthcare targeted mainly first was interest Investor years. in recent market investment in the attractiveness their increased have services of public kinds of different supply the for used Properties Stock 4.4 Public use properties values. rental increasing and yields decreasing by both supported was growth of 5.4%. income of Capital 3.4%, net and growth a capital (8.2% 8.9% to in 2014), amounted of consisting properties onresidential 2015, In return years. the total throughout positive remained has well in 2015. growth Capital perform Helsinki metropolitan area and other major cities major other and area Helsinki metropolitan Residential index, rent KTI 10 12 -4 -2 % 0 2 4 6 8 Market rents, new agreements Annual changeandforecast

2000-2015 investments, property Total residential on return 2001

2002 Helsinki metropolitan area Helsinki metropolitan 10 12 14 % 0 2 4 6 8 2003 Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000 2004 2001 2005 2002

2003 2006 2004

2007 Other majorcities 2005

2006 2008

2007 2009 properties to highly specialised large hospital buildings buildings hospital large specialised highly to properties office normal from varying segment market diversified a are services of public provision the for used Properties 2008 years. coming in the markedly increase to is expected segment ofmarket this potential Investment provision. service for needed premises the and services the both providing for opportunities alternative in considering interested increasingly are operators sector public the also and investors, private attract to started recently just has market The properties. of these owners predominant the are still state Finnish the and Municipalities groups. target specific for offered housing serviced and Total return 2010 2009

2010 2011

2011 2012 2012

2013 2013 Source: KTIIndex 2014 2014 2015 2015

2016

2017 Source: KTI larger medical centre / hospital properties in Turku. properties /hospital centre medical larger two acquired in 2015, but small, fund the rather are assets fund’s of the Most Finland. across properties in 35 healthcare invested has fund The Rahastoyhtiö. Titanium by managed is properties inhealthcare investing fund investment special Another million. of €430 value atotal with 123to assets portfolio property its increased fund the acquisition recent the Through capital. investors’ alot of private attracted has fund The Bank. eQ by managed and Hoivakiinteistöt eQ as known is currently fund the and Management, Fund in2012 Finnreit by founded was properties inhealthcare investing fund investment special first The 2014. in spring fund healthcare another launched Capital Horizon of €155price Northern million. 2016 in early the for Hoivakiinteistöt, eQ fund, specialised another to properties the selling by fund the exited manager in 2007. The founded was Capital, Horizon Northern by I,managed Healthcare EPI sector, property healthcare the in fund first The people. elderly for facilities living assisted at mainly targeted been typically have sector healthcare in investments Pension funds’ investors. foreign specialised some and funds property domestic investors, institutional include sector investment property healthcare inthe Players sector. in this investors property and providers service both for opportunities new up opened has This strategies. traditional their for solutions alternative for search to them force finances weak municipalities’ cases, many In sectors. these in provision service inthe change structural the with well as as population, of the ageing the with together is increasing properties sector social other and healthcare for demand The Players investors. sector private from premises office normal rent to organisations sector public for common increasingly It is also facilities. sports well as as buildings cultural and educational some instance, for own, investors sector Private providers. service sector public for rented are that assets individual some are there portfolios, investors’ In properties. of these supply total the to in relation small very is still investments private of amount the segments, property use public other the In €1 slightlyabove of 2015. end at billion the was investors professional by owned properties healthcare the of value market the estimates, KTI the to 2014. According 12.1 of some to end at the sqm million amounted facilities of healthcare stock total the Finland, Statistics to According facilities. the operate and services social provide also which organisations, sector public other and by municipalities owned been traditionally have facilities of these most context, Finnish the In properties. hospital even and facilities medical facilities, care day people), disabled well as as children’s patients mental and (e.g. dementia people, elderly groups target different for homes nursing and facilities living of assisted consisting segment market a diversified are properties Healthcare ”Public use properties’ stable properties’ ”Public use cash flows investors” attract whereas in premises adaptable to various users, normal office office normal users, various to adaptable in premises whereas long, rather typically are agreements rental properties, use special In in question. property of the type on the depend sector property use public in the practices Market practices Market Helsinki. in Kalasatama, construction under is currently which centre, wellbeing and health new the acquired who Deka, German the well as as properties, use of public kinds several 2016, in late2015in Finland early acquiring by and investments first its made who Hemfosa, Swedish the include sector property use public in the investors foreign Other in Pori. property school large another acquired In2015, Hemsö properties. in healthcare investments first its 2014, In inTurku. made company the property educational one in2013 market Finnish the acquiring by entered Hemsö sector. property healthcare Finnish in the investor foreign largest the is currently Hemsö Swedish The in 2014. established was which II, Trevian Care fund, healthcare one manages currently Management Trevian Asset the latter only contributes to the 2016 the to volumes. contributes only latter the million, of which €50 and €54 to amounted transactions two ever. Hemfosa’s transaction property healthcare Finnish 2016 largest the €155 in early was portfolio million of the acquisition eQ’s transactions. small rather mostly of inseveral, 2015 volume consisted transaction total The 50%. about for accounted properties healthcare which million, of €500 some to increased volume transaction Their in 2015. capital new attracting continued properties use Public 2016 in Market income. net by driven strongly are investments sense, this In refurbishments. for even cases, in many and, insurances, and tax property maintenance, the for is responsible tenant the where leases, net commonly most are agreements Lease 10-15 years. long, instance for typically are properties of healthcare Leases operator. aprivate to further premises the leases or itself services the provides either which municipality, a to rented directly be can properties cases, some In investors. and developers property the for demands certain set also requirements These property. the of use specific onthe depending vary which requirements, technical strict fulfil and authorities the by approved be to need facilities the Even companies. solid financially be to need operators thatthe means also which authorities, from a licence for apply have to operators the sectors, service most In municipalities. the to services their provide typically who operators, private to rented are investors private by owned properties of healthcare majority The applied. be can practices market ”Increasing investment investment ”Increasing potential in public use properties” 55 4 Property sectors: market structure, practices and investment performance 56 4 Property sectors: market structure, practices and investment performance in the Vuosaari Harbour area in Helsinki. in Helsinki. area Harbour Vuosaari in the located are properties The Sponda. from portfolio property oflogistics a€100 million acquisition the through in Finland investments its Oy. increased late2015, In Logicor Logicor to name its changed 2016, company.of the early In Certeum owner majority the became thus which Logicor, Blackstone’s to company in the shares of their 50% Varma and 100% sold 2015, Sponda During III. and I,II Funds Sponda and Varma of Sponda, €917 price from million a purchase for properties industrial and 120 than logistics of more aportfolio acquired company the in 2014, Ltd foundation, its upon and Certeum as founded was company The sector. property logistics in the investor specialised largest the is currently Logicor corporations. retail and industrial large instance, for include, owner-occupiers Big owner-occupied. be to 85% is estimated about properties, warehouse and of industrial stock total the Of players. foreign and funds property institutions, domestic including investors new is attracting sector emerging This investors. to properties of their many sold have occupiers as years, in recent changed has situation the but market, property light manufacturing and logistics in the common recently, relatively very until up was, Owner-occupation Players space. logistics efficient modern towards demand space the reshaping and increasing are systems logistics and chains supply of reorganisations well as as sales of retail restructuring trade, foreign well. as Increasing markets investment the in sector of this emergence in the recently, resulting quite emerged has players other from demand and market, the dominated have players major These systems. logistics and warehousing in-house centralised pursued traditionally have chains retail major the context, Finnish In the area. metropolitan Helsinki the surrounding connections, traffic good with in municipalities increased has supply the In particular, connections. traffic new and demand in space changes of both aresult as years in recent rapidly developed has in particular properties of logistics stock the these, Of sub-categories. main the are properties logistics and warehousing modern and properties manufacturing light market, investment the In owner-occupied. typically are properties manufacturing corporations’ industrial Large basis. customer and investor a heterogeneous well as as practices, and structures market varying with sub-categories various into divided be can market property industrial The 13%. some for accounts area metropolitan Helsinki the this, Of Finland. Statistics to according metres, square million 68 some to amounts stock property logistics and Industrial Stock 4.5 Industrial /logistics market operators. and types asset locations, different between significantly varies and question in property onthe depends However, always yield the yields. investment pressured has demand investment Strong Because of the heterogeneity of both the available stock stock available the of both heterogeneity of the Because practices Market Group. Indoor company furniture the for centre logistics amajor instance, for it owns, where inLahti, holdings Renor.significant It has company investment and development is property sector property logistics in the player Another properties. in logistics mainly investing fund one Pohjola manages also managers, fund domestic the Of portfolios. ininstitutional also represented typically are properties industrial and Logistics 2015. in spring Group Posti from a€120 bought portfolio million company The market. investment property logistics Finnish in the is anewcomer & Partners Risan Ness, in2015. Norwegian The acquisitions new several made also they and facilities, Pelican self-storage of achain including assets, warehousing and of logistics types in different invest also NREP by managed Funds in 2015. transactions several through portfolio Finnish its increasing continued Sagax AB company listed Swedish The completed in 2015.completed was centre logistics sqm 52,000 vicinity, Schenker’s the DB In properties. supporting some and terminal cargo a new developing are Finavia and Finnair where area, airport the in concentrated is currently area metropolitan Helsinki the in properties industrial and of logistics development New million). (€100 (€120 Logicor million) Blackstone’s and & Partners Risan Ness, by out carried those were transactions biggest The million. €600 some to amounted properties industrial and of logistics volume 2015,In transactions total the higher. clearly are in Vantaa, rents the area €10-11 at some stand airport the In sqm. per municipalities surrounding and area metropolitan Helsinki inthe areas logistics best the levels for rental quartile upper the database, KTI the In costs. construction high by explained partly high, relatively are premises logistics modern levels for rental comparison, However, international in stable. fairly remained slightly or decreased have rents demand, weak to Due recent years. 85% and in 80 between havevaried premises industrial and logistics for rates occupancy database, rental KTI the In conditions. economic by pressured demand weak and supply space new both to due years in recent increased have properties logistics and industrial modern for rates Vacancy 2016 industrialThe /logistics market in rating. tenant’s the by determined partly levels are rental of leases, kinds Inthese years. fifteen or ten is typically period the contracts, fixed-term In buildings. in multi-tenant premises smaller for used only are leases gross Finnish Traditional rents. triple-net or net typically are Rents markets. logistics and industrial in the vary practices rental needs, user and has recently foreign attracted ”Logistics property sector property ”Logistics investors” net rental agreements. The operator is responsible for all all for is responsible operator The agreements. rental net long, triple favour typically investors property hotel Finnish 2017. in summer George St. hotel newest its open will group The of Helsinki. centre city in hotels the design and 7 luxury operates currently which hotelchain, growing is a Hotels Collection 17 with Western Kämp hotels. Best 27followed have by each, Hotels hotels Scandic and Hotels Finlandia chains. inits hotels 46 has currently instance, for Indigo, and Inn Holiday Rantasipi, Cumulus, brands the under hotels operates which Restel, country. the across hotels 50 than more with in Finland, operator hotel biggest is the SGroup rooms. of hotel supply of the half than more for account together all which Scandic, and Restel SGroup, include in Finland operators hotel main The properties. hotel some own also in particular, S Group operators, Some portfolios. in their properties hotel hold some also institutions biggest of the Most centre. conference one and of 14 hotels aportfolio with Pandox Swedish the and Finland, in properties hotel 39 owns which fund, hotel CapMan’s are in Finland owners hotelproperty biggest two The Players rooms. 51,000 some comprising Finland, in hotels 626 are there Finland, Statistics to According Stock Hotels 4.6 remained negative. growth Capital level, at ahigh at 8.0%. remained income (4.6% of 6.2% in 2014). return atotal Net produced sector 2015, In years. the in recent poor relatively been has sector /warehouse industrial of the performance investment The underway. projects centre data and logistics some are there 2016. Tampere the In region, summer by completed be to is scheduled project Freeway of the phase first sqm 77,000 SGroup’s of Helsinki, north In Sipoo, 2000-2015 Total return investments, on industrial property 10 12 14 -6 -4 -2 % 0 2 4 6 8 ––– ■Capitalgrowth ■ Incomereturn 2000

