2 2 Institutional aspects of the Finnish property market The Finnish Property Market | Property The Finnish 2018

The Finnish Property Market | 2018

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 17

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 26

3 The Finnish property investment market: volumes, structure and players 28 3.1 Investment market in 2017 28 3.2 Ownership structure 29 3.3 Real estate service sector 40

4 Property sectors: market structure, practises and investment performance 44 4.1 The office market 44 4.2 The retail market 49 4.3 Rental residential sector 54 4.4 Public use properties 59 4.5 Industrial / logistics market 61 4.6 Hotels 63

5 Property markets in different regions – outlook for 2018 64 5.1 The Helsinki metropolitan area 64 5.1.1 Helsinki 66 5.1.2 Espoo 71 5.1.3 Vantaa 74 5.2 Other growth centres: Tampere, Oulu, Turku, Jyväskylä, Lahti and Kuopio 76

The sponsors of this publication 83

6

Preface

The Finnish Property Market 2018 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 11 companies and organisations representing the Finnish property investment, development, management, finance and advisory sectors. KTI wishes to thank our sponsors: The City of Helsinki, Colliers International Finland, KIINKO Real Estate Education, LocalTapiola, Newsec, RAKLI, SATO, SEB Group, Sirius Capital Partners, Skanska and YIT.

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 call +358 20 7430 130 or visit www.kti.fi.

8 9 1 The Finnish economy Basic about Finland facts Parliament Niinistö Sauli Republic, of President State of Head governance and History Currency tries indus exporting important Most capita per GDP ECONOMY cities important Other Capital city Religions Languages Population PEOPLE Distances area Total GEOGRAPHY - Group (19), The Finns Party (17). Party (19), Finns Group The Parliamentary Reform (35), Blue Party Democratic Social (38), The Party Coalition National (49 The seats), Party Center The parties: Biggest parliamentCurrent in elected 2015. 4years. for elected members, 200 chamber, One 2018) in re-elected 2012, (since 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 products industry paper and Forest Chemical products industry €39,236 (2016) Kuopio, 118,000 Lahti, 119,000 139,000 Jyväskylä, Turku, 189,000 201,000 Oulu, Vantaa, 222,000 Tampere, 230,000 277,000 Espoo, biggest the being Vantaa and –Espoo municipalities neighbouring 13 and Helsinki comprising 1.5Helsinki region, million inhabitants inhabitants 642,000 Helsinki, Orthodox 1.1% 71.0%Lutheran 6.4% by spoken languages Foreign 5.3% by spoken Swedish, 88.3% by spoken Finnish, languages: Two official 2 per square kilometre Lappi region (northern Finland): 170 per square kilometre Finland): (southern region Uusimaa Helsinki 2,984 per square kilometre kilometre square per inhabitants 18 Density: 5.51 million west to east km 540 south to north 1,160 km 338,000 square kilometres 1 The Finnish economy1 TheFinnish production. The biggest categories within metal metal within categories biggest The production. industrial total of the 40% some for accounted which industries, metal was sector industrial 2016,In biggest the cent. per 20 some to fallen GDP, Finnish of the cent had 2016, by per and, share 30 its for accounted production industrial In2000, increased. has of that services while decreased, has production industrial of share years, past the However, during decades. past the during economy Finnish of the development on the impact agreat had has production of industrial Growth services. hospitality well as as transportation, trade, support, and administration communication, and information being sectors important most the services, of all cent 75 per some up make services GDP. Private Finnish of the thirds two some for economy, account and Finnish of the sector biggest the currently are Services 2000’s early and late 1990’s the during economies competitive most world’s of the one into country the transformed reforms structural and innovation growth, strong where economy, stable and well-functioning open, is an Finland 1.1 structure The of the economy is IT services, which accounted for some 11 some for of the cent per accounted which services, is IT in services sector biggest in 2016. The exports of Finnish added value domestic combined of the cent per 36 some for accounted services Research, of Economic Institute VATT and of Helsinki University ETLA, University, Aalto by conducted study arecent to According goods. intermediate on imported based is partly added value where industries manufacturing in traditional than higher markedly is typically added value of domestic share the that fact the by is highlighted of services significance The years. in recent steadil increased has exports of total of services share The exports. Finnish for demand the to regard with is crucial economy in global growth the therefore, and, goods, investment are exports (12%). industries of Finnish share Alarge electrotechnical (14%), (13%),products equipment and machinery well as as (17%), paper and metal and forestry metal include industries exporting important Other of goods. exports total of the 19 cent some for per accounted industries 2016, chemical In years. in recent increased has exports of Finnish diversity goods). The intermediate of imported value the by deducted value (gross added value domestic of the cent per 22 some GDP, of the cent 35 per some for and accounted 2016, exports In development. economic onthe impact aprofound have in exports economy, changes and driven export is an Finland production. industrial of total 20% approximately for accounted both industries forestry and Chemical industries. technology information and industry metals industry, electrotechnical and electronics engineering, mechanical include industries “The share of services of share the of services “The Finnish GDP is increasing” is GDP Finnish y . Finnish foreign by trade target area deliveries. equipment and machinery Finnish to related services maintenance and installation well as as services, marketing or engineering like research, services business to business include industries (13%). service exporting industries significant Other forestry after sectors business exporting all among share biggest second is the This of exports. added value domestic total 10 12 14 16 % 0 2 4 6 8

1995

1996 for countries target Finnish “The economic outlook“The is wdn usa emn Germany TheNetherlands Russia USA Sweden

1997 positive in all important 1998 Finnish economic structure 1999 2000 2001

2002 exports” 2003

2004 production Primary 2005 2006 2007 2008

2009 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 2015 2016

Source: FinnishCustoms 2010 2011 02 04 06 08 0100 90 80 70 60 50 40 30 20 10 0 2012 Manufacturing 2013 2014 2015 2016 1-11/2017

Construction Construction of the year, exports of services increased by 8 per cent. cent. 8per by increased of services year,of the exports quarters first in 2016. Within three the period corresponding Finnish sector by industry exports (14%), Germany include (10%), exports of Finnish Sweden countries target important most The countries. European other to go exports of Finnish thirds two than More of total exports of goods was 16 per cent higher than in the in the than higher 16 cent was per of goods exports of total volume the November, and January Between significantly. increased 2017,In exports Finnish of the volume total the 10 15 20 25 30 35 % 5

2000 Public services Electric and electronics industry products industry Electric andelectronics Machinery and transport industry products industry andtransport Machinery products Metal industry 2001 Other products products Chemical industry products industry Forest 2002 “The volume“The of Finnish

2003 2017” in significantly 2004 increased exports 2005 Private services 2006

2007 Source: StatisticsFinland 2008 2009 % 2010 2011

Source: FinnishCustoms 2012 2013 2014 2015 2016 1-11/2017 10 1 The Finnish economy 11 1 The Finnish economy as well as an increase in productivity. In 2016, In Finnish the in productivity. increase an well as as countries, competitive key the to compared development cost labour moderate more by strengthened been has however, competitiveness years, economy.the Inrecent in changes structural unfavourable and costs production in increase the to due years many for weak remained industries exporting Finnish of the competitiveness The in 2018. continue to expected are which increases, significant showing all investments and consumption private exports, with well balanced and based is broadly economy of the growth current The 2018. in early oflevel 2008 peak previous the exceed and reach to expected is finally of production volume absolute The cent. 3per over to up ending and expectations exceeding even figure final the and year, the throughout increased being forecasts growth GDP path, with growth 2017, ahealthy to turned economy the However, in crisis. financial global the following decade awhole almost for sluggish remained growth GDP Finnish 1.2 Outlook for the Finnish economy pulp. for demand increased an to thanks increased, China to exports Also of cars. in exports growth the to due mainly in 2017, significantly increased (6%). Germany to Exports (7%), (7%), Netherlands the USA the (6%) China Russia and

Photo: Skanska / © 2017, Kuvatoimisto Kuvio Oy “The competitiveness“The of the Finnish exporting industries industries exporting Finnish strengthened in 2017” strengthened Private consumption increased by some 2 per cent in 2017. cent 2per some by increased consumption Private cent. per 4-5 some by increase to is expected exports 2018, In of development. volume the positive showing all materials raw and products pulp and paper products, metal cars, with based broadly be to continue will Exports demand. in global increase the with in line more be to is expected exports Finnish of the growth the and mitigated, being are advantages these However, forward, going countries. other in most than stronger been thus has growth the and year, past the within share market gained have industries exporting Finnish the competitiveness, increased to Due industries. exporting important in most period year two- the for cent per 3.2 of some increases 2019 total with 2018 to and extended been have increases wage Moderate expenditures. public further any cutting from refraining and tax income some cutting to committed government the return, In employees. to contributions employer some of 2017 for transfer the and increases wage year,per zero by 24 hours hours of working lengthening the included Pact of the contents key The industries. exporting Finnish of the competitiveness the support is to of which objective main the Pact, Competitiveness called so the initiated government private consumption for 2018 vary between 2 and 3 per cent. 3per 2and between 2018 for vary consumption private in increase the for forecasts The consumption. private is supporting rate alow inflation ever. level Also highest at its was confidence 2018, consumer the in January update rapidly, latest inthe and strengthening been has confidence Consumer earnings. increasing and employment improving by boosted be to is expected In 2018, consumption the “Finnish economy by grew more than 3% in 2017” as by strong investment demand. demand. investment strong by as well as rates low interest both by supported are Investments cent. 5per around varying forecasts in 2018, growth with also continue to is expected ininvestments growth The cen 10 than per by more increasing volume investment total with sectors, inother also investments enhanced 2017, outlook in2016. During economic positive the started which development, economic promising the for drivers main of the one was investments in construction Growth “Economic growth is broadly“Economic growth based with consumption, exports andexports investments all showing positive GDP in 2010GDP prices growth and GDP

GDP in 2010 prices development” GDP growth in Finland growth and inGDP the Euro area 100,000 120,000 140,000 160,000 180,000 200,000 220,000 240,000 EUR million 60,000 80,000 -10 -8 -6 -4 -2 % 0 2 4 6 8

1990 1985 1991 1986 1992

1987 (19countries) area Euro Finland 1993 1988 1989 1994 D n21 rcsGDPgrowth GDP in2010prices 1990 1995 1991 1996 1992 1997 1993 1998 1994 1999 1995 1996 2000 1997 2001 1998 2002 1999 t. 2003 2000 2004 2001 2002 2005

2003 Source: Eurostat,OECD,IMF, MinistryofFinance 2006 in consumption, exports and investments. investments. and exports in consumption, increase slowing but onacontinuous based be will growth 3%. The 2and between varying figures growth GDP annual with is forecasted, 2018For 2019, and growth astable between the supply and demand for workforce makes a rapid arapid makes workforce for demand and supply the between in 2019. However, mismatch the 8% in2018 further even and some to decrease to is expected Unemployment labour. for demand the increase also will conditions economic improving future, inthe but inproduction, growth the enabled have productivity improving and capacity unused far, So 8.5%. some to up ending rate unemployment in2017, decrease to the with continued Unemployment

Source: StatisticsFinland, BankofFinland,Nordea 2004 2007 2005 2008 2006 2009 2007 2010 2008 2009 sustainability the for critical 2011 *Preliminary **Forecast *Preliminary 2010 employment “Improving 2012 *Preliminary **Forecast *Preliminary

2011 growth” economic of 2013 2012 2014 2013 2015* 2014 2015* 2016* 2016* 2017** 2017** 2018** 2018** 2019** 2019**

-10 -8 -6 -4 -2 0 2 4 6 8 % GDP growth GDP 12 1 The Finnish economy 13 1 The Finnish economy Key figures –Finnish economy in services. increases price to due mainly 1-1.5 some to cent accelerate to per is expected inflation the 2018, In cent. per 0.7 some by increased prices consumer In 2 years. low in recent very remained has Inflation 7%. as high as be to is assessed unemployment structural called of so amount The workforce. educated less the among and areas in rural is highest unemployment whereas cities, largest in the people at skilled is targeted labour for unlikely. Demand inunemployment decrease *Estimate **Forecast Change in exports, % exports, in Change Inflation, % Inflation, GDP (change in vol), % in (change GDP Private consumption, % Unemployment rate,Unemployment % Unemployment rate in Finland and in the Euro area indicator confidence Consumer 10 11 12 13 14 15 16 -40 -30 -20 -10 10 20 30 40 % 6 7 8 9 0

1996 2000

2010 1997 1.2 6.2 8.4 . 2.6 3.0 3.1 2001 1998 (19countries) area Euro Finland Finland Euro area (19countries) area Euro Finland 2002 1999 2000 2003 0121 2013 2012 2011 2.9 3.4 2.0 . 7.7 7.8 2001 2004 2002 2005

2003 2006 -1.4 1.2 2.8 . 050.6 -0.5 0.3 2004

2007 017, 2005

2008 , 2006 08-0.6 -0.8 8.2 1.5 1.1 2009 2007 2010 these three areas, the central government has shown the most most the shown has government central the areas, three these Of funds. security social and government, local government, central of the consists inFinland government General in GDP. growth the to thanks decrease to expected is share relative its though even increase to continues debt government of general amount absolute the that means This decade. of this end the until negative remain is likely to and 2009 since in deficit been has budget government The challenges. face to continue finances economy, public Finnish the for outlook and development positive more the Despite 2008 1.3 Finnish public finances Source: Eurostat,BankofFinlandandStatistics 2009 2011 2014 -2.7 1.0 8.7 2010 2012

2011 2013 Source: EuropeanCommission 2012

2015 2014 0.9* .*2.1* 0.1* 020.4 -0.2 . . 1.9 1.9 1.9 9.4

Source: Statistics Finland, Ministry of Finance, Nordea Finance, of Ministry Finland, Statistics Source: 2013 2015 2014 2016 2015 2016 2.3*

8.8 2017 2016 2017 2018 3.2** 8.4** 2017 8.5 0.7 08*2019** 2018** 4.8 8.0 . 2.8 2.9 3.0 1.0 1.2 2.5 4.7 7.5 service levels rather than increase taxes. taxes. increase than levels rather service reducing or productivity increasing by expenses public cut is to government current of the objective The expenses. healthcare and payments pension increases population the of ageing the as increased be will spending Public reforms. structural some requires economy public the Strengthening in 2020’s. again weakening start potentially conditions economic the when high very be not will economy of the resilience the increase, to continues 2019. of debt amount However, nominal the as in below 60% fall to and years coming in the decreasing continue to of 2017.at end the is expected ratio debt The in 2016 2017, and decreased 62.5% some to up ended and economy, of the has development ratio the positive the to in 2015, 63%. at GDP some Thanks of the ending of 60% threshold the exceeded debt of government amount The revenues. tax increasing and growth economic the by supported 0.7%, some to further decrease to is expected In2018, Pact. deficit the Competitiveness in the included costs public increasing 2017 some despite 1.1% to decreased in deficit government general Finland’s income. investment and workforce Finnish of the payments pension both from revenue consistent 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 enhancing economic growth” growth” economic enhancing expected to fall below 60% deficit is decreasing to due “General government“General debt “General government “General Volume index 1990=100, seasonally adjusted demand of components Main 100 200 300 400 500 0 in 2019”

1990 1991 1992 1993

1994 TotalExports demandConsumptionInvestment 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 funding are the cornerstones of the Finnish social welfare 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 healthcare, and education free instance, for including, services, of public supply comprehensive on a based is largely society welfare Finnish The in ensuring the sustainability of Finnish public finances. public of Finnish sustainability the in ensuring essentia are responsibilities municipalities’ in the reforms structural Therefore, services. in healthcare burden cost the increases which population, ageing an and balance migration anegative to due challenges economic biggest the facing currently typically are municipalities smallest The position. financial and structure economic size, their to regard with significantly other each from differ Municipalities 311 inFinland. currently municipalities are There services. social and healthcare education, of, instance, for majority the for responsible are Municipalities municipalities. level, in local at the out is carried welfare of social provision actual of the most and implementation, their monitors and welfare of social principles basic and framework the sets government central the system, Finnish Inthe services. public rol have a significant currently municipalities Finnish years. 42% coming some in the to decreasing continue to 43.2% to is expected and decreased 2017, In Belgium. rate and tax Finnish France the Denmark, by exceeded only was in 2016. This at of GDP 44% stood and countries, OECD in the highest the is among in Finland rate tax the years, in recent slight the decrease Despite industries. exporting of the competitiveness international the support to and markets labour in the increases wage moderate enable to in order rate, partly tax income the decrease to determined been has government current The of taxation. level onahigh based is largely society welfare of the Funding production. 54% some of total for accounts currently expenditure government a result, As society. 2006 2007 2008 2009