2001

2002

2003

2004

2005

2006

2007 landlord and tenant might be allocated differently. allocated be might tenant and landlord the between responsibilities use, inretail example, for space, of other amount is asignificant there where centres city in properties some In costs. operational and maintenance total return of 5.2% in 2015. return total a delivered properties hotel Index, KTI the to According project. in the invested has Keva airport. Helsinki at the construction is hotel under Clarion Another Clarion. for developed is being centre congress and hotel room 400 over an where Helsinki, inJätkäsaari, underway project is hotel amajor there addition, In started. be to about just are more two and underway currently are of projects kinds Two Elo, respectively. and similar Ilmarinen funds pension Finnish by owned are Properties properties. old office from redeveloped were of which both CBD, Helsinki in the opened –were Roberts Lilla and 2015,In –Indigo hotels new two 40%. to close remain they of Finland, parts eastern and northern inthe while 60%, is above rate occupancy region, Uusimaa inthe regions: between differences however, are, significant There 2000s. whole in the 50% around remained has ofrooms hotel rate occupancy The Switzerland. and China UK, the France, Japan, Germany, from of visitors numbers in the increase by the compensated was tourists of Russian number inthe decrease The hotels. inFinnish group visitor foreign biggest the however, remained, have Russians Finland. visiting tourists of Russian number in the seen was decrease biggest year. The previous the to in 2015 stable compared in remained hotels spent of nights amount the Finland, Statistics to According hotelsThe market in 2016 2008 Total return 2009

2010 ”Hotel stock is increasing in 2011

2012

2013 Source: KTIIndex

Helsinki” 2014

2015 57 4 Property sectors: market structure, practices and investment performance 58 5 Property markets in different regions – outlook for 2016 or retail, which are driven by consumer markets. markets. consumer by driven are which retail, or residential as such sectors selected oncertain concentrate typically but cities, in smaller invest players domestic major Some owner-occupiers. and investors local by dominated traditionally are regions city insmaller markets Property strategies. investment in their markets target as centres” “growth these and area Helsinki the define investors domestic Many areas. market in these only operate who players local some are there cities, these In institutions. domestic among popular traditionally –are Lahti and Kuopio Turku, Jyväskylä, of Tampere, Oulu, centres growth regional the – typically markets second-tier The area. metropolitan Helsinki in the made were in 2015, 55% to close transactions of all market: transactions inthe reflected is also position region’s capital The area. metropolitan Helsinki in the located are 68% around Index, KTI in the included properties the all Of region. capital in the invest only of whom many investors, foreign among is well-recognised area The area. metropolitan Helsinki in the concentrated is also market investment property institutional The 60%. is some share its value, by Measured area. metropolitan Helsinki in the is located inFinland stock office 45% total of the some markets: office in the prominent most is the dominance Its market. property Finnish in the region Vantaa, dominant and is the Kauniainen of Espoo, cities neighbouring immediate the and Helsinki of City of the consisting area, metropolitan Helsinki The outlook for 2016 different regions– marketsin 5 Property Percentage of jobs, 2014 jobs, of Percentage structureThe of the economy area hasarea adominant position ”The Helsinki”The metropolitan in the Finnish property 16.1% market” 13.9% HELSINKI REGION 24.9% 0.4% 44.7% andforestry ■ Agriculture ■ Retail ■ Manufacturing ■ Publicservices ■ Privateservices Population: perspective. market property the from significant is also importance its that means which in Finland, position adominant has region Helsinki the GDP. Finnish of the respects, many In 36% some 31% about delivers for and jobs of all accounts population, 26% Finnish of the it accommodates but country, entire of the 1.2% for area of the accounts area land region’s The of 14 consists municipalities. region Helsinki entire The cities. in these concentrated are region Helsinki of the population of the majority the and activities, administration Jobs, area. metropolitan Helsinki in the located are agencies government well as as headquarters of company 1.1 major Most people. million apopulation has Kauniainen, Vantaa and Espoo, Helsinki, of cities of the consisting area, metropolitan Helsinki The area 5.1 Helsinki metropolitan The is lower - 25% - compared to 28% in the entire country. 28% entire to in the is -25% lower -compared sector public in the of jobs However, proportion the of jobs. structure and profile knowledge the impacts also of Finland centre administrative the as position region’s The country. whole in the than region Helsinki in the role a stronger have businesses logistics and trade wholesale industries, high-tech well as as services professional Specialist in construction. are 40% nearly region, in the occupations (16%) (22%). country industrial the Of entire in the than lower is clearly occupations of industrial proportion the hand, other the On country. entire the 33%to across – compared –44% higher is significantly sector service private in the of jobs proportion the region, Helsinki the In base: Economic 21.8% 12.0% WHOLE FINLAND 4.5% Helsinki region: 1,430,700 region: Helsinki 215,000 Vantaa: Espoo: 270,000 621,000 Helsinki: logistics, public sector services sector public logistics, trade, wholesale services, financial Information industries, professional and and professional industries, Information 28.4% Source: HelsinkiChamber ofCommerce 33.3%

the Helsinki airport and several significant residential areas areas residential significant several and airport Helsinki the connects which Road, Rail Ring The network. transportation in public investments major by supported being currently is area metropolitan Helsinki of the growth The region. Helsinki in the be to expected growth in 2016, 2.5% by biggest the with increase to volumes construction forecasts RT region. Helsinki inthe is concentrated construction residential country’s entire of RT, the half about Industries Construction Finnish of the Confederation the to According of construction. level the maintains of population increase continuing The occupations. industrial and trades retail and in wholesale negative remained growth markedly. The increased also turnover sector’s construction The increasing. continued of jobs number and production both services consumer and in professional well as as sectors media and information Inthe sectors. business between differences significant in 2015. were region However, there Helsinki in the stable remained of jobs number and of production amount The area Helsinki metropolitan the in areas office Main © OpenStreetMap contributors @ Helsinki City Survey Division, the municipalities of Helsinki Region and HSY, 2014. Licence; Helsinki City Survey Division’s open open Division’s Survey City 2016. 2/ KTI. by Helsinki map the to Licence; HSY, 2014. and Additions 1.0. Region licence Helsinki of data municipalities the Division, Survey City @Helsinki contributors © OpenStreetMap - QGIS Development Team, 2015, QGIS Geographic Information Open System. Source Foundation Geospatial Project. 2.12.2 QGIS using created Map area continuesarea to grow, which ”The Helsinki”The metropolitan supports construction and and construction supports service sectors” service CBD (Kamppi, Forum, Galleria Esplanad, Citycenter and and Citycenter Esplanad, Galleria Forum, (Kamppi, CBD Omena), Helsinki (Iso inwell the as as Matinkylä and (Jumbo) (Sello), (Itis), Aviapolis Leppävaara in Itäkeskus located are centres shopping Main in Vantaa. Tikkurila and in Espoo of Tapiola centres regional include areas important other Leppävaara, and CBD the to inaddition markets, retail the In in Vantaa. area airport the and inEspoo Leppävaara and Keilaniemi Helsinki, in areas Pasila-Vallila-Kalasatama the and Ruoholahti include locations office prime other CBD, the Outside location. market retail and office prime the as both position undisputable an (CBD) has district business central Helsinki the markets, property area metropolitan Within Helsinki the government. current the by supported be to likely is currently Line Rail Joker the especially but funding, onstate dependent are projects latter two city. The inner in the transportation public ease would which Hakaniemi, Töölö, Station, and Pasila Central between planned is being connection rail Pisara called so the Furthermore, Helsinki. of parts northern the through go would which in Helsinki, Itäkeskus to in Espoo Keilaniemi from connection tram fast Joker, a Rail called a so for plans are there developments, these to addition In started. be will extension western summer 2016, after which the construction of the further further of the construction the which 2016, after summer in completed be to is scheduled work development where in Espoo, Matinkylä to extended is nowline being Metro in 2015. Western completed The was centre, city the with http://qgis.osgeo.org Source: KTI, RPT Docu Oy Docu RPT KTI, Source: 59 5 Property markets in different regions – outlook for 2016 60 5 Property markets in different regions – outlook for 2016 for instance in the Malmi airport area. area. airport Malmi in the instance for construction, for areas new zoning by place take would rest The hubs. connection rail important most of the vicinity in the density building increased through enabled be would third Another boulevards. city new the through expanded be city, will inner which inthe place take to is planned development of new third one plan, about master new In the Herttoniemi. and Pitäjänmäki areas industrial and office traditional the well as as axis, Pasila-Vallila-Kalasatama extending the instance for include, supply property commercial increasing with Areas boulevards. city these around built workplaces and housing of neighborhoods mixed new with boulevards city urban into routes traffic incoming of current transformation the well as as planned, being are connections rail plan, new the In Pasila. towards city inner of the extension northward and centre city in the density increasing things, other among outlines, plan The in 2050. in Helsinki jobs 560,000 and inhabitants 865,000 be will there that on aprediction is plan based master city Helsinki anew for proposal The Helsinki 5.1.1 in Helsinki. is located 50% about this, Of sqm. million 3.8 about to amounts area metropolitan of the stock space Retail of offices. 0.9 sqm million Vantaa about and 1.8million sqm about accommodates Espoo in Helsinki. is located sqm 5.8 million some area, metropolitan Helsinki in the of offices stock total sqm million 8.6 around Of (Tripla). Pasila and (REDI) in Kalasatama developed being currently are centres shopping major New Kluuvi). ”The new Helsinki”The master plan is based on agrowth estimate new of 250,000 inhabitants by 2050” by inhabitants and by property sector,and by property EUR billion stock, estimatedCommercial values property by region Warehouse/logistics, area Helsinkimetropolitan Other industrial, Helsinki metropolitan area Other industrial,Helsinkimetropolitan * Turku, Tampere, Oulu,Lahti,JyväskyläandKuopio Warehouse/logistics, othermajorcities* Other industrial,othermajorcities* Warehouse/logistics, otherFinland Office, Helsinki metropolitan area Helsinkimetropolitan Office, Retail, Helsinki metropolitan area Retail, Helsinkimetropolitan Other industrial,otherFinland Office, othermajorcities* Office, Retail, othermajorcities* Office, otherFinland Office, Retail, otherFinland 0 5 and several cultural buildings. cultural several and functions administrative sector public important most the accommodates also area small geographically This markets. property retail and office in the both in Finland submarket property single important most is the CBD Helsinki The HelsinkiThe CentralBusiness District to various kinds of professional service firms. service of professional kinds various to rented mostly and redeveloped be to CBD, in the located also were which old premises, their freed Töölönlahtithe area in buildings new of the many to old premises from moving Occupiers redevelopment. active through improved and increased has CBD Helsinki in the supply space the area, Töölönlahti inthe construction new the to addition In in 2018. completed in 2015 be will and started was of which construction the library, central new the accommodate also will Töölönlahti area The space. office of modern sqm 40,000 some accommodates area the In total, station. railway main of the vicinity in the Töölönlahti area of development the through mainly years, in recent markedly increased has space office of modern supply the CBD, the In region. in the location office preferred most the remains and attractiveness its maintained has CBD Helsinki the area, Helsinki in the areas in other stock office of modern of supply increase the Despite of occupiers. needs well the to responds and refurbished, and well maintained it is mostly but 1900s, early and late1800s in the built was CBD in the stock office of the majority The offices. ministries’ and headquarters company some with –together etc banks, investment firms, law consultancies, –business services business-to-business offering companies mostly are centre city in the users Office 10 ”Several office buildings office ”Several have been converted into hotel or residential in use the CBD” 15 20 Source: KTI 25 Helsinki CBD (KTI Rental index area) in late2015. 85% at some stood offices CBD of the rate occupancy the database, rental KTI the In CBD. in the also space vacant of amount the increased recently has conditions economic tight and supply space of increased combination The plot. onthe built be will properties office new and demolished, be to now planned are of Helsinki City the by used formerly buildings old office two Kasarmikatu, In use. original their for restored now being are and offices as developed later were but residential, as built originally ,in fact, were use residential into now converted are that buildings office Several CBD. in the in Kluuvi use hotel into redeveloped be to is planned building old one cinema Also Kamppi. in started be to about is just George St. and underway currently is also project hotel F6 The opened. –were Indigo and Roberts –Lilla buildings old office from converted 2015, In hotels use. new two residential or hotel either to converted been also have CBD inthe buildings Several Additions to the map by KTI. 2/2016. KTI. by map the to Additions © OpenStreetMap contributors - QGIS Development Team, 2015, QGIS Geographic Information Open System. Source Foundation Geospatial Project. 2.12.2 QGIS using created Map than for other areas in the Helsinki metropolitan area. metropolitan Helsinki in the areas other for than of Helsinki areas central in the rents office for development positive more expects forecast 2015. KTI the Also during positive slightly more turned CBD in the rents office for outlook the Barometer, Property RAKLI-KTI In the them. between streets inthe well as as Esplanades the and Aleksanterinkatu in area, Kluuvi in the found be can CBD in the premises expensive most The below €30. were and decreased rents top the but sqm, at per €27 remained agreements rental in new rent market median The of 0.6%. increase annual showed an Index the and increasing, stopped rents 2015, In of 1-2% years. however, increase in recent a stable shown has offices CBD Helsinki the for index rental KTI’s ”The Helsinki has ”The CBD in challenging market proven its resilience http://qgis.osgeo.org conditions” 61 5 Property markets in different regions – outlook for 2016 62 5 Property markets in different regions – outlook for 2016 station. The main shopping streets include Aleksanterinkatu Aleksanterinkatu include streets shopping main The station. railway main the to next Citycenter and area, Kluuvi in the Kluuvi and Esplanad Galleria area, Kamppi in the Forum and Kamppi include CBD in the centres shopping Main supported by both rental growth and yield compression. yield and growth rental both by supported in 2015, 6.7% to accelerated offices CBD of Helsinki growth capital the Index, KTI the In negative. clearly been has growth capital areas, other in most though even years, recent in offices CBD in Helsinki values in market increase the maintained have yields decreasing and growth rental Healthy use. residential into redeveloped be to Properties Senate state’s the from building one acquired Rakennus Lapis and use, hotel into redeveloped be to building a office major bought fund Nordic CapMan’s tenants. attract to in order redevelopment need that buildings bought both who Schroders, and Yield fund by, made OP-Rental were instance, for acquisitions office significant Other Etera. from buildings Töölönlahti office new of the one bought who Investment, by Union year in the early out carried was transaction 2015,In office biggest the this. than lower clearly are properties at 5%, in late2015. best Yields very the for all-time-low, at an stood in 2015. average The decreasing continued CBD Helsinki the for yields office prime survey, Barometer Property RAKLI-KTI the to According offices RentalKTI index, Helsinki CBD 100 120 140 160 180 200 80

03-1995 Rental index(HelsinkiCBD1993=100)

Helsinki at CBD an all-time- 03-1996

”Prime office yields office ”Prime in the 03-1997 CBD supported byCBD both rental growth and yieldrental growth ”Capital in the growth 03-1998 03-1999 03-2000 compression” 03-2001 03-2002

low” 03-2003 03-2004 03-2005

Source: KTIandStatisticsFinland 03-2006 03-2007 03-2008 Inflation (1995=100) 03-2009 03-2010 03-2011 03-2012 03-2013 03-2014 03-2015 The amount of vacant retail space remains low in the CBD, low CBD, in the remains space retail of vacant amount The locations. shopping important pedestrian areas have been developed around the most extensive years, In recent streets. two these between located is store department Stockmann traditional The streets. two these connecting streets the and Esplanade Northern and and the rest of Helsinki, median rents rental forecast,KTI Helsinki CBD amount of vacant space increased markedly in the area, due due area, in the markedly increased space of vacant amount the ago, of years Acouple onaverage. month per sqm per €23-24 at some stand currently in Ruoholahti rents Office companies. insurance and banks consultancies, business companies, industrial and high-tech as such of businesses, avariety accommodate area Salmisaari adjacent the and Ruoholahti route. radial of western amajor point starting at the CBD the near area office is amodern Ruoholahti Salmisaari – Ruoholahti Mirri. and Musti shop pet and Expert retailer electronics Hamley’s, store toy the to, instance, for rented recently been have premises shop-in-shop where store, department Stockmann traditional of the development the is also change major One locations. central in very stores opened have Plantagen and K-rauta Gigantti, XXL, example, for and, recently, premises of large users some attracted also have CBD in the centres shopping hand, other the On locations. expensive most in the stores by opening market Finnish the entered have brands luxury international some hand, one the On of years. couple past the during markedly changed has CBD Helsinki in the premises of retail base tenant The at €110 stood rent sqm. average per the and in late 2015, positive slightly more turned rents retail CBD’s the for outlook the Barometer, Property RAKLI-KTI the In premises. small for month €130 per at some sqm per currently stands rents of retail quartile upper the database, rental KTI Inthe years. slightly in recent increased it has although 10 15 20 25 30 €/sqm/month 5