“A major reform in regional 2010

government underway” 2011 2012 2013 2014 Source: StatisticsFinland 2015 2016 2017 e in e in l 14 1 The Finnish economy 15 1 The Finnish economy held in October 2018. held in October be to elections county first the and of 2020, beginning the for into come to planned is currently and processes inlegislative law challenges constitutional and political various to due delayed been has reform The counties. of the culture and identity the promoting and of regions use the of steering and planning enterprise, of business promotion the to related tasks and duties development regional issues, environmental services, rescue for responsible be will counties new the services, social and healthcare to addition In history. in Finnish restructurings administrative ever biggest of the is one reform The counties. self-governing 18 to municipalities from transferred be will services social and of healthcare organisation The structure. government regional of the development profound includes also reform The services. healthcare and of social provision and management of the restructuring is the agenda government’s current in the reforms significant most of the One of 2.4% p.a. to 0.9%. 0.9%. of to 2.4% p.a. level current its from decrease to of expenditure rate growth the require would This billion 2029. by €3 some to amounts savings targeted total 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 services. of costs increasing the over control improved include reform service social and healthcare of the objectives main The service reform to come intoservice “Healthcare and“Healthcare social force in 2020” ce in ce service providers. This has also been one of the main main of the one been also has This providers. service private and public between citizens for of choice freedom is the reform the around topics discussed most of the One municipalities have rented from private landlords. landlords. private from rented have municipalities that properties of the agreements lease all manage also will company The hospitals. central large mainly comprising federations, municipal by owned currently properties the manage and own to established Oy, been has Tilakeskus company, Maakuntien Aseparate federations. municipal or municipalities Finnish the by owned currently are properties of these Most properties. healthcare of public financing and ownership the impact also will reform The compani these for premises offering investors property for opportunities new up opens also provision service sector in private increase The services. social and healthcare 25% some of for accounts currently sector private The services. healthcare sector of private supply the increased significan already has reform planned the operations, their reorganise to willingness Together municipalities’ the with in 2020. starting in phases extended be to is planned of choice freedom However, clients’ the 2020. in of services of 2019, responsibility beginning take and in the operations their start would counties the case, this In summer. inthe 2018, force into come to in early and Parliament the to submitted be to is expected this concerning legislation renewed The reform. of the delay the for reasons have asignificant impact on “The service reform will service “The healthcare properties” tly tly es. es. Photo: YIT 12th positions, respectively. 12th positions, in 11th followed Finland Denmark and and Norway whereas Finland, outperform to continued Sweden countries, Nordic other the Of countries. 137 the among evaluated position 2017, tenth its in September published retained Finland latest In the low cost. at avery funding acquire to able be to continues government Finnish the conditions, current In yea in recent outlook the have deteriorated finances public of indebtness increasing and deficit the hand, other the On agencies. rating the by appreciated are workforce skilled highly and institutions strong Finland’s “stable”. as outlook the consider all /AA1, and at AA+ category, best second the in Finland rated all have Fitch well as as Moody’s, & Poor’s, slightly recently. Standard deteriorated have they although strong, remain Finland for ratings credit long-term The of citizens. welfare overall well as as economy of the competitiveness the regarding indicators at various that look rankings international in many position good its retains Finland competitiveness 1.4 Finland’s international defined. be is to yet finances municipalities’ on the impact its and space of excess However, amount the period. transition the after vacant left be thus would and counties, the by needed be not will properties current of the portion a that It is expected term. longer in the provision service their for needed premises the define will counties the this, After period. initial this for municipalities the from metres square 6million over comprising premises 7000 some rent will counties the estimates, current the to according and is underway, municipalities the by used currently premises of the survey Amajor years. of three period a transition for municipalities by the operated and owned currently properties the all rent will counties the addition, In Finnish state remain strong” “The credit ratings credit of the“The World Economic Forum’s Global Competitiveness Report Competitiveness Global Forum’s World Economic The mostThe competitive national economies in 2018 United Kingdom(7.) The Netherlands(4.) United States(3.) Switzerland (1.) Hong Kong(9.) Singapore (2.) Singapore Germany (5.) Germany Finland (10.) Sweden (6.) Japan (8.) ...... 5.96.0 5.8 5.7 5.6 5.5 5.4 5.3 5.2 5.1 5.0 rs. rs. , of two places since 2016. since places of two improvement an showing position, 4th in the was Finland competitiveness, ondigital report ranking separate IMD’s (9), (11) However, in Finland. Norway and outperform all (7), Sweden Denmark in 2016. place ranking, this In 20th in the been having after 15th the to position upgraded was of 2017, Ranking World Finland In IMD’s Competitiveness subindex. Security and in Safety first 2017, report ranked was Finland Competitiveness Tourism Travel the and comparison, WEF another In business. doing for factor problematic one as identified also was regulation labor Restrictive environment. macroeconomic and infrastructure size, market to regard with worst performed Finland pillars, assessed the Of fourth. ranked was Finland market, financial of the development the to regard with and position, second in the pillar, was Finland training and education higher Inthe education. primary and health in well as as framework, institutional of the functioning the to regard with first ranked was Finland ranking, the In Helsinki 6th in its ranking of “Global cities of the future”, future”, of the cities of “Global ranking in its 6th Helsinki ranks Times Financial The instance, For conditions. living well as as environment business its to regard well with performs typically Helsinki capitals, global the Among world. in the country stable most 2017, the be Index to State assessed was Fragile Finland Peace’s for Fund The In countries. other from winners the differenti factors the as of institutions transparency and positions inpublic of those behaviour the governing rules systems, information to access strong identified report The Zealand. New and Denmark after 176 countries, Index Perceptions International’s InTransparency world. the in countries corrupt least of the one as is known Finland Economic Forum’s Global Competitiveness Index” Index” Competitiveness GCI 2018score 10th position in World for 2016, Finland was ranked third among among third ranked 2016, for was Finland “Finland retained its Source: World EconomicForum (ranking in 2017) in (ranking Global Corruption Corruption Global ating ating 16 1 The Finnish economy 17 1 The Finnish economy education and environment. environment. and education satisfaction, job conditions, housing include comparison this well in performs Finland where aspects Other countries. EU 28 among three top inthe ranked was satisfaction life overall of life, Finland’s of quality comparisons in Eurostat’s Also of citizens. satisfaction life overall the and safety quality, environmental system, education of the accessibility and quality the example, for include, of Finland strengths the comparison, this In ninth. ranked 2017, Index Life was Better Finland OECD’s In enrolment. school insecondary parity gender poor from well as as expectancy, life expected than lower rate, and suicide high a to due wellness and health from came rankings poorest The care. medical basic and choice, nutrition and freedom personal instance, for including, index, in the assessed indicat in 16 of 50 nation the out performing top the was Finland Denmark. 2017, after second ranked Finland in summer published Index Progress Social Inthe of living. quality assessing rankings well in international performs typically countries, Nordic other with together Finland, cities. 46 among 3rd ranked was Index GTCI), Helsinki Talent Competitiveness City Global (The workforce talented retain and attract to ability cities’ of the ranking INSEAD’s In is assessed. capital innovation global attract to ability cities’ the where system are highly are system appreciated in international comparisons” international in least corrupt countries in countries least the corrupt “Finland remains one of the “Security, cleanliness and and cleanliness “Security, a high-quality education world” OECD Life Better Index 2017 – Finland– OECD– ors ors OtherNordics Source: OECDEconomic SurveyofFinland2016 comparisons conducted in the property markets. The Finnish Finnish The markets. property in the conducted comparisons inthe reflected is also environment business overall The of Finland. weaknesses main the as regarded commonly are regulations labour restrictive and rates tax High market. the of size small the with deal mostly in particular, perspective a busine from of Finland, characteristics not-so-positive The living. and business support healthcare and education high-qua and framework regulatory stability, transparent economical and political where economy welfare Nordic a respected as reputation Finland’s illustrate rankings These 8th. ranked was Helsinki capitals, cleanest of the comparison Telegraph’s InThe abroad. from Finland to moving of families of view point the from of life quality at the looks which Index, Life Family in its place in first Helsinki ranks InterNations in infrastructure. well performed also and healthcare, and (100) in stability scores full received Helsinki comparison, this In 140 cities. among 9th ranked was Helsinki Cities, Liveable Global Unit’s Intelligence InEconomist cities. global the among in liveability well in comparisons ranks also Helsinki are expected to remain stable in 2018. stable remain to expected are values capital and rents both report, Inthis “fair”. as regarded are development property for those whereas strong, rather remain investment for prospects 18th its The place. retained report Institute’s Land Urban and Cooper’s In Pricewaterhouse European markets. transparent” “highly six the among of 2016 Finland ranked Index Transparency Estate Real JLL’s world. in the Global transparent most of the one as is regarded market property Emerging Trends in Real Estate Europe 2018 Europe Estate Real in Trends Emerging comparisons concerning concerning comparisons “Helsinki well ranks in liveability ” liveability , Helsinki Helsinki , lity lity ss ss Significance of 14 regions biggest city in Finland , migration. negative from suffering inregions 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 jobs. of 72% all and 74% some GDP Finnish of the represent currently areas city 14 75%. biggest at These least to increase to expected is share their 2040, By regions. city 14 in the lived biggest population Finnish 2016, by of the and 69% some areas, in urban lived population Finnish of the 60% some 1990, In years. in recent in Finland fast proceeded has Urbanisation 1.5 Main regions city in Finland Jobs (2015)Jobs (2016)Population Research and development expenditure (2016) expenditure development and Research GDP (2015) GDP Private-sector jobs (2015) jobs Private-sector Completed dwellings (2010-2016) show the growth” strongest “The largest regions city “The Main regions city in Finland Helsinki region 35.2 32.3 34.6 7617.6 27.6 37.0 47.4 million. The Helsinki region currently represents some 26% some represents currently region Helsinki The million. 1.7−1.8 to increase to is forecasted population the 2050, by and, 17−19,000 by annum, per increasing inhabitants been has region Helsinki of the population the years, recent In area. metropolitan Helsinki the form of Kauniainen, city smaller the with Vantaa, together and which, Espoo Helsinki, include region in the cities main The inhabitants. million 1.4 some accommodates currently which region, Helsinki in the fastest be to is expected and has growth Population regions. city these between growth and performance economic in the differences significant are There Lappeenranta. and Vaasa, Kouvola Hämeenlinna, Seinäjoki, Joensuu, Kuopio, Pori, Jyväskylä, Lahti, 10 regions: –include inhabitants 100,000 about or than more with –those regions city of tier second The growth. population and development economic show well strong and perform generally regions These Tampere, Helsinki, Turku Oulu. and inhabitants: 250,000 than more with regions city four are There % of total % of The regions of Tampere, Tampere, of regions The Turku and Oulu Turku and 21.8 18.1 29.1 16.6 17.6 14 biggest city regions city 14 biggest Licensed under CC BY 4.0. BY CC under Licensed data. Open Finland Statistics contributors. OpenStreetMap Data: Culture. and Education of Ministry Map: services web Finland OpenStreetMap KTI. by map the to Additions Source: Statistics Finland Statistics Source: 80.2 68.6 91.3 72.2 74.3 74.6 18 1 The Finnish economy 19 1 The Finnish economy almost half of the increase. of the half almost represent would alone region Helsinki The cities. largest the towards weighted heavily be would demand residential in increase the scenario, this 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 2040. by inhabitants 625,000 of some increase in an resulting accelerate, to is estimated regions 14 to city main migration scenario, “urbanisation” Inthe structure. regional on current based are estimates growth population scenario, “conservative” the In 2040. by 5.8 million to grow to is estimated population Finnish the scenarios, both In scenarios. different ontwo forecasts its of Finland based Centre Technical Research 2015, VTT the in published 2040, by demand on residential study In its 90%. some as high is as construction of new share their currently and regions, city in these constructed been 2010 have 2015, dwellings and of new 80% some Between 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 regions Residential demand in the main city added. of 88% value some and 78% of jobs 75% some population, Finnish of the comprise cities These Finland. across centres regional all are C21 group called so in t Cities in Finland. cities 21 largest between interaction and co-operation promote to started has of Helsinki Mayor elected newly the urbanization, increasing the to Due 11% some by 8%. some by Turku and region grow to is expected Tampere the region period, same the In 2015 2030. and –between 14% people almost –35,000 by grow to is expected population whose region, Oulu the in strongest the be to is expected growth terms, relative In 1.2% country. whole of the only represents 31%and area land the as even jobs, of all GDP total 36% country’s of the population, total of Finland’s increase in housing demand” represents almost half of the increasing in the main city “Demand for“Demand housing is “The Helsinki region“The regions” his his regions 2000-2016 2000-2016 regions Housing construction in main city and 4% of building permits, respectively. respectively. permits, 4%and of building 9, for 8 –accounted –Tampere, Oulu Turku and regions city main three other The region. Helsinki in the applied in 2017, permits building 45% were some residential all Of markets. housing rental subsidized for 9,000 some and investment, residential sector private for built be to estimated are dwellings 15,000 in 2017, starts the Of some cities. main in the housing rental of private supply increased as result will which demand, investment strong by is boosted development New 70%. to increases share the regions, city main three other the with together and construction, of residential 46% for accounts alone region Helsinki buildings. in apartment apartments onsmaller and cities, onmain is concentrated development New records. many broken in2016, already than had which more 9% is some This dwellings. 40,000 some to amounted and significantly increasing continued starts construction 2017, In cities. largest inthe residential especially years, in recent markedly increased has construction Residential 2% 2% 1% 2% 2% 3% 2% “Growth of the“Growth main cities boosts rentalboosts residential 3% 3% 22% 25% development” Tampere Vaasa Seinäjoki Kuopio Jyväskylä Turku Oulu Helsinki 4% 4% 5% 6% 7% Other Kouvola Pori Lappeenranta Hämeenlinna Joensuu Lahti 7% 10% 32% 30% 9% 7% Source: RT RT Source: shareholders. of responsibilities and procedures well decision-making as shareholders, to plans of these communication the and of repairs planning long-term instance, for regulates, Act company. the for The framework regulatory the as ( 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 ( sector housing in the operate that companies estate real mutual regulate Decree and Act Companies Housing The properties. commercial and residential inboth 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, on the of space apartment/amount aspecific to connected be may shares The shareholders. company, several or one limited have is may the which estate real of the owner legal the cases, Inthese property. the of owning purpose sole the for company) founded housing (a estate/ company real alimited through organised be 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 in Finland property owning terms, In juridical 2.1 Two ownership forms of property market property of theFinnish 2 Institutionalaspects asunto-osakeyhtiö mutual real estate companies” estate real mutual between thebetween shareholder and commonly organised as “Property ownership is “Property ). These regulations are always applied when when applied always are regulations ). These agreements are madeagreements are “In MRECs, rental MRECs, “In the tenant” the osakeyhtiölaki ) the shares are not connected to any specific premises. premises. specific any to connected not are shares the companies, Inthese properties. or property acertain owning company ( limited is astandard company estate of real type other The lender. original the to loan the covers then ( charge finance a pay shareholders the cases, these In collateral. as estate real and building the use and modernisation, and renovation for example, for aloan, out take also can itself company The shareholder. each for designated area floor onthe 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. 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 kiinteistöosakeyhtiö rahoitusvastike ) to the mutual company, which mutual the ) to ), founded for the purpose of purpose the for ), founded

Photo: Skanska / © 2017, Kuvatoimisto Kuvio Oy 20 2 Institutional aspects of the Finnish property market 21 2 Institutional aspects of the Finnish property market demand for specialist services in property transactions. in property services specialist for demand the increased also has This processes. investment property in practices innew resulted –have analysis sophisticated more and professionalism internationalisation, increased players, of new emergence the includes –which market property Finnish in the decade last the over Developments investment Property renting and investment property of practices Market 2.2 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. As and straightforward are shares company estate real or housing with Transactions transactions. property into entering when lawyers or brokers estate real use to it is advisable provisions, certain to subj are transactions estate real as but estate, real selling or onbuying restrictions no are there principle, In liberal. and is simple system legal Finnish the speaking, Generally transactions Legislation concerning renting and law. by public not are transactions These compani estate of real shares the by transacting made are market Finnish in the transactions property commercial of majority the practice, In of property. management and ownership the organise to way is acommon company estate real mutual the transparency, and flexibility its to Due company by-laws. in the agreed otherwise unless of ownership, share their on depends of control degree owner’s law. individual An by set requirements certain fulfil to have which articles, company’s in the defined are company estate real mutual of a procedures management and decision-making The estate. real of ownership direct to compared complicated less also are Transactions property. 4% ondirect versus company limited lower: of the is also rate 2% shares onthe tax transfer The owners. several among is divided of abuilding ownership the where in cases example for of ownership, form flexible more is a company estate real amutual through property Owning practices market on Impact transactions is simple and concerning renting and and renting concerning “Finnish legislation legislation “Finnish liberal” ect ect es. es. reorganize their property holdings. holdings. property their reorganize to willing are that institutions domestic with work also but investors foreign serve mainly companies These investors. co- as acting sometimes well as as services management hands-on offering established, been have companies new several years, recent In market. in the of players types new about brought also have conditions market current The limite 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 investment in the agent property or advisor of the role The common. more were buyer individual potential the identify to approaches in 2009−2013, tailored years quiet the that, during Before solution. best the find to in order processes auction extensive out carry to sellers encouraged has demand investment high years, recent In situation. market onthe depend partly out carried are processes transaction ways The agreements, some 50% of all office agreements in the agreements office of all 50% some agreements, of number the by measured database, rental KTI’s In termination. lease justify to used conditions the among are portfolio property the of rearrangement or changes, mix tenant adjustment, Rent contract. the terminate to cause however, acceptable have an must, landlord The spaces. smaller and buildings office in multi-tena 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 ten 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 pa 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 and institutional investors are “New types of players types acting“New ”Finnish rental agreements as co-investorsas for foreign are typically short typically andare provide flexibility for emerging” tenants” rties rties ant ant nt d.

1 regarding the space they use. The owner is responsible for repair and repla and repair for responsible is owner The use. they space the regarding p the for responsible typically is owner the electricity, and cleaning to respo owner’s the are building the of areas outdoor and indoor both for costs in recent years have increased more than overall inflation. inflation. overall than more increased have years in recent which costs, inoperational increases the against landlord the hedges and in costs savings for tenants the encourages both This tenant. the to separately cost maintenance the recharges 15%, landlord the remaining inthe cases many In rent. gross traditional for are database rental KTI in the agreements 85% some of office of agreements, number by Measured types. property in all buildings in multi-tenant common repairs. minor and costs operating typical covering charge aservice plus rent net includes which rent”, “gross for are Traditionally, agreements rental 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 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 years. five to three is fro term fixed a typical buildings, office In multi-tenant countries. other many with compared short quite typically are periods contract the used, are terms fixed When periods. long for last often leases indefinite flexibility, their Despite premises. larger in used often are terms fixed as is larger, agreements lease of fixed-term share the area, space total by Measured parties. of the either from notice further – until period indefinite an for automatically continue they which after 5years, or of, 3 example, for term afixed have first agreements of the 25% Another indefinite. are area metropolitan Helsinki sqm area, Helsinki metropolitan the in agreements lease office of Distribution Gross rents are where the land rent, insurance, property taxes and operatio and taxes property insurance, rent, land the where are rents Gross 30% 25% “Indefinite lease are terms 4% 36% 6% common” 7% 34% 30% 9% Source: KTI Rental database database Rental KTI Source: 1 Gross rents are very very are rents Gross furthernotice Fixed+until Until furthernotice Fixed term ublic areas of the building, and tenants have their own electricity and cle and electricity own their have tenants and building, the of areas ublic m 7% cement costs if caused by normal wear and tear. and wear normal by caused if costs cement nal expenses are paid by the owner. This means that management and maintena and management that means This owner. the by paid are expenses nal nsibility. This is also the case with heating, water and waste disposal. Wi disposal. waste and water heating, with case the also is This nsibility. 9% turnover-based. These usually consist of a minimum base base of a minimum consist usually These turnover-based. are centres in shopping agreements 20-25% of rental Some 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 been clearly seen, for instance, in the Helsinki metropolitan metropolitan Helsinki in the instance, for seen, clearly been has This things. other among tenants, new for improvements tenant and increases rent stepped periods, rent-free offer may landlords instance, For applied. be can tenants retain and attract to means various situations, In over-supply turnover. tenant’s on the based solely be may rent the –cases few very –but some In cash-flo their for base a stable secure to wants landlord the low, quite as is typically rent of the part turnover-based the However, of turnover. share agreed an by supplemented rent number of lease agreements agreements lease of number area, Helsinki metropolitan the in agreements lease office of Distribution refurbishments can be agreed freely between the 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 to tenants. recharged is typically expenses shared other and marketing for charge service aseparate also where centres, shopping for typical very is also costs of maintenance recharging Separate and insurances can be agreed and insurances agreed be can maintenance costs separately “When net applied, rents are “When the responsibility for taxes 50% 25% “A landlord recharge can 4% 6% to the tenant” the to 7% 26% 24% freely” 30% 9% Source: KTI Rental database database Rental KTI Source: furthernotice Fixed+until Until furthernotice Fixed term aning agreements agreements aning th regards regards th nce nce w. 7% 22 2 Institutional aspects of the Finnish property market 23 2 Institutional aspects of the Finnish property market etrve Anal Anal Anal Anal Annua Annually Annually Annually Annually In reviewRent adod landlord landlord Ex Indexat B etlpyet Mnhy otl Mnhy otl Month Monthly Monthly Spac turnover Monthly area Space area Space Monthly area Space / area Space paymentsRental rent for Basis furt Typica rprytxs adod adod eat adod Tena Landlord Tenant Landlord Landlord i cost-of-living The taxes Property Sector Shopping High str High Shopping Sector ete sos mres m markets shops centres Lease Lease are published monthly at the same time as the consumer price i price consumer the as time same the at monthly published are development, t development, From the user’s point, the cost-of-living i cost-of-living the point, user’s the From decisions in land use planning matters. planning use in land decisions independent make to powers extensive have authorities local act, current the In needs. local to according is defined which of content the ordinance, building own its has authority local every addition, In townscape. physical of the formation and building the regulate to used are plans local Detailed plans. regional of the follow guidelines the to needs but authorities, b level. It is produced at a general use land coordinating and guiding for instrument is an plan master local The plans. regional for responsible currently are who Councils, Regional well as as use land and planning steer and promote Development), currently which Economic for (Centres ELY centres current of the tasks the over take will They in2020. 18 new the to counties moved be also will that tasks of the is one use of land steering and plans Regional plan. the confirm to powers of 2016, the have also beginning the who, since Councils, Regional by approved and up drawn are plans Regional considerations. environmental and functional structural, embrace which plans, regional in the reflected are use land of principles national These of State. Council the by defined are structure regional and use land for principles National of 2018. of beginning as reformed was which of Finland, Code Building National in the issued are building concerning guidelines and provisions Further plans. local detailed and plan master plan, alocal use land aregional plans: use levels of land three has system The Act. Building and Use Land the by is regulated in Finland use Land 2.3 Planning in statistics. capture to difficult is very markets levels and rental overall on the terms of these impact the However, demand. decreasing with coincided has supply in increase an when years, in recent markets office area ui te te l di nlrpis eat/ Tnn Tnn Tnn Tnn Tenan Tenant Tenant / Tenant Tenant Tenant / repairsrnal nlrpis adod adod eat adod Tenant Landlord Tenant Landlord Landlord repairsrnal gisrne adod adod eat adod Tenant Landlord Tenant Landlord Landlord insuranceng te io m -5 -0/utl 1-5 - ni 1-0 -5 Until 5-15 10-20 /until 3-5 10-15 3-10 /until 5-15 rm n Cost of living Cost of living Cost of living Cost of living Cost of l of Cost living of Cost living of Cost living of Cost living of Cost n l le he also impact land and use refore, follows the consumer price i price consumer the follows refore, as nd “Regional reform will ex ex i 19 ng 51:10 =100 is a long time series calculated from the latest consumer price i price consumer latest the from calculated series time along is 51:10 =100 practice planning” nd ex is the most usable usable most the is ex s in Finland in he oie furt r notice nd ex. Many rents, such as those on dwe on those as such rents, Many ex. ee ue- fcs Ofie, Indust Offices, Offices, Super- t nd on ex. (Statistics Finland) Finland) (Statistics ex. e, because i because e, y local y local