*Forecast 2000

”The Helsinki retailer ”The CBD 2001 2002 2003

base is evolving” 2004

2005 Rents (CBD) 2006 2007 2008 2009 Rents (rest ofHelsinki) Rents (rest 2010 2011 2012 2013 2014

Source: KTI 2015 2016* 2017* will move to Ruoholahti in 2016. Ruoholahti move to will Outokumpu and Services Financial of Finnish Federation The Handelsbanken, instance, For area. inthe investor major is a Varma, who company insurance pension instance for by, published been have lettings major and tenants new attracted year, has Within however, past Center. the area the Research Nokia major of the closing the to, instance, for in 2016. Rental residential development is currently active active is currently development residential in 2016. Rental started be to is planned Construction building. hotel one and buildings residential two office, of one consisting area, inlate 2016.the block Wood SRV the is planning City in completed be to planned and underway is also centre congress and hotel Clarion of a16-store construction The area. in the built being is currently terminal passenger new a and area, in the located is still Tallinn Petersburg St and to ferries passenger serving West Harbour The Vuosaari. to operations its moved harbour the after development for freed was which area, Jätkäsaari growing is the Ruoholahti to Next Group. Kesko by operated and rented and bySponda owned centre, shopping Ruoholahti in the is concentrated in Ruoholahti space Retail up. picks demand space the before started be likely to not are projects new but area, Salmisaari in the projects development office planned some Technopolis and have Sponda Both transaction. portfolio Antilooppi-Ilmarinen inthe included buildings office two were area in the 2015,In transactions major only the funds. international some well as as companies property and institutions domestic include area in the Investors Photo: City of Helsinki / Tero Pajukallio ”Major lettings increase the office occupancy rate occupancy office in Ruoholahti” Both commercial and residential property stock in Pasila in Pasila stock property residential and commercial Both media companies. and service business and companies insurance agencies, city and government including users, of office mixture acolourful accommodates currently Pasila station. of the south area machinery old the railroad and areas Pasila Upper and Northern Ilmala, developing the Pasila, Western and of Eastern submarkets traditional including areas several of consists Pasila centre. city of the north area market property multifaceted and hub railway important is an Pasila Vuosaari. to operations its moved harbour the when development for released was land where area, Kalasatama developing is the there Sörnäinen, to Adjacent areas. in these stock old property and new the between rates occupancy levels and in rental differences significant are supply. There office amultifaceted by characterised are areas Vallila. and These Sörnäinen Pasila, include centre city of the out somewhat situated areas office traditional Other Pasila –Vallila –Kalasatama developed. be to planned are properties hotel and commercial residential, area, the In Jätkäsaari. to next area, land Telakkaranta of the development the planning is currently Skanska 2030. by 17,000 inhabitants some accommodate to is planned area The in Jätkäsaari. will be built in several phases by 2022, and will include a include will and 2022, by phases in several built be will complex sqm in 2015. 183,000 works The construction land with started was Tripla project three-block the station, railway current of the surroundings inthe area, Pasila Central Inthe redevelopment. major under is currently Pasila respectively. 8,600 and of 25,000 figures current to compared residents, 20,000 and jobs 50,000 some accommodate would area the plans, long-term city’s the In significantly. increase to planned are 63 5 Property markets in different regions – outlook for 2016 64 5 Property markets in different regions – outlook for 2016 accommodate some 20,000 people and 8,000 jobs. 8,000 and people 20,000 some accommodate to is planned area the 2030, in about completed When development. property new extensive and infrastructure in investments significant requires development where and combined, be will services private and public and working living, where area is another Kalasatama area. Kalasatama developing is the Sörnäinen to Adjacent in Vallila Sörnäinen. and stock office modern and older between markedly vary Rents buildings. office refurbished many accommodates currently which area, harbour and industrial atraditional Sörnäinen, Vallila to is Next employees. 3,000 about accommodates in2015, completed was and campus office head sqm 58,000 Group’s OP companies. telecommunications and banks example, for accommodating, currently Pasila, to next area light industrial and office Vallila is a traditional in 2015.sqm €18.50 at some per stood agreements in new rent average the database, rental KTI’s In area. in the stock modern and older between 2017. significantly during levels vary Rental Pasila move to to plans their published Group VR and Bank Danske instance, for and, completed, were lettings major in2015. Some decreased inPasila rate vacancy Office Pasila. to back and Hakaniemi centre, Töölö, via city in a tunnel Helsinki the run and in Pasila start would railway loop-shaped The centre. city Helsinki the under trains commuter for line railway urban an be will which (Pisararata), project Loop Rail City called a so planning is also 2015. City inJuly The completed was which airport, the to connection train direct the through further enhanced was hub rail important an as position Pasila’s area. in the sqm, 22,000 some comprising properties, office two develop to plans its published 2016, Hartela early In also building. the in tenant main is the Sweco group engineering Consulting completed. was project Ilmalanrinne of Sponda’s phase sqm 15,000 2015, In area. in the first the is developer amajor Pension Fund, YLE the with together Sponda, properties. office and residential both accommodate will areas These station. railway of the north areas Pasila Northern and Ilmala the develop, to plans major instance, for also are There company. development in the co-investors as joined Onvest and Fennia Etera, investors in late2015, and project, in the domestic developer main is the YIT offices. and hotels buildings, hub, residential transportation public facilities, parking centre, shopping ”Office demand”Office in Pasila ”The Pasila is area ”The under major development” major increased in 2015” construction. construction. under currently are none although area, Kalasatama the in projects office planning are investors and developers Several area. in the completed be to about just also are Sciences of Applied University DIAK the for premises 2015. New in summer Immobilien Deka to sold was centre The in Kalasatama. constructed being is currently centre well-being and health sqm 20,000 of Helsinki’s City The 2022. by completed be to is scheduled centre whole The completed. be also will towers residential first the when in2018, opened be to is planned centre shopping The funds. life and LocalTapiola’s and insurance funds Group’s OP Ilmarinen, fund pension include SRV, project inthe investors to Inaddition centre. shopping sqm a60,000 well as as tower office one and hotel one towers, residential six comprise will which centre, REDI of the construction In 2015, SRV started dwellings. owner-occupied and rental both comprises stock Residential area. inlive the already residents first the and projects, residential with started in Kalasatama work Construction opportunities for changes of use. changes for opportunities for looking are investors in late2015. low to demand, Due 73% some at only stood rate year, occupancy and past the within markedly increased space office of vacant amount the database, rental KTI’s In years. several for Pitäjänmäki in high remained has space office of vacant amount The corporations. and investors foreign funds, and companies property institutions, comprises and is varied area in the base investor The parks. business modern some well as as properties type office head some and buildings office tenant multi- both comprising 1990–2000s, in the use office mainly into converted was that area old isindustrial an centre, city Helsinki of the north kilometres seven situated Pitäjänmäki, Pitäjänmäki SATO in late2015. tenant, main is the company residential where building, office one acquired fund eQ’s located. are headquarters of company couple a where stock office modern a relatively accommodate station railway Käpylä of the surroundings The Käpylä. area residential traditional is the Pasila of eastern North store. agrocery accommodate also will building The area. in the building office head new of a construction the in 2015. start to plans Kesko Also, completed Welfare and was Health for Institute National the to rented building, office new Another construction. under is currently phase second the Park, Business Aitio NCC’s In started. be to wait still phases next two the and project, Rasti Manskun of Skanska’s phases two first the accommodates currently area supply. space The modern mostly with area office Ruskeasuo developing is the Pasila to Next Ruskeasuo 60,000 sqm shopping60,000 centre ”The construction of construction the ”The REDI is underway” REDI Europe with a gross leasable area of 115,000 square metres. metres. of 115,000 square area leasable agross with Europe in northern centres shopping largest of isthe one centre shopping Itis The living. and retail for area attractive an as development its line, supports metro eastern the by as well as route, radial eastern the Iand Road of Ring junction at the location area’s The area. Itäkeskus is the east Further centre. the above built be also will towers residential Three hypermarket. a Prisma accommodate and space, of retail sqm 20,000 some comprise will centre The centre. Megahertsi existing the with connected be will which station, metro by the centre Hertsi of the construction the start to about are Hartela and YIT area. in the small is rather of offices stock total the although years, several for high remained has rate vacancy supply. Office retail and office with area diversified amore into transformed gradually has that area old iswarehousing an Herttoniemi line. metro the and route radial eastern the both to adjacent CBD, of the east kilometres five area is an Herttoniemi –ItäkeskusHerttoniemi –Vuosaari portfolio. Antilooppi of the part as hands changed property another and in Pitäjänmäki, property office one acquired 2015, In years. NREP in recent area the with cautious have been investors demand, space weak to in 2016. Due completed be to planned area, in the phase first Garden’s Business Ultimes 11,000 an sqm is developing Invest however, Currently, Peab development. onresidential mainly concentrated years, inrecent has, area inthe construction New companies. service professional and IT example, for among, attractiveness their retained have station railway the to closer buildings modern the whereas low rents, relatively through tenants attract to forced been have investors in particular, buildings older In Pitäjänmäki. in buildings and areas different the between markedly vary levels supply, space rental heterogeneous of the Because Photo: SRV suffering from high from office suffering ”Pitäjänmäki continues continues ”Pitäjänmäki vacancy rate” vacancy property will be demolished. be will property old the hypermarket phase, first of the completion Upon of residential. sqm 8,000 and space of retail sqm 36,000 some 2017. accommodate to is planned phase second The in opened be will Citymarket anew where in Itäkeskus, centre shopping sqm a20,000 building is currently Kesko Olari, Keilaniemi and Leppävaara areas. Leppävaara and Keilaniemi Olari, Niittykumpu- Kilo-Mankkaa, instance, for including, Espoo, in areas in various found be can premises Vacant office in late2015. rented were investors large by owned premises 74% some only office of Espoo’s database, rental KTI the In developmentoffice projects. ongoing no currently are there and area, Leppävaara the in completed was building office however, new one only In2015, active. remained has development office new rates, vacancy high Despite years. few past the for in Espoo areas many for aproblem been have rates vacancy Office properties. and areas different in rates vacancy levels and of rental development divergent inthe seen be also can which is multifaceted, stock property commercial city’s The centres. regional five within scattered stock city, property has biggest second Finland’s Espoo, 5.1.2 Espoo areas. residential developing rapidly also are areas Rastila adjacent the and Vuosaari Columbus. centre shopping sqm 21,000 is the station metro Vuosaari the to Next Logicor. Blackstone’s to area in the portfolio logistics 2015, In a€100 sold million stock. Sponda property logistics extensive an well as as jobs 2,000 about accommodates currently harbour The years. in recent rapidly developing been has that area is another area, harbour new the Vuosaari, ”Office vacancy rate vacancy remains”Office high in Espoo” 65 5 Property markets in different regions – outlook for 2016 66 5 Property markets in different regions – outlook for 2016 are not expected to be started before the rental market market rental the before started be to expected not are these but station, metro the to close buildings residential and office high-rise some including area, in the planned being projects development office major several are There rate. vacancy onthe impact any have don’t thus they and efficiency, space increased by driven been have of these many but in Keilaniemi, lettings major some been has 73% of 2015. at end the at around There stood only offices Keilaniemi for rate occupancy the database, rental KTI’s In further. increased space of vacant amount in 2015, and, years, the in recent buildings office modern in vacancies high relatively from suffered has Keilaniemi levels. rental prevailing slightly below the made been have agreements new years, recent In month. per sqm per €25 to close are rents top the although in Ruoholahti, lower than slightly are levels rental Average concepts. park business modern some well as as Fortum, and Oil Kone, Neste Mobile, Microsoft including properties office head major several accommodating area office is a modern Keilaniemi areas. station new inthe is active construction residential and However, retail premises. of office oversupply serious from suffered years, have, in recent areas of these Many stations. metro new accommodate –will Matinkylä and Niittykumpu Tapiola, Otaniemi, –Keilaniemi, Espoo in southern submarkets property commercial established five The Matinkylä TapiolaKeilaniemi – Otaniemi – – 2020. by in Kivenlahti, ending stations, five another by extended be it will which in 2016, after operations start will Matinkylä to out metro The stations. new of the vicinity in the markets property the is boosting line metro western new of the construction The area Helsinki metropolitan the in industrial Occupancy rates retail of offices, and 100 70 75 80 85 90 95 %

2003 ”New metro line metro ”New retail boosts and residential construction Office 2004

2005 Retail 2006 in Espoo” 2007 Industrial

2008

2009

2010 Source: KTIRentaldatabase 2011

2012

2013

2014

2015 the attractiveness of the area and improve the opportunities opportunities the improve and area of the attractiveness the Tapiola, and increase both to Keilaniemi in order between I Road Ring the cover to decided has of Espoo City The in 2015. area in the transactions major no were There significantly. improve conditions use. In 2015, Fennica Mutual Property Fund acquired one one acquired Fund Property 2015, In Mutual use. Fennica alternative some for redeveloped and demolished be will some while redeveloped, been has of which part a large stock, office adiversified Tapiola accommodates also area demolished. be will old building whose store, department aStockmann accommodate will centre The started. be to is planned phase third of the construction the which after in 2017, completed be to scheduled and construction is under space of leasable 20,000 some comprising phase second The in 2013. completed was centre shopping Ainoa of the phase first The stock. property new and existing and infrastructure transportation in both investments major includes project The redevelopment. major undergoing is currently which area, residential and office retail, Tapiola is atraditional Technopolis’s campus. Innopoli including companies, tech at high- targeted parks wellbusiness as institutes research several accommodates also area Otaniemi in 2018. The completed be to is scheduled €100 project million The space. retail some include also will sqm of 33,000 area a gross with Architecture and Design of Arts, School Aalto the for building Anew premises. new develop and buildings existing redevelop both will and area, inthe campus main its centralise to decided has University The is located. University Aalto where area, Otaniemi is the of Keilaniemi East of years. acouple after started be to Tapiola, and scheduled it is only Otaniemi but between tunnels the extend will phase second The in Keilaniemi. start to about is just work The development. residential for main cities occupancy rates in Office 100 70 75 80 85 90 95 %

3/2007 Turku Helsinki

centre iscentre undergoing major 9/2007

”The traditional Tapiola”The 3/2008 9/2008 redevelopment” 3/2009 Oulu Espoo 9/2009 3/2010 Whole Finland Vantaa 9/2010 3/2011 9/2011 Tampere 3/2012

Source: KTIRentaldatabase 9/2012 3/2013 9/2013 3/2014 9/2014 3/2015 9/2015 attracts residential development. residential attracts also Leppävaara area. in the parks business most for planned being are phases Additional GmbH. Investment RREEF by acquired was property office million €70 The Veritas. by Valley Business of Sola sale the was area in the transaction major Another transaction. portfolio office European large of a part as Amundi to Investment Union from sold were of Alberga phases 2015, earlier two During Yield Fund. Rental in late2015 OP- to sold completed and was Park Business of Alberga phase fourth The Park. Business Derby SRV’s and Quartetto Hartela’s Polaris, joint project Lemminkäinen’s and NCC’s Alberga, NCC’s including buildings several with complexes park business by is characterised area Leppävara supply. residential modern some and mall shopping Sello, atraditional centre shopping stock, office expanding adiversified, comprising area, Leppävaara is the railroad western the by Iand Road Ring Along Leppävaara shop. outdoor and sports XXL the to in 2015, rented area is mainly which in the property retail sqm 8,200 an completed Kiinteistöt Tallberg- Julius Liila. and Merituuli centres shopping as well as properties retail big box mainly accommodates currently area The of Suomenoja. area manufacturing light and retail traditional is the West of Matinkylä underway. is development residential extensive in Matinkylä, Also centre. entire the owns currently Citycon space. lettable of sqm 100,000 almost comprise will centre shopping the in 2016 2017– phases and in two completion for scheduled – redevelopment the After station. metro Matinkylä the accommodate will and extended and redeveloped being is currently centre The in Matinkylä. is located centre shopping Omena Iso area. office arecognised well as as in Espoo, centres retail significant most ofis the one project, line metro current of the stop final the Matinkylä, project. in the investor is the Yield fund Rental in late2016. OP- completed be to scheduled and underway is currently building retail sqm of a 7,000 construction the station, Niittykumpu the In station. of the vicinity the in projects office some well as as planned, is being centre retail asmallish station, Urheilupuisto the In Niittykumpu. and Tapiola Urheilupuisto after are stations two next The underway. currently is also development Tapiola the In alot of residential area. in the area, property one of the biggest shopping shopping biggest the of one ”Leppävaara attracts retail, attracts ”Leppävaara ”Iso Omena”Iso will become office andoffice residential centres in Finland” in centres investments” due to some mistakes in formal procedures. Therefore, the the Therefore, procedures. in formal mistakes some to due However, in 2015, years. rejected was plan the several for planned been has centre retail and shopping sqm 110,000 amajor III, Road Ring and Turku of the motorway junction at the centre Espoo to next situated area, Lommila the In centre. in Espoo located are Entresse and Espoontori centres shopping The route. railway western the alongside and Turku the motorway to close of Leppävaara, west situated is buildings, retail various well as as city of the buildings administrational the accommodating area an centre, Espoo Espoo centre area. in the development residential for plans significant also are There unconfirmed. remains still this but properties, leisure and hotel office, some includes plan current The postponed. or cancelled been have these all but properties, leisure and shopping extensive accommodate to planned been has area The years. past the during planned have been developments of property kinds various in Leppävaara, area Perkkaa In the transaction. Ilmarinen-Antilooppi in the included also were in Karaportti premises Nokia of these sqm 23,000 Some area. in the rate of vacancy increase the to contributed also which in Leppävaara, used it previously space some freed thus has Nokia functions. office head its concentrated has Nokia where area, Karaportti is the Leppävaara to Next 24%to of 2015. end at the increased had rate vacancy Catella, to according and, years, past the during in Leppävaara steadily increased has space of vacant amount The levels. inrental differences significant are there stock, diversified the to due but sqm, per €20 again – postponed the development of the area markedly. area of the development the –postponed again in late2015, plan the – has which reconfirm to had city Prime rents for offices in Leppävaara stand at slightly above at slightlyabove stand in Leppävaara offices for rents Prime Photo: SRV 67 5 Property markets in different regions – outlook for 2016 68 5 Property markets in different regions – outlook for 2016 stands, however, above 17%, according to Catella. to however, 17%, above according stands, still rate vacancy slightly. Office decreased space of vacant in 2015, but amount the years, in recent rates vacancy high relatively from suffered has area up. The pick to demand space for waiting are they but phase, planning in the projects office numerous are There tenants. several attracted has property The AviapolisStation. the to next property Aviabulevardi sqm 9,000 of the construction the complete to is about CDF Skanska and phase, new sqm of a 5,300 by a completion in 2015 extended was Technopolis’s III. campus Road Ring by complexes park business several and Helsinki-Vantaa Campus Technopolis the area, Worldthe airport in the Trade Center including area, in the is abundant supply space office Modern area. in the planned being are properties logistics new Several area. airport in the building terminal cargo anew developing is currently Finnair property. office and logistics sqm 40,000 new Schenker’s of DB completion the was project biggest The area. in the completed were premises manufacturing and logistics of new sqm 45,000 in2015, and years, some inrecent area inthe active been has development Logistics Logistics. Posti and Schenker DB by, DHL, supply, instance for space is accommodated which modern rather with hub logistics important an Aviapolis is also airport, the to related directly properties supply. Besides retail abundant and properties logistics premises, office modern includes Aviapolis area in the stock property Commercial area. in the development property commercial and residential both boosts This connections. railway main and centre city the with area the linking in Aviapolis, thus well as as airport at the stations has Line Rail Ring new The is estimated. jobs 15,000 additional of some growth further and jobs, 35,000 about accommodates area The growth. significant for plans further and area inthe inhabitants 18,000 some currently are There companies. property several and developers property major all –Lentoasemakiinteistöt, LAK company daughter its and of Vantaa, Finavia City the include area inthe players main The years. few past the during rapidly developed has Helsinki-Vantaa the Airport around Aviapolis area The Aviapolis properties. service and retail several and projects residential abundant including areas, station the around development property in 2015, boosted operation has started which Line, Rail Ring new of the development The centre. Tikkurila traditional inwell the as as surroundings, its and airport the around concentrated are areas market property commercial important Vantaa,In most the 5.1.3 Vantaa up in the Aviapolis area, but ”Office demand”Office has picked vacancy ratevacancy remains high” ”New Ring Rail Line Rail Ring was ”New opened in 2015”opened is currently under major redevelopment. major under is currently area the and Line, Rail Ring the by markedly enhanced were centre Helsinki and trains long-distance airport, the between connections for hub alogistics as position Tikkurila’s buildings. administration city’s of the most accommodates also Tikkurila in Vantaa. area retail and office important most – the area airport the –alongside and centre urban main is the Tikkurila Tikkurila area. in the properties retail acquired fund pension Pharmacies’ and Life Fennia of ajointventure and Fund Mutual Fennica Also YIT. from property III Avia Line the acquiring by Aviapolis area in the investments its late2015,In increased Yield OP-Rental fund gardening. and furniture vehicles, motor for outlets as such units big-box retail and park retail by favoured areas retail important also are Tammisto areas and Pakkala the Aviapolis area, of the part southern the In centre. in the hotel 200-room of anew construction the start to is Varma planning owner centre’s The premises. leisure and of hotel, office comprised centre leisure Flamingo the also is there neighbourhood immediate the In area. in the centre retail major is the centre shopping Jumbo sqm 85,000 The in 2015. started was hotel Clarion 258-room new of the construction the area, AviapolisStation new the In The area also accommodates some older office stock. stock. office older some accommodates also area The of Myyrmanni. slightly north in Myyrmäki, located is also Isomyyri, sqm 15,000 the centre, shopping other Citycon’s is located. centre shopping Myyrmanni sqm 40,000 the station, the to next centre, Myyrmäki the In active. be to continues construction residential and inhabitants, 15,000 some accommodates currently area The Line. Rail Ring Vantaa the by inwestern centre is aregional Myyrmäki Myyrmäki in 2018. in 2016, completed and started be to is estimated project of the phase sqm 55,000 first of the construction The NCC. and Skanska between is a joint project which station, Kivistö new the to close centre shopping sqm 110,000 is an area inthe planned project individual biggest The area. in the accommodated be to planned being are jobs many as nearly and inhabitants new 30,000 Some Line. Rail Ring new the alongside motorway Hämeenlinna the and III Road Ring to close is in Kivistö, area development Vantaa’s biggest Kivistö area. in the active is also development lower. Residential significantly are rents stock, office older in the but sqm, per €20 above clearly stand rents office in late2016. Prime completion for is due phase second of the construction the and area, in 2015 completed station in the was Dixi centre retail and of office phase first The area. in the investments new out carrying or planning are investors property several and infrastructure, its of Vantaa is developing City The construction plannedconstruction to be ”Kivistö retail centre’s centre’s retail ”Kivistö started in 2016”started Finnish cities Finnish rents in major Prime office business environment in the area. in the environment business the in developing cooperation active pursuing municipalities of eight consists Tampere region The technology. healthcare and automation and machinery technology, information include Tampere in the region areas expertise Technology companies. service well as as businesses technology high attracted recently has that city Tampere old isindustrial an countries. Nordic in the city inland Tampere largest is the Population: Location: Tampere Oulu, Turku, Kuopio Jyväskylä, and Lahti centres:5.2 growth Other Tampere, €/sqm/month 10 15 20 25 30 35 5