nd ex revis ex adopt an open and interactive approach to planning. The The planning. to approach interactive and open an adopt to municipalities obligates Act Building and Use Land The building that is being applied for. Special permits to exceed exceed to permits for. applied is that being Special building of size and type the allows plan ifthe granted be may permit A building municipalities. by approved are permits Building area. in the businesses and residents inlandowners, planning: concerned those of all involvement the at facilitating is aimed process planning local any specific reservations in the plan. This will markedly markedly will This plan. inthe reservations specific any without construction, commercial common for designated in areas built be can limit below this stores that means This area. coverage in 2017 local sqm with units for 4,000 to increased was of “large” concept the legislation, In the plan. in the designated be have to which connections, traffic public good with in locations developed be only can units retail large this, outside retail; for location the as centre city of the position the emphasises legislation current The units. retail large for permits building and plans the over coordination and control regional concerns reform significant most the Business-wise, limited. be will complaints for rights and faster, made also were processes complaint The changed. were rights building exceeding for rules the easier, and made was homes of second use permanent instance, for in 2017, force into came minor,mostly changes whereby, other, Some Councils. Regional to Environment of the Ministry the from moved was plans regional confirming for of 2016, authority the when beginning in the taken were steps First processes. permit construction and planning the up speed thereby and planning and use land concerning regulation the simplify to is aiming government current The decisions. planning impact sometimes can which employers, –and residents and companies both – taxpayers attract to issues use land and planning using by other each with compete municipalities In practice, years. is five use of temporary kind this for period maximum The get. to easier –is usually housing temporary for building office an using for instance, –for of use change atemporary for a permit Obtaining time. along take typically processes permit and obtain, to difficult typically are these although granted, be also can property of the use the change or right building the ul io he n itnn snl-eat oitc logistics single-tenant ti-tenant s do not in not s do lli oie furt r notice ngs, business premises or land, are usually tied to the cost-of-living i cost-of-living the to tied usually are land, or premises business ngs, nd te ex (currently consumer price i price consumer (currently ex rr upt the series and the point figures of the cost-of-living i cost-of-living the of figures point the and series the upt e area Space area Space area Space area Space e area iving Cost of living Cost of living of Cost living of Cost iving l Anal Annually Annually lly t eat Landlord Tenant nt y otl Monthly Monthly ly eat Landlord Tenant eat Landlord Tenant nd ri ex 2 ex l Resid al, Landlord t 00 0 = 100) and its its and 0 =100) he r notice ent ial ial nd nd ex ex ex. ex. municipalities (local government), the Social Insurance Insurance government), Social the (local municipalities government, of the on behalf levied Taxes are in Finland 2.4 Taxation in Finland period. electoral next the during time some completed be to is expected legislation The reform. the steer to committee working aparliamentary up set will Enviroment of the Ministry the report, onthe Based responsibili municipalities’ the be would plan development detailed a more and municipalities, and by counties approved and prepared be would plan general a strategic where system, by a two-level replaced be to procedures planning current recommended group 2018. in early The report its finalised which group, aspecialist up set Ministry the reform, the preparing start to In order in regulation. – account into regions between differentiation increasing and urbanisation digitalisat change, climate as –such environment operating in the changes major the take is to project of the aim The in 2017. Act Building and Use Land in the reforms major for preparations started Environment of the Ministry The plan. regional in the included be to need units these for Possible locations regions. different in sqm 10,000 and 5,000 between set been has plan, and regional in the defined be can of “large” definition the area, coverag regional with units retail For stores. grocery larger of, example, for construction of the flexibility the increase However, foreign “key employees” may qualify for a special tax at the flat ra flat the at tax aspecial for qualify may employees” “key foreign However, taxe is months six than more for Finland in staying persons of income earned The wag on source at a35% tax collect employers Finnish Finland. from received mont six than less of aperiod for Finland in present persons purposes, tax 2 For for duties requiring special expertise. For these “key employees”, sp employees”, “key these For expertise. special requiring duties for “A reform in the Use Land and Building Act is being planned” ecific rules concerning work and salary levels apply. See www.vero.fi apply. See levels salary and work concerning rules ecific ion, ion, ty. e e te of 35% during a 24-month period if they receive any Finnish-source incom Finnish-source any receive they if period a24-month 35% of during te es, unless they have received a tax-at-source card instructing otherw instructing card atax-at-source received have they unless es, hs are considered non-residents. They pay tax in Finland only on income income on only Finland in tax pay They non-residents. considered are hs d according to the same rates as that of permanent residents of Finland. Finland. of residents permanent of that as rates same the to d according expenses related to investments (for example, management (for management example, investments to related expenses typically and rules, deduction different are there income, help). capital (eg. of domestic For costs taxes from directly made are some work), whereas from and to of journeys costs interests loan of housing (forincome part example, earned from made are deductions of the Part taxation. taxpayers’ in individual allowed are deductions Some is 34%. rate tax the euros, 30,000 exceeding income capital For at 30%. stands currently rate tax gains capital The profits. sales and dividend, income, rental interests, on, example, for is levied tax income Capital rate. tax at a flat municipalities the to and rate at aprogressive state the to paid is tax Income income. capital and income categories: earned two into is divided income taxpayer Individual economy. strengthening the by supported increased, onconsumption VAT well as based as taxes, taxes other and of corporate shares The rates. in tax made deductions the slightly, to due decreased households by paid of taxes share In 2016, 48%. some for the accounted on consumption based taxes while revenue, tax 52% total of some the for accounted onincome Taxes billion. based €64 some to amounted municipalities and state of the revenues tax 2016, total the other. onthe In services and ongoods taxes and hand, one on gains capital and profits onincome, taxes categories: two from is derived in Finland of taxation bulk The headings. different forty some under listed funds security social various and Institution income. worldwide ontheir taxed are individuals resident Finland, In taxation. government central and taxation municipal between differ also rules Deduction deductable. fully are costs) refurbishment and interests fees, 2 ise. ise. and and e Photo: YIT 24 2 Institutional aspects of the Finnish property market 25 2 Institutional aspects of the Finnish property market The average rate is currently 0.49%. is currently rate average The 0.41% 0.9%. between and vary can residences permanent Tax for rates at 1.06% onaverage. is set and annum, per value taxable of the at 1.80% at 0.93% maximum and stands currently rate tax property general minimum The range. this within rates the decide municipalities and parliament, by the regulated are rates tax maximum and Minimum tax. property real from is exempt agriculture or in forestry used Land is situated. property real the where municipality the to goes revenue The property. of the value market below of the somewhat is generally and authorities tax by local is defined value taxable The property. of the value taxable onthe is that based tax property areal to is subject in Finland situated property Real Tax on real property (VAT). tax value-added and taxes corporate taxes, transfer taxes, gains capital taxes, property are investment property for relevant most taxes the system, tax Finnish the In rise. not will rate tax overall the and increased be not will onlabour taxation that away in such outlines policy Government’s the with in accordance implemented be to is planned reform The accordingly. increased rates tax state and decreased, be will rates tax municipal the Therefore, government. central the from funding their get will which counties, to transferred be will expenses these futur In the municipalities. of the category expense biggest the are services social and healthcare Currently, taxation. on impact amajor have will reform government Regional at 34.3%. stands 2016 44.1%. average the was OECD, the In in GDP to taxes of total ratio Finnish The countries. OECD for average the above is clearly in Finland of level taxation The employer. the of sector business and size onthe partly depend contributions these of level The scheme. unemployment an well as as schemes pension occupational and national scheme, insurance health anational to payments include employers Finnish by paid contributions security Social statistics. comparison tax international inOECD’s taxes as included are of which some by taxpayers, paid that are contributions security social obligatory some are there taxes, actual the to addition In revenues. total municipalities’ 42% some for of account taxes income average, On 22.5%. 17% and between vary rates 2018 tax for and municipal Municipalities decide their rates tax independently, scale. tax progressive inthe thresholds income the increasing slightly by decreased also was 2018.for taxation Income 31.50% 31.25% income to from of earned decreased was rate highest the and is progressive, rate tax state The 3 transfer is due to an inheritance, a donation or a division of property subje property of a division or adonation inheritance, an to due is transfer No tax is imposed if a person aged between 18 and 39 acquires his or her first owner- first her or his acquires 39 18 and between aged aperson if imposed is tax No “The Government policy“The commits not to increase taxation of labour” e, ct to matrimonial rights. matrimonial to ct percentage for this tax. If the shares fall into the category category the into fall shares the If tax. this for percentage alower set normally which countries, several with treaties tax special has Finland countries. non-tax-treaty and non-EU to disbursement is onthe applied rate tax a30% dividends, For tax. source afinal withholds payer the Finland, from receive royalties or interests dividends, Of non-residents. for also at 30% taxed is typically income Rental in Finland. gains oncapital liability tax alimited have Non-residents years. following five year, in that possible not during or, loss, of the year in the if gains capital from deductible is oninvestment made loss Capital deductible. are income, investment the to related directly are that expenses interest as such costs, at 34%. Financial is taxed €30,000 exceeding income Capital at 30%. stands gains) currently capital and income rental net (interest, income Tax oninvestment Capital gains taxes decade. past the within times several increased have been rates tax property Minimum continued. have taxes property increasing for pressures as of years, couple past the during constantly increased has share Their properties. 7−8% of residential of those some and properties, of office costs operational annual 22% total of some the represent typically taxes Property rate. tax property general the than higher percentages 3.0 at least be to is set rate tax this area, metropolitan Helsinki Inthe lots. on unbuilt levied be may rate tax A special instance, the tax status of the shareholder-beneficiary and and shareholder-beneficiary of the status tax the instance, on, for depending rules, specific by provided as taxed be will company liability of alimited shareholders dividends, of taxation the for legislation current the to According at 20%. stands currently rate tax income corporate The itself. entity the to attributable income as taxed are profits the societies, cooperative and companies of limited case the In entity. of corporate form the by determined largely are organisation or of acompany obligations Income-tax taxation Corporate purchaser. onthe imposed is usually Transfer tax tax. transfer to subject always nevertheless, are, company housing or estate in areal Shares non-residents. are seller and buyer the ifboth or exchange stock the through place takes transaction if the exempt is tax of securities transfer The company. estate real mutual of the debt potential and price sales actual the both comprising price. transfer of the is 2.0% company estate real or in ahousing shares buying by made transactions for Transfer tax price. is 4% transfer of the property of real Tax transfer onthe Transfer taxes net of assets the company. onthe companies, non-listed for also, –and not or listed it is publicly –whether dividend the pays that company of type onthe depend consequences tax The Finland. in double-taxed is partially income Taxation of dividend is levied. at source tax the requirements of the Parent-Subsidiary Directive, no fulfils company beneficiary the and investment, of direct occupied permanent home. 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The declining balance method applies to the the to applies method balance declining The in taxation. depreciation by deducted are assets fixed acquiring for Costs the investor level. investor the at is taxed income capital instance, for transparent; tax also are investors, at private targeted in funds used commonly currently are which structures, fund investment Special Finland. outside domiciled typically therefore, are, of funds, kinds These investors. at foreign targeted funds to applied beneficially be cannot structures up. 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The tenants. and premises the concerning met are requirements certain when granted is typically liability The rents. VAT collecting for liability for apply to owner aproperty for it is optional Finland, In is 10%. rate the services, VATthe certain and is 14%, medicine rate books, for and products food For services. and of goods groups specific VAT lower some are for rates There services. and goods for at 24%. charge VAT total on the stands is calculated VAT currently rate standard The investment. property for that is relevant (VAT) tax tax Value is another added Value tax added property. These special investment funds are stipulated by by stipulated are funds investment special These property. regulation for these funds differs from normal investment investment normal from differs funds these for regulation The Directive. Managers Fund Investment Alternative the by stipulated are managers fund investment Special Authorities. Supervisory Financial Finnish the by regulated are and (in Act Finnish, Funds Common Finnish the ( funds investment special of establishment the enables also legislation Finnish The funds investment Special increased. has forms legal and structures of different diversity the investment, property of indirect expansion the with together years, However, in recent mid-2000’s. the from starting industry, funds of property days early in the structure dominating the were partnerships limited as organised funds Property perspective. institution’s an from favourable not thus and taxation, corporate to is subject in property investing companies limited from income investment Correspondingly, fund. of the establishment the before authorities with details the negotiate to recommended it is therefore and depends, for instance, on the nature of the fund’s business, business, fund’s of the nature onthe instance, for depends, companies Taxation met. of limited are conditions certain that provided status, tax investor’s the to according taxed

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lli on ) that invest in invest ) that ex r t le cip e sf are always n bu ng e pri Sha io t d re sa valu er th ax. s ist he cha alit n, ww n, t ildi c c he ta e re p a ti e tota n y a ng l e de on kes s s i ur ax- g o e f t e h nd w. stat s an ch n a are l he o pl vero. are type as d r i ned ac e s er f e fi ) Titanium Rahastoyhtiö: Titanium Hoivakiinteistö (care • Fennia Varainhoito: Fennica I (commercial properties) • Elite Asset Management: Elite Vuokratuotto (residential • Tein ud AF: rva Hg Yed Property Yield High Trevian AIFM: Funds Trevian • (both OP-Vuokratuotto Management: Property OP • eQ Fund Management Company: eQ Hoivakiinteistöt • CapMan Real Estate: CapMan Nordic Property Income • by: managed those include in property investing funds investment of special Examples funds. these to capital attracted have investments property of performance strong the and rates low interest as years inrecent substantially grown have funds investment Special in them. interest increasing showing are in particular, ones smaller institutions, some Also rules. investment minimum low very apply funds many therefore, and investors, private at targeted extent, large to are, funds These companies. management investment and banks various by launched been have strategies varying with funds more several then, Since in late 2012. launched was framework this under fund first The purposes. tax Finnish for transparent fully as considered are and entities taxable not are funds investment Special fund. of the value 5/6 total of to the up exceeded be can limit this reasons, specific For fund. of the value total of the 50% to is restricted funds of level these gearing long-term The valuers. qualified and independent by out carried be must valuations Property units. of fund value the in defining properties their of values fair use must Afund quarterly. fund of the value the publish and define to required are funds investment Special liquidation. after only defined be may units of the value the assets, fund’s the liquidating requires units the if redeeming instance, For pricing. their and redemptions for rules limiting be might there circumstances special under and months, long, six rather is also redemptions for limit time maximum ayear. The twice only redemptions for and quarterly subscriptions for open be may a fund instance, For rules. fund inthe stipulated are funds the from redemptions in and investments for ayear. Provisions twice at least redemptions accept and investments new take must fund the legislation, the to company. According management fund aseparate by manage structures open-ended are funds investment Special units. fund of pricing and valuation fund for requirements well as as of risks, diversification to regard with instance, for funds, properties) and Titanium Asunto (residential properties) (residential Asunto Titanium and properties) residential and commercial properties) and OP- and properties) commercial and residential (commercial properties) (commercial Palvelukiinteistöt (public properties) sector properties) (care properties) and eQ Liikekiinteistöt (commercial cities) Nordic in largest properties retail and (mainly office Fund properties) grown significantlygrown in recent investing have in property “Special investment “Special funds years” d d comply with strict accounting rules. • pay out 90% of the profit as dividends • managers. and partners investment their with together investors, institutional by established structures in joint venture common more become also has structure company liability limited the years, recent In companies. liability limited normal as organised that are companies investment property residential major example, ar There estate. in real investing companies listed in non- used widely is also structure liability A limited Blackstone. by managed fund investment by Polar an Bidco, company of the shares of the acquisition in 2017 the delisted to was due Sponda, companies, listed of the largest The Asuntorahasto. Orava and Hoivatilat Suomen House, Technopolis, Investors Citycon, include exchang Helsinki Nasdaq of the list in main listed currently compani Property companies. normal as taxed are and Act Companies Liability Limited the by regulated are They companies. liability of limited form in the operate companies of property majority the context, Finnish the In companies Property lots. building or forestry as such assets, of real types inother investing funds investment special manage also companies management fund of these Some and A Asuntorahasto Rahastoyhtiö: Ålandsbanken • UB Fund Management Company: UB Nordic Property • of the company, as well as redefining the company’s strategy. strategy. company’s the company,of the redefining well as as structure management the it that is reconsidering informed board appointed newly the acquisition, the After shares. REIT’s Residential 25% of Orava some acquired that it had published House company, Investors investment property another InOctober, shares. company’s at the targeted was 2013. since In2017, Exchange Stock speculation some Helsinki of the list main onthe listed been have REIT Residential of Orava shares The framework. regulatory specific this under operating company only the currently plc, is Funds Orava by managed REIT, Residential Orava popular. very become not has framework the legislation, by the set provisions limiting the to Due foundation. its of years three within listed be to needs company The limit its debt capital to a maximum of 80% of the balance • invest only in rental residential properties • to: companies the require of companies kinds these for transparency tax for provisions The properties. residential inrental investing companies for only given been currently has structures, REIT- known internationally resembling structure the companies, property listed tax-exempt for possibility The Fund (commercial properties in the Nordic countries) countries) Nordic in the properties (commercial Fund sheet Asuntorahasto C (residential properties) properties) (residential C Asuntorahasto

new joint venture structures new joint structures venture ”Institutional investors have have investors ”Institutional been active in establishing in recent years” in recent e, for es es e e 28 2 Institutional aspects of the Finnish property market 29 3 The Finnish property investment market: volumes, structure and players Sponda portfolio had a great impact on these volumes. The The volumes. onthese impact agreat had portfolio Sponda The volume. 26% total for of the properties retail and 40%, some for accounted Offices market. in the sector property attractive most the were properties retail and Office in Finland. located €12 over totalling 8% billion, is some portfolio property Logicor’s Of partners. its and Corporation Investment China to Logicor company property logistics European of the sales the was volume total the boosting transaction 2017. in billion June €3.7 some to large amounted Another portfolio property Finnish Sponda’s in Finland. ever transaction property largest is the Blackstone, by managed Polarby a fund Bidco, portfolio Sponda of the acquisition The transactions. portfolio and company large exceptionally some by in 2017 volume boosted was transactions The 2016 38%. by from record previous the 2017. exceeds level, which record all-time is the This €10.2 to in billion amounted volume transactions Property 3.1 Investment market in 2017 players volumes, and structure investment market: property 3 TheFinnish ”Transaction volume reached new record in 2017” market Transactions volume and turnover in the Finnish property Transactions volume 10 12 1000 MEUR 0 2 4 6 8 2.0 2001 2.0 2002 2.6 2003 3.2 2004 –– Turnover (transactions volume / professional property investmentmarket),% Turnover property (transactionsvolume/professional 2.8 2005 5.4 2006 6.3 2007 4.2 2008 . 1.8 1.8 2009 2.4 investment. property inresidential also increasingly sectors, property in all active were investors Foreign €100 million. exceeding acquisitions ten in involved almost were investors foreign Logicor, and of Sponda transactions the to addition In transactions. of all 68% to increased investors foreign of share the transactions, company large the by Boosted €1.1 to ever, amounting highest billion. third the however, was, transactions portfolio property of residential 38% in 2016 volume 10% to in 2017. annual absolute The of level record the from fell properties of residential share 2010 of years. couple past in the volume relative highest is the which stock, property 16% some to invested of the increased volume transaction size, market total the to relation In markets. property in the turnover proportional the to contribute market transactions in the activity increased The

2011 2.1

2012 transactions higher was than ”Foreign investors’”Foreign share of 2.5 2013 4.3 2014 5.5 ever before” 2015 7.4 2016 10.2 2017 Source: KTI 0 3 6 9 12 15 18 % d d 2006–2017 Transactions sector volume by property Finnish property market in 2017. Their share increased from from in 2017. market increased share Their property Finnish in the group investor largest the became investors Foreign 5.4 9%. or billion by increased year, market the previous the to Compared billion. €63.7 some to amounted market investment property of 2017, end At the professional Finnish of the size the structure Ownership 3.2 1000 MEUR 10 12 0 2 4 6 8 2.3 1.6 2006 investment market by grew 2.3 2.3 0.8 2007 ”The Finnish ”The property Retail 1.6 1.1 2008 Residential 0.6 0.4 2009 9% in 2017” Office Office 0.6 0.7 2010 Direct property investments in Finland 2011–2017, Finland in billion EUR investments property Direct investment market by investor group structureThe of Finnish property 0.3 0.6 2011 Mixed Industrial 2012 0.6 1.0 Care property property Care 0.5 0.8 2013 0.7 10 20 30 40 50 60 70 0 Institutionalinvestors Real estatefunds companies Listed property 1.1 1.0 1.3 2014 0.7 Hotel 01 0221 0421 06 2017 2014 2015 2016 20122013 2011 15.4 42.9 5.7 6.5 9.0 5.2 1.7 1.3 2015 1.3 0.6 Source: KTI (query for investors, annual reports, KTI estimates) KTI reports, annual investors, for (query KTI Source: 2.8 1.7 2016 1.7 0.5 45.7 16.2 Other 6.3 5.4 9.0 7.6 Source: KTI 2.7 4.1 1.5 2017 1.0 47.8 16.2 7.1 . 5.6 5.6 9.3 8.4 Charities, endowmentsandother International investors International 16.0 50.1 7.5 9.8 9.9 Non-listed property companies Non-listed property property companies decreased markedly, from 12% markedly, 4.8% to from decreased companies property of company, listed of the share the acquisition of Blackstone’s at 21% a consequence in 2017. as delisting Sponda’s to Due stable remained companies property of non-listed share The portfolios. property their to positively contributed growth capital also and development, in property investing continued they However, million. €200 some to acquisitions million, and €700 some to amounting sales in 2017 total their sellers with net were investors institutional market, transactions the 25%. In at some ended and decrease to continued market investment total of slightly, the share their grew but Finland In 2017, in investments investments. absolute their property internation their increasing and portfolios domestic their inrestructuring active however, been have they years, recent In market. investment property Finnish in the role adominating had traditionally have investors Institutional in 2017. billion €4.9 some to amounted investments investor foreign market: transactions in the acquisitions of amount large onthe based of 2017. is mainly growth The 21% (€12.3 billion) in 2016 (€18.4 29% to billion) end at the Q n Fni. t h sm tm, eso insurance pension time, same the At Fennia. and eQ LocalTapiola Group, OP of, instance, for positions rising the to contributes which portfolios, their increasing continued have funds property largest The years. in recent list top-3 in the positions their SATO and established have Kojamo companies residential Large years. past inthe markedly changed has investors property biggest of the list The investors. of international share increasing the to contributes investor, which aforeign as categorised is currently Sponda in 2017. statistics, KTI’s In 5615.7 15.6 54.5 1912.3 11.9 11.1 5.8 9.1 largest investor in 2017” group ”Foreign investors became the the became investors ”Foreign 58.2 12.7 6.9 9.6 63.7 11.4 16.2 18.4 13.7 3.0 s’ net net s’ al al , , 30 3 The Finnish property investment market: volumes, structure and players 31 3 The Finnish property investment market: volumes, structure and players of large numbers of people from the 1940s generations, 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 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 investments. equity especially classes, asset onall returns of positive aresult was increase The billion. €14.4 some by increased had year, assets the previous the in period of 2017. corresponding the quarter Since third €198.9 some to of the end at billion the amounted 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 schemes pension other and companies Pension insurance investors Institutional investors. of largest ranking onthe positions top earlier the from fallen have they and portfolios, their restructured have companies Property assets under management at the end of 2017, of end the at management billion under EUR assets Property holdings investorsDirect of property in 30 biggest property Finland **KTI estimate *Ilmarinen andEteramergedasof1January 2018 OP Ilmarinen MutualPensionInsuranceCompany* In Bank ofÅlandRealEstateInvestmentFunds suran LocalTapiola andLocalTapiola’s Group funds Etera MutualPensionInsuranceCompany* Varma MutualPensionInsuranceCompany AXA InvestmentManagers–RealAssets Elo MutualPensionInsuranceCompany ce

and Nordea LifeAssuranceFinlandLtd Nordea

Aberdeen StandardInvestments Aberdeen pe nsion c Redito Property Investors Redito Property Sponda Plc(PolarBidco) Fennia Group andFunds Fennia Group o mp eQ RealEstateFunds CapMan RealEstate Wereldhave Finland a ICECAPITAL REAM SATO Corporation nies an Nordisk Renting Nordisk Mercada Ltd** Mercada Technopolis Plc Antilooppi Ky Kojamo Plc Citycon Plc d Logicor** AB Sagax OPfun Avara Ltd NREP NIAM Keva ds 0. 0 Non-listed property companies/funds Non-listedproperty Institutionalinvestors 0. 5 1.

0 1. Finnish public sector pension institutions operate under a under operate institutions pension sector public Finnish funds. pension specific industry or company smaller several are there addition, In /VER). (Valtion Eläkerahasto Fund Pension State the and Keva funds, pension major two are there sector, public Inthe of companies. number the reducing Ilmarinen, with merged of was 2018, Etera beginning of the As Veritas. and Elo Varma, Ilmarinen, companies: major four currently are There players. biggest the are companies insurance pension sector, pension private the In lower, 3.1%. at about clearly been has return the years, ten past the In years. 20 past inthe onaverage annum 4.4% to per amounted has investments institutions’ pension sector onprivate return real the TELA, to According level. original its to back increased be will expectation the which after 2026, 3% until to lowered been have expectations return the environment, investment challenging the to However, due investments. on return real of a3.5% annual assumption onthe based are flows money pension long-term on the Calculations investments. existing on on returns based currently is thus assets investment funds’ in pension increase The funds. existing from billion €3.6 and contributions annual from funded was billion in 2016, €22.4 out some paid of billion pensions of €26 amount total the Of contributions. of annual amount the than is now larger out paid being of pensions amount the pension insurance companies’ portfolios, the share of listed of listed share the portfolios, companies’ insurance pension sector private the In returns. investment higher slightly in resulting exposure, equity alarger have typically They allocations and strategies investment have different thus and institutions, sector private than framework solvency different 5 2. 0 International investors International companies Listedproperty Source: KTI(queryfor investors,pressreleases,annualreports) 2. 5 3. 0 3. 5 4. 0 4.5 5.0 4.5 . . of 2016. The majority of foreign investments are invested invested are investments of foreign majority of 2016. The end 5.5% the of some since 2017, a growth representing of quarter third of the end at billion the €3.8 to amounted investments property foreign investors’ Institutional Kiinteistöt). (Agore Elo and (Antilooppi) by, Ilmarinen established instance, for have been of structures kinds These partner. investment Swedish cases in many aforeign, have often they where companies, or funds established newly to held investments directly formerly their sold also have institutions many years recent In companies. and funds property domestic in many investors major are Institutions years. in recent increased has investments of indirect share The of 70%. share the with portfolios property domestic institutions’ the dominate billion, 5%, or investments in 2017.€0.6 domestic Direct by increased investments property of domestic amount absolute the years, several for decreased having After in Finland. invested are investments, property institutions’ of pension 77% majority,of some 2016. The end the from billion €0.8 by increased amount total The €16.2 to billion. amounted institutions pension of Finnish of 2017, investments quarter property of third the end At the respectively. VER, and lower, 3.9% Keva for and 6.2% significantly was investments of property share the portfolios, institutions’ pension sector 10.9%. to In public amounted portfolios companies’ insurance in pension share investments’ Property instruments. market money and in bonds invested were assets of the 38.2% Some investments. equity other or shares in listed invested were assets companies’ insurance of 2017, quarter pension of the 40.3% third of the end At the of 2017. quarter 42% third of the end at the VER 31.7%, 36% and over was was of that Keva while equities invested in 2017” in property ”10.9% of pension insurance companies’ assets were Investment of pension portfolios insurance companies 100 20 40 60 80 % 0 Loansreceivables Shares Shares l tr laie am eia Keva Veritas Varma Ilmarinen Etera Elo 10 31 40 12

Real estateinvestments 28 28 20 Bonds Other money market instruments anddeposits Othermoneymarketinstruments 36 45 12

Other investments to Nordika. Varma also acquired an office property in property office an acquired also Varma Nordika. to properties office three investor, and German unnamed an to properties residential seven Sagax, to properties industrial of 53 a portfolio example, selling, for by portfolio, its from of 2016). end the 2017, In of assets sales the continued Varma (€2.9 billion at billion €2.8 to amounted portfolio property of 2017, end At the years. domestic in recent Varma’s direct portfolio property its in restructuring active been Varma has billion. €45.4 of totals that Varma billion, whereas €45.9 totaled portfolios investment of their value market of 2017, end At the insured. of the combined the number or contribution pension annual by the measured in Finland fund pension sector private largest the became thereby which Ilmarinen, with merged of 2018, was Etera beginning At the managers. and partners investment their with together often assets, single in large typically investments, direct some made have Elo and Varma, Keva Ilmarinen, as such institutions, biggest the years inrecent Only vehicles. in indirect sell the properties during the coming years. years. coming the during properties the sell and develop to aim the with Catella to portfolio property office of an disposal and management the outsourced Varma of 2017. end at billion the €3.6 to 2018,amounted early In portfolio of Varma’s property value total The projects. redevelopment and built innewly both development in property investing continued and CBD, Helsinki the 22 45 17 8 Source: TheFinnishPension AllianceTELA ”Pension insurance companies companies ”Pension insurance Ilmarinen and Etera merged merged Etera and Ilmarinen investments is increasing increasing is investments in institutional property property institutional in ”The share of indirect ”The 32 37 12 portfolios” in 2018” in 33 43 32 3 The Finnish property investment market: volumes, structure and players 33 3 The Finnish property investment market: volumes, structure and players hotel property, which will be built in Tampere. It is also built be will which property, hotel Marriott Finnish first in the invest it will announced Keva In2017, investments. domestic direct are billion of these €2.4 Some billion. €3.3 to amounted investments property Keva’s of 2017, end at the and of inproperty, value invested total the are 6.2% of 2017. some assets, total quarter Keva’s Of third of the end at billion the €50.9 to amounted portfolio investment its sector; pension in the player biggest is the Keva of Finland. Church Lutheran Evangelical the and state the governments, local in the employed of people matters pension the handles Keva sector, pension public In the acquisitions. property and development new both through years inrecent portfolio property residential its increased has Elo institutions, pension other to the newly established properties company.retail Like 10 comprising portfolio a€160 sold Elo property million Trevian. company management and AP1 Swedish the with Ky together Kiinteistöt of Agore 2017 establishment the was in portfolio in Elo’s event major One in property. invested 12.3% of 2017. some end were assets, investment Elo’s Of of €23.1 billion at the portfolio investment atotal with is Elo company insurance pension sector private largest third The Etera. by owned formerly was property €190 This million. of some aprice for CBD in Helsinki of KPMG property office head of the sale the published 2018, early In Ilmarinen €1.2 and billion, respectively. €4.5 to amounted investments of 2017, property Etera’s and quarter third Ilmarinen’s of the end At the properties. commercial and in residential both projects in development investments through portfolio its increasing in 2019. is also completion for Etera scheduled is of which Tripla Mall in the project, investors of the one in 2018, is Ilmarinen with merged which Etera, US. the in investments estate inreal York onco-operation Life New with agreement apartnership made also company The Manchester. and Berlin inAmsterdam, properties office in large investing structures joint venture entering by portfolio property foreign its expanding continued in late 2018. completion 2017, In for is due which Ilmarinen centre, shopping Redi in the investors of the one is also Ilmarinen assets. of existing redevelopment and construction inresidential investments domestic new its concentrates mainly company The years. two past in the in Finland transactions in property active been not has Ilmarinen Real estate exposure of the Finnish institutions 13.1% 4.6% Total valueca.EUR22.9bn 2017 12.7% 69.6% Source: KTI(queryfor investors,annualreports,KTIestimates) domesticinvestments Indirect Indirect foreign investments foreign Indirect investments foreign Direct domesticinvestments Direct leverage in their investments. In2014, however, investments. anew in their leverage use to allowed typically not are funds pension Finnish interface. tenant of their control retain to want they as teams, management property and asset in-house have also institutions Many kept in-house. are functions management portfolio thus and themselves, by institutions made are decisions investment that requires legislation Finnish in property. invest also these All Pension Fund. Seafarer’s the and Eläkekassa Apteekkien Valion Eläkekassa, Pension Fund, Group Bank OP include of players kind of this Examples sector. industry one or company of one matters pension the in managing specialized are which providers, pension smaller some are there players, major these to addition In investments. property direct making from them prevent statutes fund’s The portfolio. total the 3.9% of represented quarter third of the end at the which investments, property on indirect solely 2017. focuses VER of of €19.1portfolio quarter third of the end at billion the investment an managing was VER Pension Fund State The cities. Swedish in secondary centres shopping smallish In 2017, in Sweden. three acquired properties Keva inretail investments direct some made has Keva years, recent In in funds. is invested majority vast the holdings, property billion foreign in 2019. completion for €0.8 is Keva’s due Of which of Ramboll, office head sqm 20,000 in the investor according to the Federation of Finnish Financial Services FFI. FFI. Services Financial of Finnish Federation the to according €12 some to billion, amounted investments Total property €15 to companies billion. that of insurance and billion €22 to amounted companies insurance of life of investments amount of 2016, end At the total the institutions. pension of those than smaller however, are, markedly portfolios investment Their companies. insurance and insurance life i in Finland investors property institutional Other development. residential in investments their increased have and opportunity this used have institutions of the Many cities. main in the property residential of rental supply the enhance is to legislation of this purpose The 2022. until 50% to up investments property residential their leverage can companies insurance pension whereby introduced, was legislation temporary nclude nclude House (€46 million).House (€48 million) Investors and REIT 2017), Residential Orava €185 (market value of end at million the Hoivatilat Suomen include companies smaller Other billion, respectively. €0.7 of €1.9 values and market with companies property listed largest two the currently Technopolis and are Citycon 2016). of (€4.1 billion at €2.9 at end billion the stood exchange stock Helsinki Nasdaq in the value market combined 2016. Their of end at billion the €6.9 some to amounted billion, having at €3.0 stood companies property listed of the holdings of 2017, end At the Polar Bidco. property Finnish the Blackstone’s by company of the acquisition the following Sponda company largest of the 2017 delisting the to due in markedly decreased sector property listed Finnish The sector Listed property investors. main are clients institutional 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, financial main of the Some insurance. Life Aktia and Life Fennia include in property investing insurers life Other Group. LocalTapiola and Group Sampo Nordea, Group, OP institutions financial large the by managed are companies insurance and insurance life biggest The agreements. capitalisation called so through clients their to opportunities investment offer also They corporations. and individuals private both to insurances pension voluntary well as as insurances life offer companies insurance Life

Photo: SATO / Aki Rask ”The Finnish”The listed property sector decreased insector decreased 2017 through the delisting of Sponda” owned by Ilmarinen. Ilmarinen. by owned inOslo, formerly campus of Technopolis Fornebu share minority the bought Tampere. It also in central campus office in anew million €46 some invest it will announced 2017, In in Finland. located €891 are million company the (€1.6billion of 2016), end at billion the some of these, and €1.5 to amounted portfolio of Technopolis’ property value in 2017.in 2016 Jyväskylä and of 2017, end At the fair the in Lappeenranta holdings its disposed having after Finland, in in 6cities operates currently company The Lithuania. and Estonia Norway, Russia, Sweden, in Finland, campuses park of business achain manages and Technopolis develops owns, apartments. 550 well residential as as space, of leasable sqm 42,000 some comprise to in Espoo centre Lippu the extending and reconstructing is currently Citycon Management. Capital €167 Cerberus to million of some price atotal for centres shopping Finnish core non- 2017, In sqm. five of 101,000 area divested Citycon leasable agross with centres, shopping company’s of the largest is the in Espoo Omena Iso centre shopping The portfolio. total of Citycon’s 37% value of the some represent holdings Finnish The inFinland. 13 located of which are centres, shopping 49 owns currently company the total, of 2017. end at billion the €4.2 to close was In portfolio property of Citycon’s value The countries. Baltic and Nordic in the management and development investment, centre in shopping specialising company is a property Citycon some 1,700 rental residential dwellings. residential rental 1,700 some (€211million of 2016). owns end at the million company The at €203 stood 2017, portfolio company’s of the value fair the of quarter third of the end At 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 exchange. stock Helsinki Nasdaq in the performance share 11%of some overall the to in 2017. close very was This increase showed an index price Sector Estate Real OMX The laiva laiva 34 3 The Finnish property investment market: volumes, structure and players 35 3 The Finnish property investment market: volumes, structure and players (index 7/2000=100) Index Estate Real Helsinki OMX and Index Helsinki OMX companies property of FinnishShare performance listed year of end the at values Market companies property Market values of the Finnish listed and thus became the largest shareholder of the company. of the shareholder largest the became thus and Trust, Investment Estate Real Residential of Orava shares of 2017. 25.2% of the In2017, acquired House Investors quarter third of the end at the million €54 some to amounted portfolio property company’s of the value total The area. metropolitan Helsinki the outside mainly properties commercial and inresidential invests House Investors (€155 million €250 in 2016). million at some stood portfolio property company’s of the value in 2017. exchange stock Helsinki of 2017, end At the fair the in 2016 of Nasdaq list main in the and marketplace North First inthe listed was company The operators. service sector private and municipalities both include tenants company’s The blocks. service extensive more and centres care day children’s homes, nursing including properties, care out leasing and in developing is specialised Hoivatilat Suomen 100 200 300 400 500 600 1,000 1,500 2,000 2,500 EUR million 0 500

2000 0 OMX HelsinkiRealEstateIndex

2001 Technopolis Plc Citycon Plc

2002 OMX HelsinkiIndex 2013 2003 2004

2005 2014 2006

2007 2015 Hoivatilat Residential REIT House 2008 Suomen OravaInvestors 2009 Source: NASDAQOMXHelsinki 2010 2016 2011 2012 2017 Source: NasdaqOMX 2013 2014 2015 2016 2017 Property assets under management, EUR billion billion EUR management, under assets Property Finland in investors property holdingsDirect of property 10 biggest lease. SATO along-term with from properties the rents Oy. Forenom Forenom to renting short-term for dwellings 195 2018, comprising concept, SATO HotelHome its sold early In acquisitions. major any make not did company the €156 some to in 2016, Unlike million. amounted investments 2017, In Elo. company insurance SATO’s pension Finnish and APG fund pension Dutch the include shareholders 55% major company. −of the –almost Other majority the owns Balder Swedish The in Russia. investments new any from abstain it will being time the that for announced has company The Russia. 3% Petersburg, in St some and Finland in 18% cities major area, in other metropolitan Helsinki the in is located portfolio of the of 2016). end the majority The (€ billion €3.6 at billion 3.4 at nearly stood portfolio property of 2017, end At the of SATO’s value apartments. fair the 26,000 almost comprise holdings SATO’s current in main Finnish cities from OP Group’s funds. funds. Group’s OP from cities Finnish in main located dwellings of 981 residential aportfolio purchase it will that 2018, announced early In Kojamo Lumo. brand housing the under dwellings onmarket-based only focuses currently company The organisations. market labour Finnish major some well Varma, as as and Ilmarinen include shareholders of 2017 end at the of 2016). (€4.3 end at billion the Kojamo’s billion €4.7 to amounted portfolio property of its value fair the and in Finland, investor property largest is the Kojamo development. property through on investments concentrated in2016, now it has acquisitions major some made having in2017: operations its expand after to continued Kojamo dwellings. rental 34,000 some owns company, currently which residential rental sector private biggest is the Oyj Kojamo portfolios. in market operations their focused have rec but past, in the portfolios residential subsidised VVO), have held significant of which SATO each Avara, and (previously Kojamo properties: in residential investing companies property non-listed major three are There companies property Non-listed Sponda (PolarBidco) LocalTapiola Group Ilmarinen OP Group companies increasing are Kojamo Citycon Varma SATO Keva ”Residential property property ”Residential Elo 2017 01234 their portfolios” 2016 Source: KTI(queryforinvestors) EUR billion 5 ently ently

AP1 and Trevian Asset Management. The company focuses focuses company The Management. Trevian Asset and AP1 insurer pension Swedish Elo, the company insurance pension between joint venture founded is anewly Kiinteistöt Agore premises. in the tenant main is the Kesko Sweden. and in Finland properties 37 retail and centres shopping three comprises company the of portfolio property company. of the third The one owns company. the to Kesko portfolio property retail amajor sold Kesko in 2015, retailer Finnish the established when also was company Oy). The Kiinteistöt Ankkurikadun (formerly Oy of Mercada owners major also are AMF and Ilmarinen million. €700 exceeds currently portfolio property in 2017. of Antilooppi’s continued value it also total The which acquisitions, several through grown has company the foundation, its Since Pensionförsäkring. AMF Swedish the and Ilmarinen insurer pension Finnish the by is owned and in 2015 established was company The area. metropolitan Helsinki in the properties in office Ky invests Antilooppi portfolios. property funds’ pension of the restructurings of the aresult as founded been have companies of these Many years. in recent established been have companies smaller several addition, In Mercada. and Antilooppi include segment in this companies biggest The years. in recent expanded have properties commercial in investing companies property domestic Non-listed services. management investment well as as joint ventures, and co-investments funds, equity private through growth pursue also they strategy, current company’s the to company. in the According shareholder biggest the being Elo company insurance pension the with institutions, Finnish major are shareholders Avara’s cities. larger in the €1 concentrated of some billion, mainly worth atotal with apartments 7,900 rental some manages and owns Oy, investor, Avara currently residential large third The Photo: YIT on city centre retail and office properties in major cities cities inmajor properties office and retail centre on city specialised property investment companies. companies. investment property specialised domestic of other examples are Estate Real HYY and Renor sqm. 154,000 some comprises portfolio property company’s The in Kupittaa. located also hall, sports of amultipurpose in late 2017,and development the completed company the inKupittaa, properties educational in some invested also has Turku Technology Properti area. in the properties of office majority the owns company The area. Kupittaa in the located in Turku, mainly premises business managing and owning company estate is areal Turku Properties Technology portfolios. investment property their expanding currently all also are they but corporations, of the holdings the in redeveloping arole have companies these All corporations. Finnish of traditional arms investment of the examples are Oy Onvest and Invest Lindström Capital, Ahlström partners. investment their as Finland to investors foreign new brought company the cases, Inall portfolio. office an and apartments residential 3,000 than more centre, shopping one acquired and transactions several out it carried in 2016, when operations its started company The investors. international mainly for partner joint venture and operator alocal as is onacting of which focus company, primary the management asset and investment is an Partners Capital Avant Elo. from portfolio property retail a€160 million 2017, purchased summer Kiinteistöt Agore in foundation its Upon area. Helsinki the outside primarily ”New property investment property ”New companies being are established” es es 36 3 The Finnish property investment market: volumes, structure and players 37 3 The Finnish property investment market: volumes, structure and players almost €1.3almost billion. to amounted value portfolio property year,the total their in2017, acquisition of end at the and property through grow to continued funds Both properties. commercial in invests other the and properties in care is specialised funds of the One funds. investment estate real special two eQ Fund Management, subsidiary of eQ Bank, manages Tontit lots. Fennica in building and properties Toimitilat in commercial Fennica Iinvests funds. investment special both are funds Fennica Fennia’s funds. property as well as clients internal their for managed portfolios direct of 2017, end at billion the €2.5 the some both including to LocalTapiola amounted and OP both for management under assets property of Finnish value total The funds. debt or property in European investing structures of fund fund well as as market, property Finnish in the directly investing funds investment special end open and partnerships limited both manages Management Property OP strategies. varying with structures partnership limited are funds current LocalTapiola’s clients. other to opportunities investment fund offer also but investments property direct groups’ their manage who institutions, Finnish traditional are OP, Fennia and managers, LocalTapiola fund largest the Of Investments. Standard Aberdeen and Asset Management, CapMan Real Estate, Ålandsbanken Management, eQ Fund Management Company, Fennia Asset Property LocalTapiola Management, Property OP Group’s OP are companies management fund largest the management, under assets property by Finnish Measured strateg their affects significantly also which backgrounds, diverse have companies management fund property Finnish funds. in these invest also in particular, ones smaller the 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 years. in recent increased also has services management of investment supply the preferences, and strategies of investor development the Together with groups. investor various to offered products of kinds of different spectrum awide covers currently funds of property supply The years. past the during significantly increased has funds property of non-listed supply The companies management investment and Real fund estate expanding to co-investments and investment management management investment and ”Fund managers are are managers ”Fund services” ies. ies. Sirius Capital Partners and Titanium. ICECAPITAL Real Real ICECAPITAL Titanium. and Partners Capital Sirius Management, Trevian Asset ICECAPITAL, instance for include, companies management property Finnish Specialised of 2017. end at the million €800 some to amounted management under assets property Finnish Investments’ Standard Aberdeen total, In clients. of its onbehalf strategies investment alternative it executes addition, In portfolios. their in expanding funds Finnish its than active more been have years, in recent which, funds, property European its through in Finland invests also Aberdeen reorganized. management its and restructured recently was of which one funds, property Finnish three launched has which companies, investment largest world’s of the is one Investments Standard Aberdeen mandate. investment property residential Nordic BVK’s German the manages It also Fund. Income Property Nordic CapMan fund investment special first its launched CapMan In2017, areas. business of the is one investment property whom for company equity private aFinnish originally is in property, investing structures partnership limited Finnish three and Nordic one manages which CapMan, and 2 separate accounts. The company has 6 offices in Nordic in Nordic 6 offices has company The accounts. 2 separate and funds 4property managing is acompany Horizon Northern class. asset alternative an as clients their for funds property offer currently that companies banking investment of Finnish examples other Taaleri are and Auratum list. North First Helsinki’s inNasdaq listed is currently company The inproperty. investing funds investment special two managing company management is afund Titanium million. €800 to holdings property its increased company the of operations, years two first its During investors. institutional international are investors fund’s the All properties. daily-goods and store in grocery invest funds two Sirius’ basis. onadeal-by-deal investments co- makes and funds property manages that company management investment and is afund Partners Capital Sirius Trevian High-Yield Property. fund end open first their launched which AIFM, Funds 2017,In company, asister Trevian established Trevian also Park. Business of Spektri management and ownership the AP1, of Trevian, restructuring well and as as Elo venture a joint Kiinteistöt, Agore in establishing involvement the include activities Trevian’s recent structures. joint venture in manager or partner investment as acts well as as clients, its for investments estate real structures also company The years. in recent structures partnership limited several exited and company, founded has which management asset and investment estate real Trevian is a specialized period. exit is now inits fund This Petersburg. inSt properties inresidential investing fund one manages company the addition, In million. 400 to €45 from varying capitals total with properties, inresidential only investing all funds, estate real active five manages Management Asset Estate property funds is increasing” funds property ”The variety of the variety Finnish”The deal amounted to over €12 billion. Measured by space area, area, space by €12 over to Measured billion. amounted deal in the price transaction total The partners. investment its with together Corporation, Investment China by Logicor company property logistics European of the acquisition the by caused was inFinland investors property foreign largest of the dynamic overall in the change major Another 2018. in spring completion for in Tampere, scheduled Centre Shopping Ratina sqm 53,000 is the construction under currently project development significant most Sponda’s Tampere. and of Helsinki areas central inthe properties of 2017, centre shopping and office mainly comprising at billion end the €4 almost to amounted assets property Finnish Sponda’s inFinland. investor property foreign largest the Polar Bidco made Sponda, company property listed formerly of the Polar Bidco Blackstone’s by acquisition the market, property Finnish in the ever transaction largest The market. investment property Finnish total of 29% the some to share their increased investors year. Foreign previous the to compared 50% of some agrowth €18.5some represents billion, which to amounted investors property of foreign holdings total the in 2017, market year, of the end at the and, property Finnish in the role their increase to continued investors International partn operating local their with structures co-investment through market Finnish the entered have investors of foreign amount increasing an of years, couple past the In managers. asset local /or and offices Nordic their through operate others while in Finland, offices own their established have of them Many practices. management and strategies varying with of players group adiversified form investors Foreign International investors Tradeka. and Pension Fund State Varma, the of is ajoint venture VVT in Turku. centre shopping Hansa of the ownership the organise to established a fund manages also Exilion area. metropolitan Helsinki in the properties in office invested has fund their and funds, pension Finnish of four is ajoint venture 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 venture joint like or club-deal- as considered be can funds Finnish of the Many assets. of the dispose to amandate with portfolio office of Varma’s sqm 110,000 management the over 2018, took early In company the in Finland. portfolios investors’ international some that manages company 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 €141 for Evli by managed million. afund it to selling by fund II Healthcare its 2018, exited Inearly company the properties. in care predominantly invest funds estate real Their Berlin. and Petersburg in St. offices well as as countries Baltic and account for some 29% of the ”Foreign investors currently currently investors ”Foreign invested market” property ers. in Finland in recent years is Niam, who also continued to to continued also who is Niam, years in recent in Finland active been has that investor Swedish-originated Another million. €900 to amounted in Finland holdings year, of the end At the company’s the cities. Finnish largest the across properties logistics and of industrial acquisitions In 2017, years. severa made in recent Sagax portfolio Finnish its increased company, actively has investment property listed a Swedish Sagax, market. Finnish by the offered yields by higher attracted are investors Swedish opportunities, diversification and vicinity geographical to addition In in Finland. active be to continue investors Swedish Many portfolio. its in increasing active been not has Renting however, Nordisk years, recent In leases. long with investments insale-and-leaseback specializes company The in Finland. investor property foreign largest the years, many be, for to used Renting Nordisk Partners. Estate Real GLL manager and partner investment its with together portfolio property alogistics 2017, acquired investor Korean unnamed an when in market Finnish the entered investor Asian another Also in Finland. located are assets property 8% of Logicor’s some comprising some 49,000 sqm in Jyväskylä from Technopolis. from in Jyväskylä sqm 49,000 some comprising properties office nine secondly, it bought and Investment, Standard Aberdeen in Tampere from property office sqm in 2017: a40,000 acquisitions it firstly, acquired first its made company The cities. Finnish main in the properties in commercial investing company estate of areal Kielo, formation the announced Estate late 2017,In Real Brunswick in Helsinki. property office amajor acquiring by in Finland acquisitions first its made Fastigheter Skandia partner. Blackstone’s as transaction Sponda in the involved also was AREIM transactions. in two in Helsinki properties office three purchased fund AREIM’s market. Finnish the entered In 2017, investors Swedish new other several Hemsö and Hemfosa. Properties, Alma Genesta, instance, for include, Finland in investors Swedish-originated Other million. €500 than more worth portfolio aFinnish −has Balder Swedish the and Varma by owned currently Properties, Serena well as as −Trophi, AP3, by in Finland is owned which portfolios two manages who of Redito, 2017. Swedish-originated the Also end at million the €700 over to amounted in Finland assets Niam’s years. in many in Finland acquisition first their made thereby who Fund, Estate Real Nordic Schroders to Helsinki in properties office of nine aportfolio sold Niam transaction, in 2017. properties largest Inthe acquire of and dispose both ”Several new foreign investors”Several entered the Finnish market in ”Many Swedish investors are active in Finland” in active 2017” l l