1995 Turku Oulu Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki 1996 1997 1998

Tampere region in total: 360,000 360,000 in total: Tampere region Tampere: 225,000 countries Nordic in the city inland biggest the of Helsinki; 170 north km 1999

Total returns in Finnish cities 2015 2000 2001 2002 2003 2004 Source: RAKLI-KTIPropertyBarometer Rest ofFinland6.6% Whole Finland6.3% 2005 2006 Jyväskylä 5.0% Tampere 7.3% Helsinki 6.7% Kuopio 4.8% Vantaa 7.0%

Espoo 5.2% 2007 Turku 5.8% Lahti 8.7% Oulu 2.6% 2008 2009 2010

-6 2011 Income return, % %■Incomereturn, ■ Capitalgrowth, 2012 2013

-4 2014 2015 -2 cities yieldsPrime in major office Finnish 0 the northern side of the city centre. The tunnel is scheduled is scheduled tunnel The centre. city of the side northern the in project construction byatunnel enhanced being currently is centre city of the accessibility The area. in the network in atransportation investing of Tampere is currently City The pedestrian areas. and light transportation mainly into turned be will itself centre the centre; in the planned being are facilities parking in 2019. underground new Many start to scheduled are in late 2016; operations construction about decision final the do to is expected council City the and planned, being is also tramway Anew planned. is being hub transportation public in 2017. completed be amodern to station, railway At the 10 % 4 5 6 7 8 9

2 1995 Turku Oulu Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki ”Transportation infrastructure infrastructure ”Transportation

under major development in in development major under 1996 1997 4 1998 1999

6 2000 2001 Tampere” 2002 Source: KTIIndex 8 2003 2004 Source: RAKLI-KTIPropertyBarometer

10 2005 2006

% 2007 2008 2009 2010 2011 2012 2013 2014 2015 69 5 Property markets in different regions – outlook for 2016 70 5 Property markets in different regions – outlook for 2016 the high vacancy rate, office construction continues to be be to continues construction rate, office vacancy high the 10%. Despite around been has rate vacancy the and Nokia, of reorganisations major well as as supply new both to due increased recently has space office of vacant amount The €10-15 sqm. between per vary typically rents the stock in older whereas sqm, per €20 around levels are rental buildings, in modern locations office best Inthe Technical the University. alongside Hervanta in well as as hospital University the near in Kauppi centre the to Tulli, close and of in Hatanpää areas areas in the centre, city in the is found space office In Tampere, modern investors. estate real international and domestic both attracted has region The region. Helsinki the outside inFinland area market property active most theTampere is also region, city biggest second the As cities, autumn 2015 autumn cities, Prevailing rents in major office Finnish 10 15 20 25 30  /sqmmonth 0 5 Based on lease agreements inKTIdatabase Based onleaseagreements Lower quartile, 13.6 Lower quartile, Upper quartile, 24.8 Upper quartile, Residential rent indexes in Tampere, Turku, and Oulu, Lahti Jyväskylä index spring 2000 =100 2000 spring index Helsinki Median, 19.8

100 110 120 130 140 150 160 170 Espoo 90

Vantaa 2000

Tampere 2001 Tampere Turku OuluJyväskyläLahti Turku 2002

Oulu 2003

Jyväskylä 2004

Kuopio 2005 Source: KTI

Lahti 2006

2007 the residential projects in Tampere. in projects residential the in investors are companies property and funds Domestic infrastructure. transportation developing the by boosted partly ongoing, projects development numerous are There in Finland. regions city growing fastest of the is one which in Tampere, high is also activity development Residential in 2018. completion for is due which centre, shopping sqm 50,000 a developing is currently Sponda Koskikeskus, to next area, Ratina the In Hämeenkatu. to next centre shopping Koskikeskus in the and Hämeenkatu, street, main the along in Tampere is situated space retail expensive most The vicinity. in its property educational an building are of Finland Properties University and extended, being is currently hospital University The centre. Tampella city in the in the area property office and hospital a modern develops OP university. of the vicinity in the 11,900 an project sqm Technopolis started has active. 2008 comprising project Arena) and (Deck Areena and Kansi million €500 the for developer the as 2016, chosen SRV was in2015. early In project the from withdrew NCC developer now, original the years but several for planned been has project The station. Tampere of the railway vicinity inthe arena multi-use amajor build to plans are There

2009 being developed in the centre the Tampere railway station” Tampere railway the ”A major shopping is centre project is being planned by