38 3 The Finnish property investment market: volumes, structure and players 39 3 The Finnish property investment market: volumes, structure and players Largest direct property transactions of foreignLargest direct players property in Finland in 20 Finnish residential market by acquiring some 300 dwellings. dwellings. 300 some acquiring by market residential Finnish the to investor German unnamed an brought also Barings transactions. in three dwellings 1100 than more residential acquired Managers Investment AXA by managed a fund In2017, investors. US some by also and NREP Danish BVK, German the by made transactions significant some were in 2016 only but time, some for market property residential Finnish in the interested been have investors Foreign Finland. in acquisition first its made also fund M&G’s investors. of these both for inFinland investment first –the CBD Helsinki in the property office built newly amajor acquired Assurances CNP French the Togethermillion. Hines, with €167 for Citycon from centres shopping five acquired who Partners, Capital is Cerberus market Finnish in the player new significant Another million. €250 some for Barings from centre shopping Kamppi of the 50% acquired Fund Cities in 2017. European market Finnish Estate’s Real TH the entered investors foreign new other several addition, In Logicor (77 properties in Finland) Finland) in (77 properties Logicor properties properties centre postal and 5 logistics Office property, Kasarmikatu 21 Kasarmikatu property, Office Shopping centre Skanssi Skanssi centre Shopping tim (in published not is price the where transactions significant Other Nine office properties properties office Nine Nine office properties properties office Nine rental apartments) apartments) rental (909 22 residential properties Espoon Keilalahden ABCD-talot) Keilalahden ABCD-talot) Espoon Oy (Kiinteistö property Office Jyväskylän Forum) Forum) Jyväskylän and Ostari Martinlaakson Ostari, Myllypuron Tikkuri, (Espoontori, centres Shopping Five Shopping centre Kamppi (50 %) (50 Kamppi centre Shopping Sponda Oyj Oyj Sponda ASSET /PORTFOLIO ASSET first investmentsfirst in Finland in Capital Partners madeCapital their Partners Assurances and Cerberus and Cerberus Assurances ”TH Real Estate, CNP ”TH 2017” 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q4 2017Q3 2017Q3 2017Q3 2017Q3 2017Q2 2017Q2 2017Q3 2017Q3 2017Q3 2017Q3 2017Q1 2017Q1 DATE PRICE (M€) (M€) PRICE > 250 European Cities Fund Fund Cities European > 250 3,700 Polar Bidco S.à r.l. S.à (owned Bidco Polar 3,700 130 Fund managed by AXA IM IM AXA by managed Fund 130 150 Schroder Nordic Real Real Nordic Schroder 150 164 164 105 105 167 167 n/a n/a n/a CNP Assurances, Hines Hines Assurances, CNP n/a n/a of companies. kinds of these examples Trevian are and Partners Capital Avant years. in recent increased also have services management investment offering companies players and foreign with co-investors as acting companies market, Finnish the into capital international channel to serve that companies these with Along investors. foreign mostly have vehicles Sirius’ and CapMan’s instance, for funds, non-listed Finnish the Of Mercada. and Antilooppi SATO, instance, for include, ownership foreign significant with companies large Logicor, and Sponda to addition In in Finland. office an has also who Patrizia, company management fund German another by acquired 2017. recently was TRIUVA in late in Helsinki acquisition an made TRIUVA company management fund German €164 some Also for million. Exilion from Espoo, in Keilaniemi, property office large a acquiring by years some after in Finland investment an made also Management Asset Deutsche Ilmarinen. from CBD in Helsinki property a€190 office million acquiring by portfolio Finnish its 2018, increased Inearly Deka Deka. and Investment Union are of these largest The market. Finnis in the players major are investors German Many e order) investors (GLL Real Estate Estate Real (GLL investors CBRE European Shopping (managed by TH Real Real TH by (managed by funds advised by by advised funds by Blackstone Group) Management, L.P. Fund managed by by managed Fund China Investment Unnamed Korean Cerberus Capital Capital Cerberus Deutsche Asset Centre Fund II II Fund Centre – Real Assets Assets – Real Management PURCHASER Estate Fund Estate Corporation Partners) Kielo AB Technopolis Oyj Oyj Technopolis AB Kielo Estate) YIT, Ahlström Capital, HGR (managed by Barings Real Real Barings by (managed Shareholders of Sponda Sponda of Shareholders managed by Blackstone Blackstone by managed Ness, Risan & Partners &Partners Risan Ness, Exilion Real Estate IKy Estate Real Exilion 17 Nordic Retail Fund Fund Retail Nordic Real estate funds funds estate Real Property Partners Partners Property CapMan RE II Ky II RE CapMan Estate Advisers) Advisers) Estate Citycon Oyj Oyj Citycon SELLER NIAM NIAM n/a Oyj Oyj Source: KTI h space usage and ownership. ownership. and usage space in practices new for municipalities the drive aservice” as like “school concepts new Also 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 of new proportion abig instance, For ownership. property impacts also which provision, service in their strategies varying more apply to started have municipalities years, recent In provision. service municipal the for used properties are rest the and properties €13 some these, Of billion. residential at billion are €68 estimated was value technical current their €32 billion, and some to amounted municipalities Finnish of the holdings property of the value book current study, the In a recent at low-income households. targeted mainly therefore and state by is subsidized of which majority the properties, of residential amount asignificant own also municipalities th subsidiaries, their Through buildings. cultural well as as centres healthcare and nurseries schools, offices, as such provision, service and administration public for required of properties majority the own typically municipalities Finnish campuses. onits organisations education other and corporations private to increasingly premises offers also of Finland Properties company.this University in shareholder aminority is also state Finnish The Finland. across 10 the to universities spread ownership its with base, shareholder abroader has Ltd, of Finland Properties company, third University The tenants. other by used be also will of premises amount increasing an where inOtaniemi, area campus inits project development amajor manages currently Properties University Aalto themselves. universities the by owned are companies these 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 of Finnish majority The €100 million. some to amounted have sales annual its years, recent In term. long in the agencies by state needed not that are of properties dispose and/or develop is to purpose whose unit a business has Properties Senate Properties. Senate by sold be to space of amounts significant free thus would which efficiency, in space increase at ambitious an aim that will strategy workplace anew 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 the of control the under operates Properties Senate markets. private the from agencies state for rented premises of the agreements rental the manages It Army. also Finnish the by used properties well as as buildings cultural and prisons ministries, and agencies state by used of offices consists portfolio sqm million 6.2 2016. diversified Its at year-end billion €4.4 of some portfolio aproperty has Properties Senate investors. property sector private and agencie 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 e s s vacant. The potential compensations for municipalities for for municipalities for compensations potential The vacant. left be probably will services healthcare for used currently properties of municipalities’ proportion Some term. longer a for provision service for needed be will premises which define, will counties the which after years, of three period minimum the for rented be will premises All municipalities. from counties by rented be will premises 6,600 some rest, The counties. the by owned be will company the future, the In in 2020. Management) Estate Real and Facilities for Centre Service (the Oy Counties’ Tilakeskus Maakuntien company property established anewly to transferred be will of municipalities federations by owned properties hospital of large sqm 3.5 of some ownership the these, Of properties. of healthcare sqm 9.5 million currently own of municipalities federations and municipalities total, In issues. ownership onproperty impact significant a have will services healthcare and in social reform The of it. parts or portfolios property of municipal ownership in the common more become have structur company liability limited normal years, In recent municipality. the by directly owned be also might Properties sheet. balance aseparate into properties the separate to t enables which structure, enterprise public in a specific ownership property their organise often quite Municipalities corporations’ evolving property ownership and management management and ownership property evolving corporations’ of execution the enabled has market finance and investment property of the development and broadening The corporations. industrial Finnish the by owned is still 80%, than more stock, total of the majority vast the sector, industrial in the Only investors. professional by owned often very also are properties retail Large investors. by owned is currently stock property office Finnish the of 80% than More in particular. markets in office common less is becoming past, in the common very be to used which Owner-occupation, years. past the during markedly changed has markets property in the occupiers of property role The Corporations dwellings. state-subsidised 48,500 some owns which Heka, company property residential its through in Finland landlord single largest is the instance, for of Helsinki, €10 City over 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 defined. be to yet are vacancy increasing by caused losses financial the Finnish stock office is owned service provisionservice has amajor ”The reform in healthcare”The by professional investors” professional by impact on municipalities’ on municipalities’ impact ”More than”More 80% of the properties” hem hem es es 40 3 The Finnish property investment market: volumes, structure and players 41 3 The Finnish property investment market: volumes, structure and players corporations. and investors property international and domestic both for services valuation and advisory management, estate real of spectrum awide offers Newsec sector. management property and asset in the player major is another group, Stronghold- Swedish-originated of the part Newsec, investors. institutional among and management property incommercial position its at strengthening it aims acquisitions these through and firms, management domestic of smaller acquisitions several through expanded has Management Realia years, recent In services. advisory well as as valuation management, property commercial for services management offers also and portfolios, residential investors’ major some manages Group, of the company affiliate another Management, Altor. Realia firm equity private Nordic by the owned is currently group The markets. management and brokerage property residential in the player amajor companies, daughter its is, through Group Realia Finland. International Colliers brand the under operates 2018 currently early and in Colliers by acquired was Ovenia company major third The Newsec. and Management Realia are investors foreign and institutional large the servicing companies largest two 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 Companies premises. office other and headquarters their renting are they even cases inmost currently but properties, production their own typically still companies Industrial in Espoo. use headquarter its for property office of an redevelopment the well as as of stores in 2017 and acouple it completed in Järvenpää, centre logistics amajor developing is currently Lidl centres. inshopping located of stores exception the with inFinland, properties its owns typically Lidl chain retail German The years. inrecent investors to properties its in selling active been has in particular Elanto HOK- SGroup, within co-operatives the Of area. Kalasatama in the Kesko for property office head anew developing is Varma currently and use, residential for mostly redeveloped be to office head former its sold It also in Helsinki. centre shopping Easton of the phase sqm 20,000 first, the completed In2017, investment. and development Kesko property retail the in player amajor remains it still but deals, sale-and-leaseback major through holdings its decreased has Kesko years, recent In market. property inthe players active been traditionally have chains, retail Finnish major two Kesko, the and S Group leases. long relatively through buildings in these tenants as remained companies the cases, of these in many and, holdings property existing their sold also have corporations Finnish major several of years, couple past the During developers. or investors professional by developed −are in particular properties – office properties new of the Most strategies. they currently also manage several property 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 of management examples are Management Property OP and Management Asset Property LocalTapiola services. management centre shopping well as as corporations, to services management facility and property offers also CBRE CBRE. to Nordics in the services administration and accounting management, property its outsourced Aberdeen when started were services The in Finland. services management property and asset offers currently also CBRE firms, service estate real global the Of development services. property retail its for well known is also and in Finland, providers service management centre shopping leading the Oy, of is one which is Realprojekti Finland International of Colliers company affiliate Another years. in recent acquisitions company through sector management housing the into Oy, expanded has Isännöinti which Ovenia through offered are services management Housing corporations. well as as investors international and Finnish major include clients management property and asset property commercial company’s The properties. centre shopping and its operations in Finland rapidly in recent years. years. in recent rapidly in Finland operations its increased has CBRE Also agreement. apartnership through in Finland &Wakefield is represented Cushman services. brokerage and consultancy leasing valuation, transactions, in players major of the is one JLL in Finland. represented well currently are firms service property international Major market. Finnish the for services new adapt it that will announced also International Colliers of Ovenia, acquisition the Upon services. transaction and advisory valuation, offer also Management Realia and 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 valuation and 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 by offered are occupiers to services management Facilities management. services onproperty solely concentrating of acompany example is another Management Service Coor investors. domestic for working mainly company service management property Finnish traditional of a example is an Oy J. Juhola Kiinteistömanagement management and development for commercial, residential residential commercial, for development and management property for services offers Finland International Colliers

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 of finance. sources other or banks to compared competitive not are requirements yield their low, rather as remained has institutions by provided of debt however, volume the 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 clients. international major their with together Finland to come typically They in Finland. deals major some have financed Stanley Morgan and America of Bank Lynch, Merrill as such banks, international Large 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 SEB. and Bank Danske Group, OP Bank, Nordea including banks, Nordic and local major the by provided is financing estate of real part major The well available. is typically finance property conditions, market current In financing Property well. as in Finland services specific estate real offer PwC, and EY KPMG, as such firms, consultancy business Global in Finland. unit estate areal has also Finance Corporate Enskilda SEB Leimdörfer). (formerly Estate Real Brunswick advisor Swedish-originated the and Aventum Finance, Corporate Advium including companies, Nordic and domestic some by offered are services finance corporate firms, services transaction actual the to In addition investors. international and Finnish both with working companies of domestic examples are Ecorum and Oy mrec Partners, Property Finnish sector, services transactions Inthe firm. advisory and valuation property Finnish is another Property GEM 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 finance large transactions of ”Major international banks ”Global advisory firms are are ”Global firms advisory well represented in the foreign investors” investors” foreign Finnish market” Major banks are typically interested in financing rather rather infinancing interested typically are banks Major of Tripla Mall the for project. financing provided also banks, commercial some and NIB with together has, EIB buildings. energy zero nearly of new development the for Bank Investment European the from financing received have SATO both Kojamo example, and For financing. institutions’ special to access have also investors property Some debt. bank its refinance to bond secured a€175 issued million Mercada investor property retail and centre shopping when market bond the entered player new in 2017. bonds new issued 2017, In Citycon and Kojamo a companies, major the Of unsecured. currently are bonds the of majority The financing. of bond terms and availability the improve to in order ratings credit SATO acquired also have and Citycon financing. in their bonds SATOand use also Kojamo companies investment Residential bonds. in issuing active most been recently has Citycon companies, listed the Of sheets. balance their financing for bonds corporate use currently companies property Finnish biggest the equity, to access good arelatively to addition In of finance. sources several to access have investors property biggest The subsequent realisation of plots and developed properties. properties. developed and of plots realisation subsequent and ownership the and projects development major the financing for is responsible unit properties Partnerships and management, project and construction property commercial for is responsible segment Premises Business company’s new The properties. commercial and residential both builds and develops company The in 11 countries. people 10,000 employs YIT new company. The construction European North significant and Finnish largest the as stands currently company the and merged Lemminkäinen and YIT 2018, InFebruary investors. international and domestic both with cooperated have and years in recent field in this active been have all companies SRV Peab. and These YIT, Hartela, Skanska, NCC, include development property commercial in involved companies construction Nordic and Finnish them. redevelop to order properti buy also market in the players established newly some years, recent In 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 construction by dominated is market development property commercial Finnish The development Property obligations. its fulfill to is able not borrower original ifthe properties the of management the over take to able be typically would investors These return. ahigher for inreturn risk higher accept to able sometimes also are investors institutional and investors equity private Some Bank. is Collector of player of kind this example One risk. more accept to willing that are institutions financing or banks smaller some for opportunities new up opened has This transactions. complicated more or riskier for financing get to difficult more it is sometimes Therefore, clients. known with low-risk investments large, ”Sources for property finance for property ”Sources are expanding” are es in es

42 3 The Finnish property investment market: volumes, structure and players 43 3 The Finnish property investment market: volumes, structure and players Bonds issued investors by the Finnish property in Pitäjänmäki. Garden Business Ultimes of its phase second the started just has Peab Invest in Leppävaara. office head new Ramboll’s and in Pasila Asema Ilmalan include currently projects main Hartela’s Helsinki. in Pasila, Tripla major the project is developing YIT projects. current of SRV’s largest the are inKalasatama projects other and centre shopping REDI The in Vallila. park business Fredriksberg of the phase first the developing currently is also Development Property NCC provision. service its for centre in the premises rent of to Vantaa is planning City The in Vantaa. centre shopping Kivistö of the phase sqm 35,000 first, the start to planning also are NCC and Skanska in Helsinki. area in Telakkaranta ECHA Agency Chemicals European to leased building office an of construction the start to about is also CDF Skanska area. airport inHelsinki of Aviabulevardi phase second the and in Sörnäinen property office K6 include projects ongoing major CDF’s Skanska it develops. buildings in the investor an as remain also can which Nordic, Development Property Commercial Skanska through Nordics the in operations development its organised has Skanska in Pasila. Tripla is the unit inthis project underway project largest The Orava Asuntorahasto Asuntorahasto Orava Citycon Citycon ISSUED BY ISSUE DATE ISSUE BY ISSUED Sponda Technopolis Technopolis Citycon Citycon SATO Citycon Citycon Citycon Citycon SATO SATO Citycon Citycon VVO (now Kojamo) (now Kojamo) VVO Kojamo Kojamo Citycon Citycon Mercada ”YIT and Lemminkäinen ”YIT ”Property development development ”Property is active in Helsinki metropolitan area” metropolitan merged in 2018” 24.10.2017 17.10.2016 28.5.2015 28.5.2015 0521 20.5.2020 20.5.2015 24.3.2016 24.3.2016 16.9.2015 1.10.2014 1.10.2014 10.9.2015 10.9.2015 2921 22.9.2025 22.9.2017 19.6.2017 19.6.2017 1.4.2015 1.4.2020 1.4.2020 1.4.2015 1.9.2015 1.9.2025 1.9.2025 1.9.2015 1.9.2015 1.9.2015 8.9.2016 8.9.2016 MATURITY DATE MATURITY 24.10.2022 17.10.2023 17.10.2023 28.5.2020 24.3.2021 24.3.2021 16.9.2022 10.9.2020 1.10.2024 1.10.2024 19.6.2024 19.6.2024 1.3.2021 1.3.2021 8.9.2026 YEARS 5.5 5.5 10 10 10 10 10 10 5 20 20 5 5 5 150 150 5 5 300 300 5 7 300 300 7 5 300 300 5 7 200 200 7 8 1.0 bn NOK NOK 1.0 bn 8 5 7 500 1.50% 1.50% 500 7 In recent years in particular, construction companies have have companies construction in particular, years recent In of plots. amount hold asignificant and buy typically and properties residential develop also companies of these All of premises also available to be rented by other tenants. tenants. other by rented be to available also of premises plenty with Kesko, but to rented be will building sqm 35,000 of the majority The in Varma Kalasatama. by developed being project is, however, office amajor there moment At the projects. in development occupiers with directly together work also may Institutions developer. main the with risk development the share company, thus developing the they and in shareholders as investors institutional are there example, Tripla, and for REDI both In pre-let. are premises of the majority the when aproject enter only typically institutions companies, construction by led inprojects instance, For development. property commercial concerning strategies conservative quite have traditionally investors Institutional use. own its for properties develop to continues Lidl Also country. of the parts in various underway projects renovation development hotel property and retail have several also in 2013−2018. co-operatives local its and SGroup phases in several developed is being which in Sipoo, centre logistics Freeway sqm 193,000 is the project development largest SGroup’s area. metropolitan Helsinki the outside construction under projects smaller several has also Kesko yet. made been hasn’t decision investment final the but phase, by asecond extended be to is planned centre The inItäkeskus. project centre shopping Helsinki Easton of the phase sqm 26,000 first, the completed just Kesko developers. property professional and significant –are in particular Kesko, and SGroup retailers –large owner-occupiers Some for homebuyers. develop apartments mostly who players, local smaller typically numerous, also are there sector, development property residential In the homebuyers. to directly sold be to properties residential develop also They funds. property often most investors, to sell they which projects, development inhousing active been EUR MILLION 1.25 bn NOK 3 m NIBOR + 3mNIBOR NOK bn 1.25 1.4 bn NOK NOK bn 1.4 350 2.50% 2.50% 350 350 350 175 175 175 175 INTEREST ANNUAL ANNUAL 1.625% 1.625% 2.375% 2.375% 1.875% 1.875% 2.375% 2.375% 2.375% 2.375% 3.90% 1.55% 1.55% 4.25% 4.25% 2.25% 2.25% 1.25% 1.25% 3.75% 3.75% 2.75% 2.75% Source: Press releases Press Source: INFORMATION Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Secured Secured Secured Secured Secured Secured OTHER OTHER and and developers. property active also are SATO and in particular, Kojamo companies, residential inTampere. Large project office Technopolis’ inTampere and project centre shopping Ratina Sponda’s include companies of these 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 more pursue typically Institutions 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 properties. vacant for uses new for look instance, for can, they where portfolios, in their assets of existing redevelopment the emphasise strategies development Institutions’ ”Some niche”Some players emerging the redevelopment of existing in the property developmentin the property ”New players”New emerging for type developer by area inHelsinki metropolitan projects development Office properties” market” 100,000 150,000 200,000 250,000 50,000 sqm 0 area hasbeenestimatedbasedongrossinformation. onrentableareahasn’tIf information beenavailable, rentable 2007 2008 2009 2010 2011 201220132014 2015 2017 2016 Constructioncompany Investor has invested in some redevelopment projects. redevelopment in some invested has fund Exilion’s Also investment. and development property active also that are arms investment corporations’ Finnish of traditional examples are Capital Ahlström and Invest Lindström use. residential into often properties, existing redevelops that fund of aproperty example is an Auratum plot. onthe right building unused the exploit also and use, in office remain will which property, landmark this redevelop will Regenero Espoo. inKeilaniemi, property office head former is Fortum’s far so project largest Regenero’s locations. in good projects property large redevelop and Oy, invest is to of which aim the Regenero company development YIT, a property company construction with together founded, also has HGR CBD. Helsinki in the property of office amajor development the partners, investor some with together completed, recently use other some for redeveloped be to buildings in existing investing mainly development, estate on real focusing company investment estate real is another Partners Property HGR premises. of old industrial redevelopment o is Renor, concentrates example which One markets. niche in their development in property active funds and companies property non-listed smaller some also are There Helsinki CBD and will redevelop it into hotel use. it hotel into redevelop will and CBD Helsinki in property office an acquired Advisers Estate Real Barings Also use. hotel and residential for redeveloped be will which of Kesko, office head former in the invested NREP and Assets –Real Managers Investment AXA example, For use. a new into redevelop to planned are that in properties invested have investors international some also years, In recent User ”Foreign investors invest in in invest investors ”Foreign redevelopment projects” Source: KTI,RPTDocu Oy . HGR HGR in n 44 3 The Finnish property investment market: volumes, structure and players 45 4 Property sectors: market structure, practices and investment performance several years of sluggish development. development. of sluggish years several after positive now turned growth capital their as offices, by slightly outperformed was well, but perform to continued residential sectors, main the Of sectors. property of different performance in the differences significant were year, there but previous the to compared slightly increased growth Capital return. income properties’ office the of decline continuous well as as database, in the properties of weight residential increased the to due mainly decrease, to continued 2016, to income net the of 5.4%. Compared of 1.2% income anet and growth of acapital consisting in 2017 6.6% to (6.2% amounted in 2016), market property Finnish onthe return total the Index, KTI the to According stock. property invested 3% to total of the amounted properties of care share the of 2017, end At the properties. educational and healthcare instance, for including, properties, use public some also cover to expanded has market investment the years, 25%. In recent at stands market total of the share properties’ Retail billion. €1.6 by in2017, billion increased market €17.2investment to in the properties of office value total 27%, the and at some stand currently share offices’ properties, commercial the Of market. total of 29% the some represents billion, which at €18.5 stood market invested in the properties residential of value year, of the end At the total the values. in asset growth and development new both through increase to continued market 2017,In property residential invested the market. investment in the 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 inparticular properties of residential position the time, same At the decreased. has of offices share the sectors, in other base investor of the expansion and of offices performance investment weak to due years, recent In investors. by favoured most one the and market investment in the sector largest the clearly were 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 structure,market sectors: 4 Property ”The Finnish market”The property produced a total return of produced atotal return 6.6% in 2017” been around 46,000 sqm. sqm. 46,000 around been has of use changes through reduction average annual the period, same the During area. metropolitan Helsinki the in on average sqm 96,000 some to amounted have space office of new completions annual decade, Within past the Kuopio. and Lahti Jyväskylä, Tampere, Turku, cities: major Oulu, other in six is located 19% stock of the Another stock. total the 45% of some representing in Finland, market office the dominates area metropolitan Helsinki The metres. square 19.5 is some million in Finland space of office stock total The Stock market 4.1 office The total size EUR 63.7 EUR size bn total investment market by sector, structureThe of Finnish property sqm Distribution stock by location, of office Residential ■ ■ ■ Helsinkimetropolitanarea 29% Rest ofFinland Other majorcities Hotel 5% 37% Industrial Care 3% 8% Other 3% 19% Retail 25% Office 44% 27% Source: Statistics Finland Finland Statistics Source: Source: KTI Technopolis and Antilooppi. Foreign investors, for instance instance for investors, Foreign Technopolis Antilooppi. and Sponda, as such companies investment specialised well as as Keva, and Varma, Ilmarinen as such institutions Finnish large include sector office in the investors biggest The area. metropolitan Helsinki in the mainly connections, traffic good near located properties is business-park-type category office third The area. metropolitan Helsinki inthe areas other in some and CBD Helsinki in the both found be can These headquarters. company as typically used buildings is single-tenant category second The areas. office recognised a centres in city located typically buildings, office tenant is multi- stock office of investable proportion largest The sectors. of other growth the to due years in recent rapidly decreased has share their although portfolios, property institutional in Finnis role played a significant traditionally have Offices Players Jyväskylä. and Tampere, Oulu instance, for in, started be to about projects significant some are there However, construction. under was sqm 16,000 some only year-end, At the intotal. regions Lahti and Kuopio Jyväskylä, Tampere, in the Turku, completed Oulu, was space office low. remain 2017, In volumes of new sqm 33,000 some construction office area, metropolitan Helsinki the Outside area. metropolitan Helsinki in the areas in various construction under projects redevelopment major several also are There Vallila Leppävaara. and Sörnäinen, Ruoholahti, Kalasatama, including area, metropolitan Helsinki of the parts various in located are projects ongoing The construction. under was space office of new sqm 128,000 some year-end, inVallila. At the project reconstruction Group’s OP and in Pasila Asema Ilmalan in Otaniemi, project AGrid the 21 CBD, Helsinki in the Kasarmikatu instance, for include, projects completed largest The completed. being space in 2017, area of office sqm 87,000 some metropolitan with Helsinki inthe active remained construction Office 2008-2017 in area Helsinki metropolitan the in offices of Completions 100,000 150,000 200,000 250,000 300,000 sqm 50,000 0 If information onrentableareahasn’tIf information beenavailable, rentablearea has beenestimatedbasedongrossareainformation. 2008 Revelopment 09 00 01 21 03 21 05 06 2017 2016 2015 2014 2013 2012 2011 2010 2009 New nd nd h h three office buildings in Helsinki. buildings office three acquiring by market property Finnish the entered also III Fund AREIM’s Swedish The transactions. separate in two inJyväskylä 11 buildings office acquired who Kielo, Estate’s Real Brunswick by well as as Fund, Estate Real Nordic its for Niam from properties office nine acquired who Schroders, by, in Finland instance, for elsewhere and area metropolitan Helsinki in the both conducted were deals portfolio Major in 2017. market property office Finnish in the investments their increased investors foreign many markets, European other many to compared yields higher by Attracted in 2017. made also were properties office single major of some transactions well as as transactions, portfolio office significant other Several area. metropolitan Helsinki in the properties of office owner is amajor Sponda role, as important an played transaction Sponda the respect, this In billion. €4 in 2017, market exceeding volume total transactions with the in sector largest the of years, acouple after were, Offices properties. office in Finnish investments significant have also Investment, Union and Immobilien Deka Niam, from Ilmarinen (formerly owned by Etera) for €190 for Etera) by million. owned (formerly Ilmarinen from CBD Helsinki in the property headquarters KPMG the purchased Immobilien Deka 2018, German early the when in conducted was ever in Finland transaction office asset single largest in Tampere. The property office in Valtatie 30 invested Tower AB Kielo and in Keilaniemi, Fortum called so the acquired Regenero in Finland. acquisition first Fastighet’s Skandia was which inRuoholahti, property office an well as as Hines, with together Assurances CNP by bought building 21 Kasarmikatu fund, Management’s Asset Deutsche by acquired in Keilalahti headquarters Nokia former the in 2017 comprised transactions office asset single Large ”Foreign investors”Foreign increased their investments in Finnish Source: KTI,RPTDocu Oy offices inoffices 2017” 46 4 Property sectors: market structure, practices and investment performance 47 4 Property sectors: market structure, practices and investment performance cleaning, catering, postal services and meeting facilities. facilities. meeting and services postal catering, cleaning, security, reception, supply, as such service extensive an 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. and tenant the both for applies period same the and months, twelve or six three, are periods Typical notice buildings. office tenant inmulti- applied commonly are terms lease Indefinite building. of the characteristics and location the on month, depending per metre square per €5.50 and €4.50 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 properties in primeproperties locations ”Large, high-quality”Large, office attract investors” attract rates remain high and rents are pressured. are rents and high remain rates vacancy areas, secondary in the whereas tenants, attracting continue areas inprime premises best The increased. have areas office secondary and of prime performance rental in the differences the years, past the During offices – market Rental insignificant. is, rather however, still stock office total of the share Their Varma. and Teknologiakiinteistöt Turun Technopolis, by, Sponda, instance, offered for currently are concepts of space kinds These contracts. flexible very with 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 need the 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 ”Office rental markets”Office turned ”The supply of”The co-working concepts is increasing” is concepts more positive in 2017”

Photo: Skanska / © 2017, Kuvatoimisto Kuvio Oy take-up remained stable at some 300,000 sqm. sqm. 300,000 at some stable remained take-up Gross sqm. 42,000 some by increased space office occupied in 2017, positive of was amount total the and of offices up take- net outlook, economic improving the by Supported 10 11% and between vary rates vacancy office Jyväskylä, and Lahti year. In Oulu, past the within decreased has rate vacancy the increased, has demand as and low, been have construction of new Turku,In volumes the Catella. to at 14.8%, according area metropolitan Helsinki in Tampere in 2017, in the than higher is now even and increased rate vacancy the cities, main 82%. other the Of at some stood portfolios investors’ of large rates occupancy the database, rental KTI Inthe 13.4%, Catella. to according of some rate of 2017, end at the avacancy representing space 1.15 office some were of vacant sqm million there area; metropolitan Helsinki in the high remains of offices in2017, aslight improvement rate Despite vacancy the in Espoo. Keilaniemi and inHelsinki Kalasatama instance, for include, development rental positive with areas best The question. in asset individual of the characteristics and location micro onthe is dependent performance areas, office most In 2017. 85% at some in September standing rate occupancy KTI the with space, office of vacant is plenty there CBD, month (€31 in 2016). sqm per However, Helsinki in the even per sqm €35 per oflevel almost all-time-high an reaching quartile upper the with increase, to continued in particular Top index. rents rental KTI the to according annum, per 3.5% some to accelerated CBD Helsinki in the rents in office increase the positive, more turned outlook economic the as In 2017, of years. couple past the during conditions economic challenging inthe also resilience its proven has and Finland, in area office appreciated most is the CBD Helsinki The ”Occupiers’ space preferences preferences space ”Occupiers’ are driven by driven and efficiency are an Office Office 100 70 75 80 85 90 95 d % whole Finland whole quality”

2005 oc cupancy rate cupancy

2006 WholeFinland HMA

2007

2008 s in the Helsink the in 2009

2010

2011 area Helsinki metropolitan Office net CBD Helsinki rent index office and occupancyKTI rate, -150,000 -100,000 100,000 150,000 200,000 250,000 -50,000 50,000 100 120 140 160 180 200 220 September andAugust. Annual figuresarecalculatedfromeach12-monthperiodbetween 80 i sqm 2012 Occupancyrate–– metropolitan area area metropolitan

0 1995 1996 2013 1997 2006 take-u 1998 1999 2014 2007 2000 2001 2008 2002 Rental index(1993=100)

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Source: KTIRentaldatabase 2009 2015 2004

2010 2005 2006 2016 2011 2007 2012 2008 2009 2017 2013 Source: KTI,StatisticsFinland 2010 2011 2014 2012 2013 2015 2014 2016 2015 2016 Source: KTI 2017 2017 65 70 75 80 85 90 95 100 % 48 4 Property sectors: market structure, practices and investment performance 49 4 Property sectors: market structure, practices and investment performance most years since 2008. In2017, 2008. since growth however, years most capital in down written been have values capital the as weak, been years, many for has, of offices performance investment The efficiently. more right building lot’s the use to possibility of the because or old building of the characteristics technical of the because either taken is solution This is constructed. one a new and demolished is old the building cases, many In use. hotel or residential to often most purpose, other some to converted been has space of office sqm 463,000 some decade, Within past the buildings. office obsolete for opportunities redevelopment seeking actively are buildings in these investors Therefore, location. /or and quality of space in terms of tenants needs the meet not does space office vacant of the proportion Asignificant connections. traffic public good and efficiency quality, space by driven is currently demand space Office ”Office properties’ investment properties’ ”Office performance improved in Tota area Helsinki metropolitan the in use stock reduction through change ofOffice 100,000 20,000 40,000 60,000 80,000 l return sqm 10 12 -6 -4 -2 0 2 4 6 8 % 2017” 0 confirmed /conversion projecthasbeenstarted. confirmed **Projects areallocatedbetween accordingtothepointoftimewhenthey years arenotofferedforofficeuse;ie.whenthenew planis onrentableareahasn’t*If information beenavailable, rentableareahasbeenestimatedbasedongrossinformation. 06 0720 20 0021 0221 21 0521 2017 2016 20142015 2013 2012 2007 200920102011 2006 2008 2000 Incomereturn Residential s 2001 on offic on 2002

2003 Capital growth ––– Capitalgrowth Hotel

2004 e investments 2005 Other 2006

2007 Total return 2008

2009 , other European capitals European other inHelsinki yields and rents and Office 2000. since time first the for sectors main the among type property of 7.7% performing 2017, for best return the were offices With total the values. capital increasing and rate occupancy adecreasing both by pressured decreasing, continued return Income yields. decreasing by supported positive, turned institutional and international investors are, however, are, mainly investors international and institutional Many percentages. 0.5 than by more decreased yields and cities, major 2017,In other to spread also compression yield capitals. European other many to compared gap apositive offers still Helsinki compression, yield the Despite well below this. currently are yields properties, best the For (4.7% in 2016). at onaverage 4.2% stood CBD Helsinki in the 2017, buildings in October office prime for yields out carried Barometer, Property RAKLI-KTI latest In the yields. decreasing and values rental increasing both by supported been has Helsinki in central growth Capital submarkets. office other all outperformed clearly have, years, many for offices CBD Helsinki 2

2010 00

2011 0-2017

2012

2013 Source: KTI,RPTDocuOy 2014

2015

2016 Source: KTIIndex 2017 Finland. In Statistics Finland’s data, this also includes hotel hotel includes also this data, Finland’s InStatistics Finland. in space of retail sqm million 30 some are there Altogether, Stock market retail The 4.2 capitals. European other in many than level moderate at amore remain rents and slower is still development rental However, inHelsinki, even cities. major in all positive turned outlook however, rental 2016. and In2017, 2009 between sluggish was development rental cities, and areas other in most whereas years, in most CBD Helsinki in the increased have rents Office Finland. of area office prime the as position undisputed an has CBD Helsinki the development, of rental in terms Also metropolitan area. Helsinki the outside cities to also investors now attracting are yields at Higher 140 bps. in 2007, stood gap the whereas Helsinki, to compared gap bps a250 now offers instance, Tampere, for crisis. financial global the before than wider is now clearly cities Finnish main other and Helsinki between gap yield Therefore, pronounced. most the been thus has compression yield where area, Helsinki the targeting Q4/2017 Pri Pri Q4/2017 me me Copenhagen Copenhagen Amsterdam Amsterdam Stockholm Stockholm Budapest Budapest Brussels Brussels Moscow Helsinki Warsaw office yield office ren office Moscow Helsinki London Warsaw Madrid London Madrid Dublin Dublin Berlin Milan Berlin Paris Milan Oslo Paris Oslo 012345678 0 0 0 0 0010 401600 1400 1200 1000 800 600 400 200 0 ts s i n in Helsinkin Helsink i i and othe and and othe and and-leaseback transactions. and-leaseback sale- major some and development new both to due mostly years, inrecent steadily grown has investors professional by owned stock property retail The market. investment in the strong remained has attractiveness properties’ Retail areas. city major in the located mainly are centres shopping biggest The in Jyväskylä. Seppä and in Espoo, of Ainoa phase second the in Helsinki, Easton in 2017 opened that include centres shopping new Major of 2.1million 2016. at end the of some in Finland sqm area retail leasable atotal with centres shopping 99 were there Centres, Shopping for Council Finnish the to According cities. major in other 5.7 and million area, metropolitan Helsinki in the located is stock space retail of the sqm 4million About properties. r r increasing in the Helsinki Helsinki the in increasing European cities, European ”Retail property stock is property ”Retail European cities, European Source: JLL,KTI(Helsinki) metropolitan area” metropolitan Source: JLL,KTI(Helsinki) 011 10 9 /sqm/year % 50 4 Property sectors: market structure, practices and investment performance 51 4 Property sectors: market structure, practices and investment performance is diverse, including domestic institutions, specialised retail retail specialised institutions, domestic including is diverse, properties retail for base investor The universe. property invested 25% total of the some for account properties Retail Players rates. pre-leasing sufficient to subject still are but planned, being are starts project centre shopping major other some Also inSeinäjoki. started be to is expected centre Ideapa sqm 70,000 of a new In 2018, construction the property. hotel and outlet of an construction the with started has project Old Port in late 2018. Kotka the completion InKotka, for sched and construction is Village under Outlet Zsar of the phase first the border, Russian the to Vaalimaa, close of 2018. half In first in the completion for is due which inTampere, Ratina sqm 53,000 is the underway project centre shopping largest the region, Helsinki the Outside in 2018. later started be to in Vantaa is expected centre city 2018, Kivistö the and in January started was Herttoniemi in of Hertsi construction The in Espoo. Lippulaiva and Tripla the in Pasila Mall inKalasatama, REDI include projects ongoing main The stations. railway and metro of vicinity in the mainly connections, traffic public good with units retail in large is concentrated development New construction. under was sqm 277,000 another year-end, at the and completed, was space 25%. In 2017, retail of new sqm 102,000 some some by decade, past the during markedly increased has area metropolitan Helsinki in the stock property Retail Major retail development projects in the Helsinki metropolitan area Ministry of Education and Culture. Data: OpenStreetMap contributo OpenStreetMap Data: Culture. and Education of Map: Ministry 4.0. BY CC under licensed services, web Finland OpenStreetMap KTI. by map the to Additions rs. uled uled rk rk the Helsink the Deve currently owns and operates13 shopping centres across across operates13 and centres owns shopping currently Citycon centres. on shopping concentrates currently which is Citycon, in Finland investor retail specialised largest The retailers. main and investors international funds, and companies investment biggest centres include Forum and Citycenter in the Helsinki Helsinki inthe Citycenter and Forum include centres biggest whose is Sponda, investor centre shopping major Another asset. largest portfolio’s the being Omena Iso with Finland, 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 500,000 lo sqm pmen

0

2005 i t 2006 metropolita o

2007 f retai 2008

2009 l propert 2010 n

2011 are

Source: StatisticsFinland 2012 a y 2005-2016

2013 in stock

2014

2015

2016 Top 10 Shopping centres in Finland in smaller retail units, and continued its growth through through growth its continued and units, retail in smaller invests Partners Capital Sirius by managed fund The centres. LocalTapiola, eQ and OP, have also invested in shopping by managed those as such funds, property domestic Several in 2017. market centre shopping Finnish the entered Partners Capital Cerberus Also Fund. Cities European Estate’s Real TH and Allianz by owned jointly is currently CBD Helsinki in the centre shopping Kamppi The Estate. Real Barings 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 the and Company Insurance Mutual (Etera), Fennia Ilmarinen are co-investors the Pasila, in of Tripla Mall project YIT’s In LocalTapiola’s funds. and SRV, Group’s OP and between Ilmarinen ajoint venture by developed is being project REDI sqm 60,000 The underway. currently that are projects development centre shopping major in two invested also have institutions Domestic of investors. group adiversified by owned are units retail Smaller leases. long with properties hypermarket own typically also Pension in institutions Pori. Puuvilla Renor’s in well as as in Lappeenranta, centre IsoKristiina Citycon’s in is aco-investor Ilmarinen SGroup. and Kesko Rodamco, of Elo, Unibail- consisting agroup by in Vantaa is owned centre shopping Jumbo the –while (Etera) Ilmarinen and Elo –Keva, institutions pension by three jointly is owned Espoo in centre shopping Sello the example, For centres. in bigger investors other with joint investments into enter often also Pension funds Finland. across centres shopping regional, whole, own typically institutions pension Finnish Many Group. Kesko to leased are properties of Mercada’s majority The in Finland. assets 31 retail other and centres shopping three owns which is Mercada, investor retail large in Tampere. Another centre Ratina the well as as region, Oulu in the Tampere, Zeppelin near Elo CBD, Matkus Matkus Willa Willa Mylly Itis Itis Omena Iso Veturi Veturi Hansa Jumbo Jumbo Ideapark Sello CENTER RETAIL NLA RETAIL 48,500 48,500 85,000 65,000 58,149 78,559 53,415 Varma, CapMan Real Estate, Nordic Nordic Estate, Real CapMan Varma, 53,415 49,121 49,121 84,700 84,700 97,900 97,900 91,712 91,712 Unibail-Rodamco, Elo, HOK-Elanto, HOK-Elanto, Elo, Unibail-Rodamco, Real Estate Partners, HOK-Elanto HOK-Elanto Partners, Estate Real Kauppakeskus Hansa Ky, Keva, Hansa Kauppakeskus Ikano Retail Centres Kuopio KUOPIO KUOPIO Kuopio Centres Retail Ikano Kauppakeskus Mylly RAISIO RAISIO Mylly Kauppakeskus Keva, Ilmarinen, Elo Keva, Ilmarinen, Wereldhave Finland Finland Wereldhave Private investors investors Private Citycon Finland ESPOO ESPOO Finland Citycon MAIN OWNERS at the beginning of 2018. The German chain Lidl is the is the Lidl chain German of 2018. The beginning at the store department of Stockmann operations goods daily the over took in 2016, chain SGroup and Lähikauppa Suomen former the acquired Kesko years: inrecent acquisitions through expanded both also have They brands. different –under stores smaller and supermarkets hypermarkets, – categories store inall operate They 2016, respectively. in sales 36% of 47% of total and shares Kesko, with and SGroup by is dominated market goods daily Finnish The retailers. international attracted have centres shopping in large and CBD Helsinki in the locations best the particular, In cities. main Finland’s in 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 out-of-town with consumers for compete typically shops street high centre city cities, regional many In in Helsinki. retail prime in owners retail significant also are Ilmarinen and Keva as s investors office major a result, as and, buildings, office CBD inHelsinki located typically are shops street High properties. retail other and centres in shopping investors and developers also are SGroup and Kesko chains Retail portfolio. seed its as Elo from properties 10 retail acquired who Kiinteistöt, is Agore player in 2017. domestic acquisitions new several Another drinks in the beginning of 2018. beginning in the drinks low-volume of some alcoholic sales of the liberation is the in regulation change Another in particular. hypermarkets and centres shopping in large sales increased and hours opening in longer resulted has This size. or location their of regardless restrictions without open now be can shops all and deregulated, currently are units of retail hours Opening €16.7 some to billion. amounted goods of daily sales In2016, 9%. of some total the ashare with market goods daily in the player largest third Nurmi-yhtiöt Nurmi-yhtiöt Mercada Kesko Kesko Source: Finnish Council of Shopping Centres Shopping of Council Finnish Source: LEMPÄÄLÄ LEMPÄÄLÄ HYVINKÄÄ LOCATION KOUVOLA KOUVOLA HELSINKI VANTAA VANTAA ESPOO ESPOO TURKU TURKU uch uch 52 4 Property sectors: market structure, practices and investment performance 53 4 Property sectors: market structure, practices and investment performance consumer confidence, slow inflation and decreasing decreasing and slow inflation confidence, consumer strong by supported was growth The Finland. Statistics to 2% some by in 2017, increased sales Total according retail retailThe market in 2018 small. rather is typically rent of turnover-based share the but centres, in shopping increasing is gradually leases of turnover use The leases. shorter have typically tenants Other flexibility. for need increased tenants’ to due pressure however, under now, are agreements These 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 SGroup and Kesko rent. net with contracts long-term relatively typically are agreements and driven, cash-flow increasingly are investors properties, supermarket and hypermarket In shops. street in high especially applied typically are of terms kinds These period. time infinite 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 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 of fashion and grocery and department stores decreased decreased stores department and grocery and of fashion sales the hand, other the On beauty. and health well as as supplies and décor home furnishing, are development strong showing in 2017. 9% categories almost by retailer Other increased centres in shopping restaurants and of cafes sales total example, For increase. to continues centres shopping of area space and sales total of the of services share The 1%. some by increased sales centre shopping in Finland, elsewhere 8.2%, whereas to amounted growth the area, metropolitan Helsinki Inthe Finland. 5.2% by of whole inthe increased sales centre shopping total, In pronounced. more even in sales increase the makes area metropolitan Helsinki in the stock centre in shopping growth The in Finland. elsewhere than area metropolitan Helsinki in the stronger again, was, in sales growth The Centers. Shopping of Council Finnish the and KTI by produced indices the to according by2.2%, increased of visitors number The in 2017, of Finland whole like-for-like stock. comparing when 1.7% by inthe increased centres Total inshopping sales cent. 3per 2and between vary growth consumpti private for in 2018, forecasts latest the and conti to expected is development Positive unemployment. ”The share of services of share of services ”The shopping centre sales is is sales centre shopping increasing” nue nue on Photo: Skanska / @ 2017, Petteri Kivimäki uncertain. uncertain. more as is regarded units of smaller future the whereas locations, in good units retail in large confidence a strong have managers and Investors future. inthe rates vacancy and of rents development the to regard with uncertainty some is currently there area, metropolitan Helsinki in the construction under space of retail amount With large the cities. major 6% in other 3and between vary rates Vacancy Catella. to according 3.3% year-end, at the amount and fell further, area metropolitan Helsinki in the space In 2017, of retail cities. major rate vacancy the low in most remained has space of retail rate vacancy The future. in the increasing continue to rents retail prime expect year. Respondents previous the to compared increase asignificant shows which onaverage, month per €114 at some stood CBD Helsinki sqm in the per rents prime Barometer, Property RAKLI-KTI the to According in 2017. positive turned rents retail of prime development the centres, shopping best in the and CBD Helsinki the In 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 3.7%. some to amounts currently space retail of total share Their is increasing. centres in shopping services leisure and of entertainmen slightly kinds in 2017. of various supply The centres increasedcentres by 5.2% in ”Total sales of shopping shopping of sales ”Total Sales and visitors in the Finnish shopping centres 100 105 110 115 85 90 95 2017” 12-month moving average, 2012=100 10/2012