2010 ”A major multi-use arena

2011 of Tampere” 2012

2013

2014

Source: KTI 2015 also invested in residential projects in Tampere. projects in residential invested also companies and funds property domestic Several region. the in invested have Yield funds eQ’s OP-Rental and Fennica, example, For funds. property domestic by made mainly in 2015 were Tampere in the region transactions The completed by 2023. be to 2016, complex whole the and insummer made be to is expected project the start to decision The facilities. sports and residential arena, of multi-use sqm 120,000 some Photo: SRV Photo: SATO ”Tampere domestic attracts investors” quite strong. Listed property company Technopolis, company property Listed strong. quite remained has market in the position whose funds, pension domestic attract to enough is large market estate real Oulu’s founded. being are functions IT companies’ large well as as start-ups both and region, the to companies is attracting subsidies public with coupled labour of skilled 16-17%. at some However, stands availability the currently rate, which unemployment the affected has city.in the This companies sector IT of the close-downs and restructurings significant from suffering been has sector IT Oulu’s jobs. of all 10% about for account currently they and years, in recent region in the decreased has jobs of industrial number The region. of the specialities as regarded are sectors technology other and services technology Information is onservices. structure economic region’s of the emphasis The country. entire of the area of the one-half –about Finland northern of all covers influence whose city technology and science is aUniversity, Oulu municipalities. of neighbouring merger the to due recently more and jobs new created which sector, high-tech in the growth rapid the to due first mid-1990s; the since markedly evolved has of Oulu City The Population: Location: Oulu market has not developed as positively as in other main cities. main in other as positively as notdeveloped has market rental residential the recently, although in Oulu properties residential in rental invested also have players domestic Some Oulu. near properties retail in two invested fund Sirius’s Fund. Property NV from property manufacturing and research sqm a68,000 acquired Sagax company In2015, however, property Swedish the transactions. small rather and players local by dominated mainly been has market transaction property Oulu the years, recent In market. office inthe player important is an inOulu, founded originally Oulu region in total: 241,000 241,000 in total: region Oulu 199,000 Oulu: of Helsinki north km 600 71 5 Property markets in different regions – outlook for 2016 72 5 Property markets in different regions – outlook for 2016 Population: Location: Turku tenants. attract to continues centre city in the city, of the whereas outskirts in the found be mainly can Vacant sector. premises IT inthe primarily close-downs major to due increased recently has rate vacancy office The the area. in property a retail developing is also Arina co-operative Local tenant. main the as XXL with underway is currently property retail sqm 4,200 anew area, the In centre. city the of south area office and is aretail Limingantulli month. per at €12-14 stand sqm per currently rents Office centre. of city east Peltola in the area office head sqm 8,000 an developing Talenom is currently firm Accounting levels. rental affects which is dispersed, areas in these stock of the quality The centre. city of the east Peltola and just University, Oulu and companies high-tech several accommodates which centre, city of the north area Linnanmaa the are area central the outside areas market office important most The in 2017. in Oulu store department its down close to intention its published has side, Stockmann negative the city. in the On retailers new attract well as as market retail centre’s the revive to expected are projects The centre. in the construction under is currently Toriportti centre shopping asmaller Also vicinity. in the project property centre medical and office aretail, completed just has Ilmarinen Citycon. from properties neighbouring two the bought also Arina centre. Valkea city in the centre shopping sqm a20,000 is building Arina co-operative Local development. facility parking underground the by triggered projects development retail significant are there centre, city the In ”Retail space supply space ”Retail increasing in Oulu” in increasing Turku region in total: 318,000 in total: Turku region 186,000 Turku: of Finland corner in south-western of Helsinki; west 160 km Value added by employee (€) parenthesis in employee by Value added Value addedby sector and region 2013, % Jyväskylä region (61,488€) Jyväskylä region Tampere (70,279€) region Helsinki region (79,698€) Helsinki region Whole Finland(67,660€) Kuopio region (66,476€) Kuopio region Turku (69,494€) region Lahti region (60,534€) Lahti region Oulu region (72,692€) Oulu region 80 40 60 20 100 0 % Agriculture, forestry and fishery andfishery forestry ■ Agriculture, Private services ■Publicservices trade■Privateservices ■ Wholesaleandretail The Turku region consists of eleven municipalities in the in the municipalities of eleven consists Turku region The around the sea cluster, and biotechnology. Metal industries industries Metal biotechnology. and cluster, sea the around businesses include areas competence current region’s The in Finland. university Swedish-language main the example, for city, accommodating, university traditional Turku is astrong of Finland. corner south-western tenant in the property. In the vicinity, the construction of a vicinity, construction the In the property. in the tenant of Turku main is the City in 2016. The in Kupittaa arena sports indoor of an construction the start to planning is also Turku Properties Technology tenants. new several attracted have premises the and area, inthe building ElectroCity sqm 8,000 the redeveloping is currently company The centre. city inthe and area Kupittaa inthe of space sqm 130,000 around owns currently Properties Technology Turku there. holdings significant have also companies property and institutions domestic but area, Kupittaa inthe owner major is the Turku Properties Technology the area. in active been recently also has development Residential space. manufacturing high-quality and of office consists and companies, service business-to-business and biotechnology at high-tech, targeted is mainly area This Turkuin the area. market office active most is the station, railway the to next and area University the near located area, Kupittaa The funds. domestic to well as as players local to properties sold in Turkuhave and holdings their decreased have however, institutions some years, recent inIn Turku. investments have typically institutions Domestic players. local and domestic by dominated been years, in recent has, market investment Turku property The centres. growth Finnish other in most than is higher in Turku region services of private proportion The years. several for employment securing thus orders, major in several resulted has that Werft Meyer German the by acquisition recent the by supported strongly, developing is currently industry shipbuilding The of view. point development economic region’s the from importance of great been traditionally has which business, shipbuilding extensive an by supported are region in the Construction ■ ManufacturingConstruction Source: StatisticsFinland centre properties from Varma in two separate transactions transactions separate in two Varma from properties centre medical two acquired fund Titanium’s properties. residential and care by in Turku in 2015 dominated Transactions were sector. shipbuilding of the situation good the by supported is currently premises manufacturing and logistics for Demand to Catella. according 9%, at slightlyabove currently in Turku stands rate vacancy office The month. €15-20 per sqm about per higher, somewhat are they area, Kupittaa inthe and sqm, per €13-17 at about stand centre city in the space office for Rents stores. furniture as such premises, large using tenants instance, for among, recently attractiveness its increased also has which centre, city inthe found be can space retail centres, shopping these to Inaddition area. Skanssi inthe store XXL sqm a4,500 and inRaisio extension centre shopping Mylly sqm 21,000 of the completion by the in 2015 increased was Turku in the area supply space Retail completed. was project office of Logomo’s phase In2015, second the businesses. production programme and music games, well as as media advertising, in design, firms instance, –for companies at creative targeted centre office and centre conference arena, event is an which Centre, Logomo in the well as as areas, Port and in Pitkämäki found be can supply office modern Kupittaa, to addition In of Turku. west in Kaarina, project store grocery sqm 3,000 one to is limited construction property commercial new Otherwise, projects. construction land and road by started be to about is just building hospital University new Photo: SATO / Tuomas Uusheimo continues to develop rapidly” develop to continues ”The Kupittaain area Turku”The close to 10%, according to Catella. There are no office office no are There Catella. to 10%, to according close increased has rate vacancy the and conditions, economic challenging to due decreased has demand Space use. office into redeveloped been have properties old industrial where Tourula, and area Mattilanniemi/Ylästönniemi the include supply modern with areas office Other area. Lutakko the in concentrated been recently has development Office developed. been recently has stock new no but region, the in area market office important most is the centre city The 19%. at some markedly, is currently and increased has unemployment years, Inrecent in services. currently are jobs Two-thirds region’s of the industries. healthcare well as as ICT and materials construction and wood cover areas industry region’s Jyväskylä The technology. new and industries traditional both emphasises structure economic Jyväskylä’s roads. main national important several of atjunction the located town is auniversity Jyväskylä Population: Location: Jyväskylä in Turku in 2015. investments their increased SATO LocalTapiola and instance for market, residential the In fund. Auratum’s from property centre medical another €13 to €11amounting and acquired fund eQ’s million. residential properties and residential development schemes. schemes. development residential and properties residential comprised transactions the Otherwise, bank. co-operative local the from property office an bought Properties Jykes municipalities’ local The property. retail asmallish acquired fund Fennica’s and Niam, by managed fund, Tower Properties Nordic from property office an bought fund development 2015, In Quorum’s transactions. small mainly and players by local dominated are in Jyväskylä markets Investment found. still are rents retail highest the is that where and strong, remains district shopping pedestrian centre’s city the of position The low in Jyväskylä. very remains space retail of vacant amount The in Muurame. built being is currently in 2017. completed be to centre shopping smallish Another is scheduled which project, million €70 in this invested has LocalTapiola’s fund and Skanska, by is developed project The area. in the started be to about is just Seppä centre shopping sqm 24,000 of anew construction in late 2016. The completion for due area, Seppälä in the hypermarket Prisma sqm a22,000 constructing is currently co-operative local The centre. retail significant is another centre of city north area Seppälä The investors. national some well as as retailers local include players major The centre. regional important is an centre city Jyväskylä’s market, property retail the In in Turku. than slightlylower levels are rental properties, prime In tenants. attracting continued have in particular, offices, Modern moment. at the underway projects construction increasing in the Seppälä area ”Retail property stock stock property ”Retail Jyväskylä region in total: 179,000 in total: region Jyväskylä 137,000 Jyväskylä: of Finland centre in the of Helsinki, north 270 km in Jyväskylä” 73 5 Property markets in different regions – outlook for 2016 74 5 Property markets in different regions – outlook for 2016 underway. currently are projects development property distribution and logistics two centre, city of the west area, Neulamäki the In space. retail of vacant amount in the increase an as resulted has However, supply new properties. retail of some refurbishment the and facility parking underground of an completion the by supported been has attractiveness centre’s city city. the The outside 10 km some Center Shopping Matkus constructed newly the with competing is centre city Kuopio in the market space retail The positive. very is not demand for outlook the and high, is relatively space of vacant amount The areas. hospital and University the to close locations inTechnopolis well two as as Kuopio’s centre city in the is concentrated stock office Kuopio The region. in the recorded transactions major no were 2015 In there investors. local and national of both consisting players domestic by is dominated market property Kuopio in the base investor property The sectors. industry bio, environmental and and health food, emphasises city the strategy, its In cities. major inother than is greater sector public in the of occupations proportion The inindustries. 8% are some region, inthe jobs the Of area. the in employer biggest is the sector service the moment, at the cities Finnish major in most As wood. to related mostly are areas industry Traditional Finland. ineastern Savo, is situated of province of the capital the and city auniversity Kuopio, Population: Location: Kuopio Kuopio region in total: 132,000 in total: region Kuopio 112,000 Kuopio: of Helsinki north-east km 400 and due for completion in early 2016. in early completion for due and developed being currently is also terminal transport public city’s The areas. pedestrian increasing wellfacility, as as parking underground anew by, constructing instance, for attractiveness centre’s the is increasing city The underway. currently is also project multi-use Malski The completed. were projects redevelopment / retail in 2015, office two and onredevelopment, concentrated recently has centre city in the development Property uses. other into buildings old industrial transferred have that efforts of redevelopment a result as increased has centre city of the attractiveness The 19% at of 2015. some end at the standing cities, big the among rates unemployment highest the from suffering is currently However, 30%. Lahti to decreased has share industry’s while region, in the jobs of the 60% around represent currently occupations trade and Services region. in the operators logistics attracted has location favourable region’s The base. educational astrong is also there where design, and tech in clean competence emphasises region The services. professional to transferred been have jobs more Recently, industries. plastics and furniture woodworking, metal, to is that home city industrial is atraditional Lahti Population: Location: Lahti highest among the main cities. cities. main the among highest of the is one space retail of vacant amount The Catella. 11%, some to to increased has according vacancy Office in 2015. region Lahti in the transaction office one only was there Otherwise, investors. domestic of three venture ajoint to sold was in2015. property completed The a 7,700 was BW Tower, sqm of Lahti, City the to rented vicinity, the In companies. service business for premises office instance, for redeveloped, it has where properties, of old industrial developer and is owner amajor Oy Renor station, railway the near area, Askonalue old industrial the In sqm. of 34,000 area a leasable with is centre a shopping there area, Karisto In the street. main in the and centre shopping Trio the around concentrates centre city in the supply Retail retail properties remainretail properties high ”Vacancy rates of and office Lahti region in total: 200,000 in total: region Lahti 104,000 Lahti: of Helsinki north-east km 104 in Lahti” in Key terminology

Property Kiinteistö Building Rakennus Rent Vuokra Rental agreement Vuokrasopimus Tenant Vuokralainen Landlord Vuokranantaja Tax Vero Investment Sijoitus Return Tuotto Yield Tuottovaatimus Operating/maintenance cost Ylläpitokustannus/ hoitokustannus Transaction Kauppa Limited company Osakeyhtiö Housing company Asunto-osakeyhtiö Real estate company Kiinteistöosakeyhtiö, kiinteistöyhtiö Mutual real estate company Keskinäinen kiinteistöyhtiö Real estate investment company Kiinteistösijoitusyhtiö Pension insurance company/ Eläkevakuutusyhtiö/ pension fund eläkerahasto Property fund Kiinteistörahasto Office (space) Toimisto(tila) Retail (space) Liiketila, myymälä(tila) Shopping centre Kauppakeskus Industrial Teollisuus Manufacturing Tuotanto Warehouse Varasto Logistics Logistiikka Hotel Hotelli Residential Asunto Site Tontti