01/2013 HMA(totalsales) RestofFinland(totalsales) Othermajorcity regions(totalsales) Rest ofFinland(visitors) Other majorcityregions(visitors) HMA (visitors) 04/2013 07/2013 10/2013 01/2014 04/2014 07/2014 ed to to ed 10/2014

t t 01/2015

Source: KTIandFinnishCouncilofShoppingCenters 04/2015 07/2015 performance in the Helsinki metropolitan area and in the rest rest inthe and area metropolitan Helsinki inthe performance inthe difference asignificant was there Again, of 4.0%. return atotal with properties retail other outperform to at in 2017 3.6% (3.7% continued in 2016). centres Shopping stable remained investments property on retail Total return total volume. volume. total the to Ky added also Kiinteistöt Agore established newly the by acquisition portfolio property €160 retail million The Partners. Capital Cerberus by centres shopping five of Citycon’s acquisition the was transaction major Another in Turku. centre Skanssi in the invested fund CBRE’s and eQ’s fund invested in the Liila shopping centre in Espoo, centre, shopping Kamppi of the 50% acquired fund Estate’s in2017. Real transactions TH property retail and centre shopping major other however, were, several also There sector. retail in the also volume onthe impact asignificant had transaction Sponda the so Tampere areas, and metropolitan Helsinki in the centres of shopping owner is amajor 2016. to Sponda compared 60% in2017, billion €2.7 of almost some increase an showing to amounted transactions property Total of retail volume decline. to continued values capital in Finland, elsewhere whereas area, metropolitan Helsinki in the 2.2% positive, slightly was properties retail for growth Capital of Finland. 10/2015 01/2016

retail markets outperform rest retail rest markets outperform 04/2016 ”Helsinki metropolitan area 07/2016 10/2016 01/2017 04/2017 of Finland” of 07/2017 10/2017 54 4 Property sectors: market structure, practices and investment performance 55 4 Property sectors: market structure, practices and investment performance terraced houses and single-family 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 of Finnish About locations. in urban especially steadily, increased has dwellings smaller for demand the Therefore, 48%. is currently households of single-person share the In Helsinki, persons. two or of one consisted In2016, 76% some households of Finnish decreasing. constantly been has household of aFinnish size average The 46%. at currently stands and years in recent increased has buildings in apartment of dwellings share The homes. single-family are 40% about these, Of 263 sqm. million some comprising in Finland, dwellings occupied million 2.6 some are There Stock sector residential Rental 4.3 Pri Tota 100 110 120 130 140 40 50 60 70 80 90 me /sqm/month l retai

return o return 1995 10 15 20 -5 % 0 5 1996 1997 2000 Incomereturn 1998 l 2001 ren 1999 n

2002 2000 t retai

2003 2001 th in 2002 2004 Capital growth ––– Capitalgrowth l 2003 e 2005 in 2004 Helsink ve 2006 2005 stments 2007 2006 2008 2007 2008 i or the disabled, as well as some organisations which have have which organisations some well as as disabled, the or students as such groups specific for housing rental offering organisations non-profit by owned are dwellings subsidised Other companies. daughter municipalities’ by owned are dwellings of subsidised majority The housing. of rental subsidy interest an or loans guaranteed state- as subsidy, such of public kind some with provided been have 375,000 some these, Of in Finland. apartments rental 854,000 some of were 2016, end At the there 32%. is some dwellings of rented share the country, whole the In larger. is even share the overall in Helsinki and rented, are dwellings of all 44% some area, metropolitan Helsinki Inthe on average. country whole in the than cities in major common is more housing Rented respectively. sqm, 52 and sqm of 97 areas space average with dwellings rented than larger significantly are dwellings Owner-occupied sqm. The average size of a residential dwelling is currently 79.9 isdwelling currently of a residential size average The 2009 Total return 2009 CBD

2010 Source: RAKLI-KTIPropertyBarometer , 2010 2011 2 2011 00 2012 2012

0-2017 2013 2013 2014 2014 2015

Source: KTIIndex 2015 2016 2016 2017 2017 (autumn 2018)

for development development for Finnish household Finnish Owner-occupied andOwner-occupied rented dwellings in the Helsinki metropolitan area the share of subsidised dwellings in their portfolios. in their dwellings of subsidised share the reducing currently all are they but businesses, of their part alimited for status hold this also SATOKojamo, Avara and market, residential in the players major the Of of companies. kinds of these examples are Asunnot KAS and TA-Yhtymä Y-Foundation, status. utility public aspecial granted been 1,000,000 1,200,000 No. ofhouseholds Tenure status 1 person 2 persons 3 persons 4+ persons persons 4+ 39% 3persons 2persons 53% 1person dwellings rented All dwellings All owner-occupied status Tenure unknown tenure status status tenure unknown or other and dwellings occupancy of Right 200,000 400,000 600,000 800,000 Photo: SATO 0

1985 1987 1989

1991 3+ residents 2 residents 1 resident 1993

1995 s by sizeby

Size of household-dwelling unit household-dwelling of Size 1997 1999 2001 41% 41% 6% 6% 2003 2005 2007 2009 2011 Source: KTI 2013 2015 55% 55% 5% 5% 2016 dwellings has been started under this subsidy system. system. subsidy this under started been has dwellings 840 of some of 2017, end the By price. construction the at market let freely be can dwellings the period, this After levels. rental at moderate low-income to tenants rented be to have dwellings the period which during guarantee, state and subsidy interest ona10-year in 2016, based introduced was framework recent most The cities. inmajor of housing supply the boost to in order players sector private for frameworks of subsidy kinds different offer also may government The subsidy. interest a40-year with dwellings rental normal so-called in were 2017. 3,000 started some was these, Of dwellings subsidised 8,560 of some construction the total, In groups. specific for housing offering foundations by as well as companies, municipal by mainly developed being is currently housing Subsidised cost-based. are rents stock, subsidised of the majority in the and, selection tenant for rules specific have Some forms. different between significantly vary supply housing for subsidy of public types different of regulation and terms the markets, subsidised In the ”Demand for”Demand rented dwellings 37% 37% 57% 57% 6% 6% 6% 6% continue to increase” to continue 29% 29% 65% 65% 241,959 241,959 277,8 36 36 277,8 30,829 30,829 Total Total 56 4 Property sectors: market structure, practices and investment performance 57 4 Property sectors: market structure, practices and investment performance rapidly in recent years, currently comprising some 179,000 179,000 some comprising currently years, in recent rapidly holdings their increased have investors professional called so- the market, residential rental non-subsidised In the apartments. 48,500 around with segment in this player biggest is the of Helsinki, city the by Oy, owned Heka acompany municipalities. Finnish the by is owned stock housing subsidised of the majority The Players use. at rental targeted only in buildings were of these 2,700 follow-up, some KTI the to year. of the end at According the construction under dwellings 6,900 some were alone, there Helsinki In buildings. inapartment are dwellings new of the thirds two some and in particular, area metropolitan Helsinki in the cities, largest in the is weighted growth 2016.to The 12% of some compared agrowth year, the representing during started was dwellings new 45,000 of almost construction the Finland, of Statistics statistics preliminary the to According in 2017. increase to continued construction Residential investors. private other or households Finnish by is owned dwellings, 300,000 some stock, non-subsidised of the majority the and years, in recent dwellings rental in investments their increased also have households Finnish investments. residential their increased have investors foreign well as as funds and companies property institutions, groups, investor all investors, professional the Of stock. subsidised of restrictions of the termination the through extent, lesser a to and, construction, new through mainly years, in recent markedly increased has stock The dwellings. 479,000 some to amounts currently stock housing rental Non-subsidised location. dwelling’s the well as as size, and income household’s onthe depends of subsidy amount The dwellings. non-subsidised and subsidised in both living tenants for granted be may subsidy This support. housing public through subsidised be Tenants also may low income with *Estimate activity construction Residential Non-subsidised Subsidised Total Non-subsidised Started residential dwellings residential Started Apartment buildings buildings Apartment Single-family homes homes Single-family Subsidised Non-subsidised activity increasingactivity in largest ”Residential construction construction ”Residential cities”

34,500 34,500 12,500 23,300 23,300 12,500 11,200 11,200 11,200 11,200 21,000 21,200 21,200 21,000 9,800 9,800 2010 2011 2012 2013 2014 2015 2016 2017* 2018* 2018* 2017* 2016 2015 2014 2013 2012 2011 2010 25,200 25,200 11,000 11,600 11,600 33,700 33,700 12,700 12,700 8,500 8,500 8,500 8,500 13,900 13,200 13,200 13,900 24,800 24,800 31,000 20,100 20,100 6,200 6,400 6,400 6,200 6,200 6,400 6,400 6,200 9,800 9,800 9,800 9,800

21,500 21,500 19,600 19,600 27,900 27,900 8,100 8,100 8,100 8,100 small minority of their portfolios. Both companies have been been have companies Both portfolios. of their minority small a for account only currently which holdings, subsidised their reduced years, have, in recent SATO and inKojamo particular in Finland. companies investment property residential specialised biggest the Kojamo, SATO are Avara and households. or persons private mainly investors, small by is held apartments, 300,000 majority, some The dwellings. support the company’s further growth. growth. further company’s the support to and base shareholder its expand to in order listing public fo possibilities the it is investigating announced also has Kojamo funds. Group’s OP from apartments 1,000 almost acquiring by further portfolio its 2018, increased Kojamo of 2017, end at the dwellings early In 25,800 respectively. and 34,400 some comprised portfolios Their in Finland. investors property largest of the ranking inthe three and one hold positions SATO and currently Kojamo development. own their through and transactions major several through portfolios non-subsidised their in increasing active Total 854,000 rental apartments apartments rental Total 854,000 Finland in apartments Ownership of structure rental ”Investors increasing are their Source: ARA, Statistics Finland, Suomen Vuokranantajat, KTI KTI Vuokranantajat, Suomen Finland, Statistics ARA, Source: 18,400 18,400 25,300 32,400 32,400 25,300 11,000 17,900 17,900 7,400 7,400 6,700 6,700 6,700 6,700 7,400 7,400 375,000; 44% residential portfolios” ■ ■ ■ Professionalinvestors Municipalities andotherowners Households /privateinvestors (subsidised) (non-subsidised) (non-subsidised) 23,900 23,900 16,800 16,800 25,300 25,300 8,500 8,500 8,500 8,500 6,500 6,800 6,800 6,500 6,500 6,800 6,800 6,500 300,000; 35% 179,000; 21% 29,600 29,600 29,100 29,100 21,700 700 300 40,000 43,000 37,000 Source: Statistics Finland, ARA, RT RT ARA, Finland, Statistics Source: 7,900 7,900 7,900 7,900 400 31,000 34,000 35,100 31,600 31,600 35,100 26,100 26,100 ,0 9,000 9,000 ,0 9,000 9,000 7,500 7,500 7,500 7,500 22,600 22,600 8,000 8,000 , both , both r create a good platform for distribution to private investors private to distribution for platform a good create Investment Managers, Real Assets acquired more than 1,100 than more acquired Assets Real Managers, Investment 2017, In AXA by managed Partners. afund Capital Avant through market residential Finnish in the channeled been has capital US some Also NREP. manager fund Nordic the (BVK), well as as Versorgungskammer Bayerische German the include market in the present investors of foreign Examples of years. couple past inthe markedly increased has market residential Finnish in the interest investor Foreign and Management Property by OP managed are investors at private targeted funds residential largest The of capital. plenty attracted have these and established, been have investors at private targeted funds investment mutual special open-ended new some years, two past Inthe institutions. at domestic targeted are Estate Real LocalTapiola and ICECAPITAL instance by for managed Funds investment. property in residential specialisin funds property non-listed several also are There development. housing in new leverage use to possibility temporary the by boosted currently also are investments residential investors’ Institutional 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 a are properties Residential market. residential rental inthe players significant also are funds pension Many ”Foreign investors”Foreign increase Finnish residential sector” their investments in the Ålandsbanken , whose branch networks networks branch , whose g g . per cent. This kind of indexation is used by professional by professional is used of indexation kind This cent. per of 5 3or aminimum instance for increases, oflevel rental onahigher agree to common It is also used. most the being index of living cost the with indexed, typically are Rents period. rental the of length on the depends also period the but months, three 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 afterwards continuing ayear, agreement as the with 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 is owned 23% company of the another of SATO, and majority the owns currently Balder company property listed Swedish the instance, for market: residential Fi in the indirectly invested is also capital Foreign fund. German unnamed an of onbehalf dwellings 300 some purchased Advisers Estate Real Barings Also, transactions. separate inthree apartments ”Regulation of the residential rental market is liberal” nnish

Photo: YIT 58 4 Property sectors: market structure, practices and investment performance 59 4 Property sectors: market structure, practices and investment performance Volum transactions than in the non-subsidised market. non-subsidised in the than lower but stock, subsidised in traditional than higher be to expected are rents apartments, these In refurbishments. and repairs for reserved and collected amount the for well as as investor, the to paid of dividend amount the increases, rental annual for restrictions are there model, subsidy 10-year new the In market-oriented. typically are rents but buildings, of period holding the or selection tenant for conditions varying be might there dwellings, subsidy interest some In cost-based. are rents used, are subsidies or loans housing state long-term where stock, ARA-housing so-called In housing. priced moderately for need onthe consideration with approach holistic on a more is now based selection and rules, selection tenant from removed were criteria income However, in 2018, selection. strict tenant levels and rental both to related restrictions be might –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 inparticular, investors 1000 MEUR 0.0 0.5 1.0 1.5 2.0 2.5 3.0

.201 0.13 0.14 0.12 e Price 2006 o f 2007 100 200 300 400 500 residentia s

2008 o f 0.26 1985 Helsinki metropolitan area Helsinki metropolitan 2009 1986 residentia old 0.17 2010 1987

.70.26 0.27 1988 2011 l portfolio portfolio 1989 2012 1990

0.66 1991 2013 1992 0.70

2014 1993 l dwe 1.25 1994 Other areas 2015 1995 2.80 ll Source: KTI 2016

1996 ings

1.05 1997 2017 1998 , Whole Finland

1999 inde 2000 2001 x 2.2% in 2018. The increase will continue to be strongest strongest be to continue will increase in 2018.2.2% The some to amount and slightly accelerate to prices housing in increase the forecasts PTT Research Economic Pellervo 0.4%. by increased only they country in the elsewhere whereas 2.8%, by increased prices area, metropolitan in 2017. on average Helsinki In the country whole in the 1.5% some by increased dwellings old for residential prices Finland, of Statistics statistics preliminary the to According residentialThe market in 2018 in rents to continue in all major cities. The positive outlook outlook positive The cities. major in all continue to in rents increase the expected respondents of the majority the and year, the during positive more turned development rental for expectations the Barometer, Residential RAKLI in the year. of the end the Also slightly towards accelerated rents in increase The agreements. rental in new onaverage cities main other for 2.0% and area metropolitan Helsinki the for of 1.5% increase annual showed an 2017,In indices rental KTI years. in recent development their to compared slow down to is expected inrents rapidly, increase the is now increasing of dwellings However, supply the size. as household average in adecrease and urbanisation continuing by strengthened is demand The cities. major inthe apartments small for especially strong, remains housing rental for Demand in 2017. transaction single largest the was dwellings 900 of some acquisition IMRA’s AXA apartments. 100-300 of some transactions of smaller mainly consisted volume the sold; being were in2016, Unlike billion. portfolios major no €1.1 some to year, amounted and previous the to compared in2017, markedly 62% some by decreased transactions portfolio property residential of rental volume The in prices. increase an for pressure the smoothen help will construction of new volume high The particular. in area metropolitan Helsinki inthe and cities, in largest

2002 (1983=100) 2003 2004

transaction volume amounted 2005 2006 ”Residential property property ”Residential to €1 billion in 2017” 2007 2008 2009 2010 2011 2012

Source: StatisticsFinland 2013 2014 2015 2016 2017 sectors, residential was the best performing sector in the inthe sector performing best the was residential sectors, property main the Of market. investment inthe attractiveness sector’s the supporting driver main is the which strong, Residential properties’ investment performance has remained onaverage. portfolios investors’ in large 96% some at strong, remain portfolios of residential rates Occupancy in unemployment. adecrease and confidence consumer of economy, growth the strengthening the by is supported ”Positive development of the Helsink KTI Residentia KTI economy rental supports growth in thegrowth residential Inde Residentia 10 12 -4 -2 % 0 2 4 6 8 x 100 120 140 160 180 200 i 80 (2 Market rents,Market new agreements Annual changeandforecast metropolitan area and othe and area metropolitan 2001 market” 00 0=100) 2002 2000 –– Helsinki metropolitan area Helsinki metropolitan Rents–– l

l 2001

2003 pr ren ice and ren and ice

2002

2004 t Prices index, 2003 2005 2004 2006 2005

2007 2006 t indexes 2008 2007 Other majorcities

2009 2008 r ma

2009 , 2016, mainly supported by an increase in rents. in rents. increase an by 2016, supported mainly slightly from increased return Income at 2.3%. stood and positive remained properties onresidential growth Capital 7.7 to 7.5%, amounting and respectively. returns total with slightl properties residential in 2017, outperformed offices 2016. and However, 2008 between year every Index KTI 2010 investors. attract to started also have buildings educational as such properties of public kinds other years, past the during but properties, at healthcare targeted mainly first was interest Investor years. in recent market invest in the attractiveness their increased have services of public kinds of different supply the for used Properties Stock 4.4 Public use properties Helsink

jo 2010 2011 r 2011 2012 cities

2012 i metropolitan area area metropolitan 2013 Source: KTIandStatisticsFinland 2013 2014 2014 2015 2015

2016 2016

2017 2017

2018

2019 Source: KTI ment ment y, 60 4 Property sectors: market structure, practices and investment performance 61 4 Property sectors: market structure, practices and investment performance to rent normal office premises from private sector investors sector private from premises office normal rent to organisation sector public for common increasingly It is also faciliti sports well as as buildings cultural and educational various 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 rather is still investments of private amount the segments, property use public In other year. previous the to compared billion of €0.5 increase an of 2017, €2.1 end at billion the some to amounted showing investors professional by owned properties healthcare the of value market the estimates, KTI the to 2016. According of end at the 12.7 sqm million some to amounted facilities of healthcare stock total the Finland, Statistics to According facilities. the operated have and services social provided also have which organisations, sector public other and municipalities by owned been traditionally have facilities of these most context, Finnish the In properties. hospital even and facilities medical facilities, care people), day disabled well as as children’s patients mental (e.g. and people elderly groups target different for homes nursing and facilities living of assisted consisting segment market a diversified are properties Healthcare 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 inconsidering interested increasingly also are operators sector public and investors, private attract to started recently just has market The properties. of these owners predominant the still are state Finnish the and Municipalities groups. target specific for offered housing serviced and buildings hospital large specialised highly to properties office normal from ranging segment market diversified a are services of public provision the for used Properties continue to attract investors” attract to continue ”Public use properties properties ”Public use Tota 2 00 10 12 14 0-2017 l % 0 2 4 6 8 return o return

2000

2001 Incomereturn 2002 n

2003 residentia 2004

2005 ––– Capitalgrowth

es. es. 2006 s s .