75 The sponsors of this publication

LocalTapiola Real Estate Asset Management Ltd provides real estate portfolio and asset management services to separate account investors, and customises portfolios to meet the best allocation in the direct Finnish real estate Helsinki is the commercial, political and cultural capital sector for each separate account. of Finland and a dynamic hub for international business, We provide well-structured real estate funds to with Finnish infrastructure that excels in terms of physical institutional or large real estate investors. The funds are transportation as well as telecommunications. developed by us and the fund and the assets are in our Helsinki is also a wonderful region for working, playing, professional hands. Our funds give investors a defined risk studying and living. It is clean, stable and secure, with a very and return exposure in the Finnish real estate market in high standard of living and welfare. More than a third of range of the specific fund strategy and sector allocation. Helsinki inhabitants have higher-level education. According Our funds invest in direct properties in Finland, and their to estimates, there will be 860,000 people living in the city investments are leveraged in order to optimize the return. and 1,882,000 in the region by 2050. New residential and Each fund and account has its own in-house team focusing working areas currently under construction make Helsinki on active portfolio and asset management. one of the fastest growing metropolises in Europe. For our tenants we provide service concepts such as As a prime location for innovative companies, Helsinki Carefree Space and Easy Going Home, including business welcomes organisations of all sizes. The City of Helsinki premises and rental homes with all accessory services. offers consultation regarding the business conditions of the The market value of the assets under our management city to investors and companies that are looking for a new is over three billion euros. We have extensive knowledge location. The City also provides support for developers and insight of the Finnish real estate business, including and investors looking for real estate projects. www.hel.fi investment strategies, transactions, management and letting. or http://en.uuttahelsinkia.fi We are part of the finance house LocalTapiola Group, and we benefit from the group’s vast and versatile financial knowledge. www.lahitapiola.fi/kiinteistovarainhoito

KIINKO Real Estate Education is Finland’s leading training company offering a wide range of higher professional education and training services for middle management Newsec offers a wide range of integrated professional and executive-level leaders operating in the real estate and advisory services comprising investment transaction construction industries. advisory and leasing brokerage, valuation and analysis, real The company’s unique concept brings together all estate consultancy and corporate finance services as well players in the industry – end-users, developers, service as asset and property management, corporate real estate providers, investors and financiers. This gives KIINKO management and corporate solutions. Founded in 1989, Real Estate Education excellent insight into the needs of its Newsec Finland is part of the Newsec Group headquartered customers and their businesses. in Stockholm, Sweden. Newsec has over 200 employees in The Annual Convention of Property Investment Finland, with offices in Helsinki, Tampere, Turku, Jyväskylä, Prospects is one of the main events of KIINKO Real Hämeenlinna, Kuopio and Oulu. Its clients are among the Estate Education. With over 500 participants it is the most leading Finnish and international real estate investors and important real estate convention in Finland, combining corporations. In a survey carried out in 2016 by the Great seminars and extensive networking. www.kiinko.fi Place to Work Institute® Finland, Newsec Finland was nominated for the ninth time among the top workplaces in Finland and as the best workplace within the real estate industry. Newsec – The Full Service Property House in Northern Kuhanen, Asikainen & Kanerva Attorneys Ltd is a law firm Europe – is by far the largest specialised commercial property specialising in legal problems and challenges in the real firm in the region. Newsec offers a comprehensive range of estate business. The firm was founded in 1999 and since services within Capital Markets, Leasing, Asset & Property then it has maintained steady growth. Kuhanen, Asikainen Management, Valuation & Advisory and Corporate Solutions & Kanerva has been ranked in the top five most successful to property owners, investors and occupiers. Newsec was law firms in terms of turnover in Finland and is the biggest founded in 1994 and is owned by its partners. Today, the law firm specialising primarily in real estate legislation. Group employs over 600 professionals in over 20 offices. Our traditional clients are housing companies and private Every year Newsec carries out hundreds of successful persons but we also offer our services to professional real assignments and manages nearly 2,000 properties with over estate players. 12 million sqm. Through this great volume, and with the Servicing clients across Finland, Kuhanen, Asikainen & breadth and depth of its various operations, Newsec has Kanerva has the strength in depth to meet its clients’ needs. superior knowledge of the real estate market. www.newsec. With twelve experienced lawyers specialised in real estate com, www.newsec.fi laws and three of the lawyers specialised in labour laws, it has the knowledge and expertise to offer Finnish legal service 76 to clients throughout Finland. We have operated in the housing market for 75 years, and we have acquired know-how concerning the changing customer needs and market dynamics along the way. Some The Ovenia Group is Finland’s leading provider of asset, 170 SATO employees are working daily with our partnership property and facility management services. The group network for better housing. We are passionate about what consists of mother company Ovenia Group Ltd, facility we do and are proud of SATO. management company Ovenia Ltd, property management SATO Group’s net sales in 2015 were €323.4 million, company Ovenia Isännöinti Ltd as well as real estate with an operating profit of €196.5 million and a €159.4 consultancy Realprojekti Ltd, which specialises in shopping million profit before taxes. SATO’s investment properties centres and development projects. have a value of roughly €2.8 billion. www.sato.fi Ovenia provides a wide ranging customer-driven real estate service portfolio for maintaining and developing the value of real estate assets. Ovenia has four key strategic business units: commercial real estate management, business premises management, residential property management SEB is a leading Nordic financial services group. As a and housing services. Ovenia’s main services are leasing relationship bank, SEB in Sweden and the Baltic countries (commercial and office premises), property development, offers financial advice and a wide range of other services. shopping centre management, construction and maintenance In Finland, Norway, Denmark and Germany the bank’s management services (technical services), housing, real operations have a strong focus on corporate and investment estate financial administration and business premises facility banking based on a full-service offering to corporate and management (incl. business parks). institutional clients. The international nature of SEB’s With over 30 years of experience in business and business is reflected in its presence in some 20 countries commercial premises and over 70 years of experience in worldwide. SEB has 4,000,000 private customers, 400,000 residential real estate management, Ovenia is the largest and SME customers and 3,000 large corporations and institutions oldest company in its field in Finland. In recognition of its as customers. The Group has about 15,500 employees. work, Ovenia was the first company in Finland to receive ISO SEB has been present in Finland since 1984, and today 9001 certification for property management. The company’s has 350 employees based in central Helsinki. comprehensive service offering covers all sub-areas of real Real Estate Finance, which is a part of Large Corporates estate asset management. The Ovenia Group administers & Financial Institutions division, is responsible for real estate a property portfolio amounting to over 10 million square clients and offers financing, including structured finance meters across Finland and the Group’s turnover for 2015 and other SEB products to real estate clients in Sweden, was approximately €48 million. The company employs 600 Finland, Norway, Denmark and Germany. www.sebgroup. property professionals in 23 locations. www.ovenia.fi, www. com or www.seb.fi realprojekti.fi

Sirius Capital Partners is a real estate investment manager The Finnish Association of Building Owners and focusing on opportunistic and value-add real estate Construction Clients is an interest group and trade investments in Finland. We make co-investments on a deal- association representing the most prominent real estate, by-deal basis, as well as funds or club deals based on an residential building and infrastructure owners, investors investment theme. Our investors range from global and and management service providers in Finland. The members local institutions and multi managers to real estate funds. represent both the private and the public sector, and member An exceptional track record in the Finnish real estate organisations number around 200 in total. The association investment market, coupled with experience in working brings together real estate and construction professionals. together with leading global investors, makes Sirius a RAKLI’s activities are divided into three branches and unique investment manager. Sirius’ partners have extensive three committees. The branches are Residential Properties, experience in retail estate investments and in principal Commercial and Public Properties, and Urban Development positions in leading industry firms over the past 10-15 years. and Infrastructure. The committees coordinate investment The firm advises Sirius Fund I Grocery, a fully invested and finance, property management and procurement. For fund with €100 million in equity. www.sirius.fi more information, visit: www.rakli.fi.

Skanska is one of the world’s leading project development SATO is one of Finland’s leading rental housing providers. and construction groups with expertise in construction, SATO’s aim is to offer comprehensive alternatives in rental development of commercial and residential premises, and housing and an excellent customer experience. SATO holds public-private partnership projects. Based on its global green roughly 23,600 rental homes in Finland’s largest growth experience, Skanska aims to be the client’s first choice for centres and in St Petersburg. green solutions. The group currently has about 48,500 In our operations, we promote sustainable development employees in selected home markets in Europe and the US. and work in open interaction with our stakeholders to create Skanska’s sales in 2015 totaled €16.5 billion. added value. We operate profitably and with a long-term Skanska’s operations in Finland cover construction view. We increase the value of our housing property through services, residential and commercial project development investments, divestments and repair work. and public-private partnerships. Construction services 77 include building construction, building services, and civil and environmental construction. The combined sales for Skanska Oy’s operations in 2015 were approximately €821 million and the company employed 2,095 people at the end of the year. Skanska CDF Oy is part of Skanska Commercial Development Nordic, which initiates and develops office properties. The company’s operations are concentrated in the three metropolitan regions in Sweden, the Copenhagen region in Denmark, the Oslo region in Norway, as well as Helsinki in Finland. www.skanska.fi

SRV is a leader in the development, commercialisation and building of innovative construction projects. We seek long-term profitable growth in business premises and housing construction in Finland’s developing urban centres, close to good transport links, particularly rail traffic routes. Our business focus is in Finland. Additionally, we implement profitable shopping centre projects in Moscow and St. Petersburg, Russia. We offer refined concepts and insightful new solutions to meet the needs of our customers. Our operating model is based on innovative project development and effective project management. The SRV Approach ensures transparent collaboration between all parties and a high- quality end result. SRV Group Plc was founded in 1987. It presently has about 1,000 employees and a revenue of approximately €700 million. It operates in selected growth centres in Finland, Russia and Estonia. The company’s share is quoted on the NASDAQ OMX Helsinki. SRV introduced to Finland a project management model that has become one of the most adopted approaches to construction projects in Finland. The operating model enables SRV to create the best project-specific organisation to ensure efficient and high-quality implementation of the projects. This approach gives SRV’s cost structure more resilience to economic fluctuations. We apply the SRV Approach in business premises projects, apartment block projects for everyday living, attractive shopping centres and comprehensive area development projects, including earth and rock construction, as well as special projects, such as hospitals and public works. www.srv.fi/en

78 Publisher

KTI Finland Eerikinkatu 28, 7th floor 00180 Helsinki | FINLAND Tel. +358 20 7430 130 www.kti.fi

ISBN 978-952-9833-49-8

Photos: Sponsor companies’ archives 2016 The Finnish Property | Market

THE FINNISH PROPERTY MARKET 2016 KTI Finland in co-operation with: City Helsinki; of KIINKO Real Estate Education; Kuhanen, Asikainen and Kanerva Attorneys; Newsec; LocalTapiola; Ovenia Group; RAKLI; SEB Group; Sirius Capital SATO; Partners; Skanska and SRV.