2007 l

2008 in property up new opportunities for both service providers and and providers service both for opportunities new up opening is also reform approaching the by caused provision service social and healthcare in the change structural The population. of the ageing the with is increasing properties sector social other and healthcare for demand The Players targeted at assisted living facilities for elderly people. The The people. elderly for facilities living at assisted targeted been typically have sector in healthcare investments funds’ Pension investors. foreign specialised some and funds property domestic investors, institutional include sector investment property healthcare inthe players sector Private investors. property 2009 Total return 2010 2011

2012 ve

2013 stments, 2014

Source: KTIIndex 2015 2016 2017

Photo: YIT most investors continued investing in new development. development. in new investing continued investors most in2017 million in 2016). million (€500 €400 addition, In some to amounted properties of healthcare volume transaction The 2018 in Market by net income. driven strongly are investments sense, this In refurbishments. for even cases, in many and, insurances, and tax property maintenance, for is responsible tenant the where leases, net commonly most are agreements 10−15 Lease instance years. long, for typically are properties of healthcare Leases operator. aprivate to premises the leases further 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 on the depending vary which requirements, technical strict fulfil to and authorities the by approved be to need facilities the Even companies. solid financially be to need operators that the 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 by private owned properties care of health majority The applied. be can practices market 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 IMRA. AXA and Group Property Pioneer include market property care Finnish in the players foreign Other Helsinki. in Kalasatama, completed recently that was centre wellbeing and health in anew invested has Deka German The agencies. public by used properties in office invested mainly has which is Hemfosa, market Finnish in the active investor Swedish Another properties. educational some also are there portfolio, Finnish million €370 company’s the In sector. property healthcare Finnish in the investor foreign largest the is currently Hemsö Swedish The properties. of service kinds in various investing fund investment aspecial established recently has Group OP Also million. €250 almost worth aportfolio has currently properties, in care investing company property alisted Hoivatilat, Suomen fund. Horizon’s Northern from aportfolio acquired which I, Healthcare Evli fund, anew established Evli Also region. Nordic the across properties in healthcare invests which Care, Aged Nordic In2017, fund, anew launched properties. company the in healthcare investing funds several manages Horizon Northern million. €700 exceeds portfolio property of its value current the and years in recent markedly increased has Rahastoyhtiö. eQ’s special mutual fund eQ Hoivakiinteistöt are managed by eQ Bank, Northern Horizon, and Titanium properties in healthcare investing funds property largest market continues to increase” ”Care property investment property ”Care

has increased in municipalities with good traffic connections connections traffic good with inmunicipalities increased has supply the Inparticular, 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 sqm, million 70 some to amounts stock property logistics and industrial Finnish The Stock 4.5 Industrial /logistics market fund. established newly €140 worth Evli’s to million aportfolio divested fund II Healthcare Horizon’s 2018, early In Northern acquisitions. several through portfolios their inincreasing active most the Of the major investors, eQ’s, Titanium’s and OP’s funds were agreement. outsourcing of aservice apart as municipality a from property the bought who operator aservice was buyer the cases, in many and transactions, asset single small in 2017 rather were of transactions majority The capital in 2017: capital investor, together Korean unnamed an Asian attracted also market property logistics Finnish The million. €920 some to amounts currently portfolio Finnish in2017. company’s of the value transactions The separate six through portfolio property logistics and industrial Finnish its increasing continued Sagax AB company listed Swedish The €1 to is close billion. portfolio Finnish company’s of the value estimated the transaction, Logicor onthe published information onthe Based sector. property /industrial logistics Finnish in the investor specialised largest is the partners, investment its with together Corporation, Investment by China owned currently Logicor, corporations. retail and industrial large instance, for include, owner-occupiers Big owner-occupied. be to is estimated properties warehouse and of industrial stock 85% some total of the value, capital by Measured players. foreign and funds property institutions, domestic including investors new is attracting sector The 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, relat very until up was, Owner-occupation Players space. logistics efficient modern towards demand space the reshaping and increasing are systems logistics and chains of supply reorganisations and sales of retail restructuring trade, foreign well. Increasing as recently markets investment in the sector of this emergence in the recently, resulting quite emerged only 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 and ively ively

62 4 Property sectors: market structure, practices and investment performance 63 4 Property sectors: market structure, practices and investment performance invest in industrial and logistics properties. A new player player Anew properties. logistics and in industrial invest rental levels for modern logistics premises are relatively high, high, relatively are premises logistics modern levels for rental comparison, However, ininternational years. inrecent stable fairly remained have rents property logistics and Industrial in 2017, at 5.9% year-end. at the stood and slightly decreased rate vacancy Catella, to According area. metropolitan Helsinki in the years in recent stable remained has space industrial and logistics of vacant amount The industrial/logisticsThe market in 2018 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 rent triple-net or net typically are Rents markets. logistics and industrial inthe vary practices rental needs, user and stock available of both heterogeneity of the Because practices Market investment. and development property manufacturing and inlogistics players smaller numerous are there company. addition, In service e-commerce and logistics postal, Finnish of the arm property the Kiinteistöt, is Posti market property logistics in the player significant Another in Lahti. instance for properties, manufacturing and logistics some owns also Renor company investment and development property Finnish The in late 2017. assets /industrial commercial smallish in two investments first two its made which fund, YieldTrevian High Property fund investment is Trevian’s special new segment in this funds, those managed by OP, eQ and Fennia, for example, domestic the Of portfolios. ininstitutional represented typically also are properties industrial and Logistics Helsinki-Vantaa the to Airport. close property in alogistics investment anew made Fund Property Balanced European Aberdeen’s Also Group. Posti Finnish the to rented mainly aportfolio acquired Partners, Estate Real GLL with Tota 2 00 10 12 14 -6 -4 -2 % 0-2017 l 0 2 4 6 8 retur

2000 Incomereturn

2001 n

2002 i on 2003 nd

2004 ––– Capitalgrowth ustria 2005 2006 s. s. 2007 l property in property 2008 Total return two logistics properties in the area. One of the properties properties of the One area. in the properties logistics two building in 2017, is currently terminal cargo YIT new and a completed Finnair in 2017. airport, of the vicinity the In completed also in Äänekoski, investment facility industrial major company’s the to is related which property, logistics sqm of a28,000 development the completed MetsäFibre Vuosaari, In areas. harbour Vuosaari the and airport in the concentrated been recently has area metropolitan Helsinki in the properties industrial and of logistics development New assets. industrial some were there portfolio, Sponda in the Also Partners. Estate Real GLL and Sagax by out carried were transactions largest the transaction, Logicor the to addition €1.5 some to In billion. amounted properties industrial and of logistics volume In 2017, transactions total the higher. sqm €2−3 per typically 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 2009 in late 2018. completed be to scheduled is also project This use. own its for facility logistics sqm a60,000 is developing Lidl Helsinki, of north also in late 2018. completion Järvenpää, In for due is 112,000 sqm, comprising phase, 2016, second the and in completed was project Freeway of the phase first sqm 77,000 SGroup’s of Helsinki, north Sipoo, In themselves. facilities logistics their develop typically retailers Major in Pitäjänmäki. property centre data sqm a30,000 is developing Sonera Helsinki, In Ruokakesko. for warehouse central anew developing is currently Logicor in2017. fund inVantaa, Also Aberdeen’s to sold was 2010 2011 transaction volume increased 2012 ve stments, stments, 2013 ”Industrial property property ”Industrial 2014

Source: KTIIndex 2015

2016 2017” in 2017 clearly higher at 68.5%. higher clearly was rate occupancy the region, Uusimaa the In average. on 55.9% to in 2017 country increased whole in the rooms of hotel rate occupancy the Finland, Statistics to According 2018 in market Hotels differently. allocated be might tenant and landlord the between responsibilities use, in retail example for space, of other amount is asignificant there where centres city in properties some In costs. operational and maintenance all for is responsible operator The agreements. rental net long, triple favour typically investors property hotel Finnish 2018. in summer opened be will Helsinki Hotel Lapland inOulu. another in Tampere one and also but in Lapland, located mainly 17 hotels, operates Hotels, Lapland hotel chain, owned privately biggest 2018. in early The George St. hotel newest its open will group The area. metropolitan Helsinki in the hotels design and 10 luxury operating currently chain, hotel is a growing Hotels 11 with Western Collection Kämp hotels. followed Best by Finland, 17 across hotels operates which Hotels, Finlandia comprise inFinland chains hotel Other country. the across hotels 50 almost operates currently S Group Finland. across hotels 3Hilton and hotels 24 Scandic operated Scandic acquisition, the Before Authority. Consumer and Competition Finnish the by required as divested be to need that hotels of three exception the with Scandic by operated and rebranded be will instance, for Indigo, and Inn Holiday Cumulus, brands the under 43 operated had that hotels Restel’s of Restel. operations hotel the it acquired when in 2017, operator hotel largest the became Scandic Group. S and Scandic include in Finland operators hotel main The properties. hotel some own also particular, in SGroup operators, hotel Some Balder. and Immobilien Deka include market property hotel Finnish inthe investors Foreign properties. hotel major insome invested have Exilion by managed those funds, domestic the Of portfolios. their in properties hotel hold some also institutions biggest the of Most Pandox. Swedish the and hotel fund CapMan’s are in Finland owners property hotel biggest two The Players of 2017. end at billion the €3 some at stood investors professional by owned properties hotel of value market the estimates, KTI to According region. Uusimaa in the located are rooms 15,000 some with hotels 121 these, Of rooms. 51,000 some comprising Finland, 613 are in there hotels Finland, Statistics to According Stock Hotels 4.6 in 2017. properties logistics outperformed properties industrial 2%. Other some by decrease to continued values healthy, capital but remained of 5.4% in 2017 (5.5% return a total in 2016) income Net produced sector property /warehouse industrial Finnish The metropolitan area. Major extensions were completed in completed were extensions Major area. metropolitan 2017,In Helsinki inthe opened were hotels new no in 2017. numbers digit two- by increased tourists of foreign number the Lapland, in Also 37%. by most, the increased tourists Russian by spent of nights number 2016. to 15% The some compared by increased in Helsinki tourists foreign by spent of nights 2017, In Lapland. and area number the metropolitan Helsinki include in Finland tourism for areas growth main two The tourists. British and Chinese US, for also 20% exceeded 2016.to Growth 27% as in 2017, much by as that of Germans compared and 9%, some by increased tourists of Russian number The in 2017. in Finland group tourist foreign biggest the were 14%. than more by tourists Swedish in grew hotels spent of nights number total whose tourists, of foreign number increased onthe based was growth year. The previous the to 5.3% some by in 2017 grew hotels compared Finnish in the spent of nights number the Finland, Statistics to According growth supported the capital growth of hotel properties. of hotel growth capital the supported growth in 2017 (12.4% rental and yields in 2016). decreasing Both of return a total delivered and performance strong their continued properties hotel Index, KTI the to According 2019 2021. and between property the extend and redevelop will LocalTapiola property of the owner the inTurku, Hotel and Börs Hamburger traditional the operating start that it will 2017, announced Hotels Scandic of 2018. half Inlate first in the started be will which project, in the investor is the in Tampere. Keva in Finland hotel first its open it that will late 2017,In announced Marriott Tower Casino in Savonlinna. Hotel of the development is the underway project largest the area, metropolitan Helsinki the Outside in 2020. opened be to is planned Scandic by operated hotel anew and use, hotel into converted be will property The CBD. Helsinki in the Group of VR property office head former the acquired also in 2017. market Exilion property hotel in the transaction Tripla of largest the the was Hotel acquisition million €88 Exilion’s NREP. by property headquarters Kesko former in 2017, fund of the Exilion’s redevelopment the well as as by acquired Tripla the was which in Pasila, include Hotel starte be to about projects hotel Major construction. under is Hotel Airport Helsinki Scandic new the and extended, is being Hotel InVantaa, Flamingo the CBD. Helsinki in the underway project significant most the was Bulevardi Hotel 2018. year, of the end At the inearly Lapland opened be will CBD, Helsinki in the also George, St Hotel in Ruoholahti. Seaside Blu Radisson in the and CBD, in the Haven Hotel ”Hotel stock is increasing in the Helsinki metropolitan area” 8.7% 8.7% d d 64 4 Property sectors: market structure, practices and investment performance 65 5 Property markets in different regions – outlook for 2018 outlook for 2018 different regions– marketsin 5 Property some 37% of the Finnish GDP. 37% Finnish of the some 31% about delivers for and jobs of all accounts population, 27% Finnish of the it accommodates but country, entire of the 1.2% for area of the accounts area land region’s The 1.5 inhabitants. million some has and of 14 municipalities consists region Helsinki entire The of 1.2 people. million apopulation has Kauniainen, Vantaa and Espoo, Helsinki, of cities of the consisting area, metropolitan Helsinki The area 5.1 Helsinki metropolitan The context. portfolio in awider included typically are investments These markets. residential and in retail especially cities, in smaller operate also companies and funds domestic Some owner-occupiers. and investors local by dominated traditionally are regions city in smaller markets Property area. metropolitan Helsinki the to compared offer they gap yield positive the by strengthened was market investment in the cities of these attractiveness In 2017, segments. market the selected in their cities in these invest also investors international Some areas. market these in only operate who players local are there cities, these all In strategies. investment in their markets target as centres growth these and area Helsinki the define investors domestic Many Kuopio. and Lahti Turku, Jyväskylä, of Tampere, Oulu, centres growth regional the include markets second-tier The region. capital in the invest only players global large many and investors, foreign among is well-recognised area The area. metropolitan Helsinki in the concentrated is also market investment property institutional The 60%. than more accommodates area metropolitan Helsinki the properties, of office stock total the Of area. metropolitan Helsinki inthe is located stock property of commercial third one about value, by measured markets: office in the prominent most is the dominance Its market. property Finnish in the region dominant is the area metropolitan Helsinki The Pe Th rc e enta structure o structure ge o f 15.8% jobs , 14.2% f 2016 HELSINKI REGION the economy the 25.2% 0.4% 44.3% andforestry Privateservices Agriculture Retail Manufacturing Public services Helsinki region: 1,472,000 region: Helsinki professional industries, Information base: Economic industry review, published by the Helsinki Region Chamber Chamber Region Helsinki the by review, published industry region Helsinki the to according on average, country services sector public logistics, (25%) entire inthe than lower clearly are services public trade, wholesale services, financial and (16%) in manufacturing and of occupations proportions the hand, other the On country. entire the across – than –58% higher is significantly sectors trade retail and service private in the of jobs proportion the region, Helsinki the In Helsinki: 642,000 Espoo: Population: cities. in these concentrated are region Helsinki of the population of the majority the and activities, administration Jobs, area. metropolitan Helsinki inthe located are agencies government well as as headquarters company major Most 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 astronger have businesses logistics and trade wholesale industries, high-tech well as as development and research services, financial and professional Specialist cities. main other of the those from significantly differ region Helsinki of the areas specialist The of Commerce. Vantaa: 22.0% 12.0% ”The economic of the growth ”The than in the whole country” Helsinki region is stronger WHOLE FINLAND 4.1% 28.5%

Source: HelsinkiChamber ofCommerce 222,000 277,000 33.4% so called Rail Joker, a fast tram connection from Keilaniemi Keilaniemi from connection tram Joker, afast Rail called so of the construction The Kivenlahti. to extended is now being in late 2017 and operating started in Espoo Matinkylä to line Metro in 2015. Western completed The was centre, city the with areas residential significant several and airport Helsinki the connects which Road, Rail Ring The area. metropolitan Helsinki in the construction and growth the support network transportation public in the investments major Current level. at ahealthy remain also volumes construction property service and Commercial 2000’s. of the year record the in 2016, in turn, year that whole of the was, and exceeded had permits of construction amount the September, in 2017: continued of end the by already construction of residential growth The area. metropolitan Helsinki the in construction and economy the fuels growth region’s The growth. population natural on positive extent, alesser to although also, and migration internal and immigration on both is based growth population The 2050. by 775,000 some to increase to and by2026, 700,000 exceed to is expected of Helsinki population 1.9some The million. to 2050, by and 1.7 to inhabitants, million grow to expected is region inthe population the 2030, By inEurope. areas city growing fastest of the is one area metropolitan Helsinki The country. whole of that the outperform not did region Helsinki in the jobs of number and of production However, in 2017 growth the region. Helsinki in the sectors business performing best the were trade retail well as as services professional logistics, sector, In 2017, hospitality of Finland. whole construction, 3% to in the 7%, compared by increased production total period, same the In recorded. was cent per of one decrease a onaverage, country whole in the while region, Helsinki 2012 3% by in the 2017, and increased of jobs number the Between onaverage. country whole inthe than region Helsinki in the positively more developed have of jobs number the and of production amount the years, recent In Helsinki region is expected to grow to 1.7grow million by 2030” ”The population”The of the Commercia Warehouse/logistics, area Helsinkimetropolitan * Turku, Tampere, Oulu,Lahti,JyväskyläandKuopio Retail&hotels, Helsinki metropolitan area Retail&hotels, Helsinkimetropolitan Warehouse/logistics, othermajorcities* Warehouse/logistics, ofFinland rest Office, Helsinki metropolitan area Helsinkimetropolitan Office, Retail&hotels, othermajorcities* Retail&hotels, rest ofFinland Retail&hotels, rest l Office, othermajorcities* Office, property stock by region andpropertysector region by stock property Office, rest ofFinland rest Office, 01 025 20 15 10 5 0 airport with the Helsinki-Vantaa airport with passenger passenger with Helsinki-Vantaa the airport with airport Tallinn the connect would of €13−20 tunnel The billion. estimation cost atotal 2018, presented and in February published was tunnel of the study feasibility The inhabitants. 3million some with city atwin form to in order in Estonia Tallinn and Helsinki between tunnel railway 92-kilometer is a inplanning project infrastructure major Another Laajasalo and Korkeasaari. Kalasatama, with city inner the connecting bridge tram and alight traffic of Kruunusillat, construction the and Jätkäsaari, examp lines,to, for tram developing several include planned being currently projects development transport public Other made. be to is still rail Pisara of the construction the about decision final 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 2019.early Furthermore, in started be to is planned of Helsinki, parts northern the through go would which in Helsinki, Itäkeskus to in Espoo and public sectors, as well as from the EU. EU. the from well as as sectors, public and private both from financing to subject is still project The 15 some years. take would and earliest at the in 2025 start could work construction study, the the to According traffic. passenger and freight for both used be Gateway, would and aEuropean form and Baltica Rail to Finland connect would tunnel The use. land and mobility, productivity labour of agglomeration, in terms development regional and economy onthe impact apositive have to is expected tunnel The in Helsinki. in Pasila also and centres city in the stations the property marketsthe in property the Helsinki metropolitan area” metropolitan Helsinki is being planned between connections boosting are ”A rail tunnel connection Helsinki and Tallinn” ”New public traffic public”New traffic Source: StatisticFinland 2016 million sqm le le 66 5 Property markets in different regions – outlook for 2018 67 5 Property markets in different regions – outlook for 2018 OpenStreetMap Finland web services, licensed under CC BY 4.0. Map: Mini Map: 4.0. BY CC under licensed services, web Finland OpenStreetMap KTI. by map the to Additions area Helsinki metropolitan the in areas office Main ona is plan based master The people. 860,000 some to grow will inHelsinki population the that, 2050, by on aprediction inlate 2016 approved is based of Helsinki plan master city The Helsinki 5.1.1 in Helsinki. is located sqm 2million about this, Of sqm. 4million about to amounts area metropolitan Helsinki the of stock space Retail of offices. sqm 1million Vantaa about and 1.8 sqm million about accommodates Espoo in Helsinki. 5.9 is located some sqm million area, metropolitan Helsinki in the of offices stock total sqm million 8.7 around Of of Tripla). (Mall Pasila and (REDI) Kalasatama in developed being currently are centres shopping major New Kluuvi). and Citycenter Esplanad, Galleria Forum, (Kamppi, CBD Omena), Helsinki inthe well(Iso as as (Sello), Tapiola (Jumbo), Aviapolis Matinkylä (Ainoa) and (Itis), Leppävaara in Itäkeskus located are centres shopping Main in Vantaa. Tikkurila and in Espoo Matinkylä and Tapiola of Leppävaara, centres regional the include areas important the CBD, the to in addition 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 Myyrmäki & Martinlaakso Myyrmäki Kallio Tikkurila area Vallila Sörnäinen & Kalasatama Pitäjänmäki Leppävaara Otaniemi & Keilaniemi Otaniemi Aviapolis centre city Helsinki Tapiola & Niittykumpu Töölö Kilo &Mankkaa Kilo Ruoholahti Pasila Espoo centre Lauttasaari Olari & Matinkylä Area buildings Source: Statistics Finland No. of of No. 253 45 40 54 56 29 2220,958 22 29 18 26 28 32 37 1131,094 31 24 7638,245 57 70 71 Gross floor floor Gross area (sqm) 1,774,313 391,306 318,296 146,235 289,644 413,235 239,023 336,670 345,722 265,789 357,532 172,210 175,010 374,073 96,396 stry of Education and Culture. Data: OpenStreetMap contributors. OpenStreetMap Data: Culture. and Education of stry as well as several cultural buildings. cultural several well as as 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 Central Business District Herttoniemi. and Pitäjänmäki areas industrial and office traditional the well as as axis, Vallila−Kalasatama Pasila− extending the instance for include, supply property commercial increasing with Areas in 2050. in Helsinki jobs 560,000 be will there that predicts plan master The decision. court’s the about appeal an make to plans of Helsinki City the However, ontraffic. impact negative their to due boulevards planned of seven out four denied court administrative the as 2018, asetback, with met in early plans and the process, plan master inthe already debates serious caused plans boulevard city urban The use. residential -into park central of the parts and area airport Malmi the instance -for areas of new zoning the well as as workplaces, and of housing neighborhoods mixed new with boulevards city urban into routes traffic incoming of current transformation the includes plan the construction, residential enable to In order possibilities. cycling and in pedestrian improvements well as as hubs rail important most the emphasises plan the connections, of traffic terms city. In inner in the density building increased of the vision some €30/sqm/month. €30/sqm/month. some at stood rent average the and €34.50/sqm/month, to close increased agreements rental office of new quartile upper The 3.5% in 2017. some by increased offices CBD Helsinki for agreements rental new for index Rental KTI The growth. rental positive by is supported offices CBD of Helsinki performance investment the compression, yield to In addition onlevels well below this. closed been have properties best very of 2016. the since Transactions percentages of 0.5 adecrease showing at onaverage, 4.2% stood CBD in the 2017, property office an for yield prime the inOctober out carried Barometer Property RAKLI-KTI the In decrease. to continued have CBD in the properties prime for yields the Therefore, demand. rental secure and liquidity its by investors attracts CBD Helsinki The in 2017. out carried also were CBD Helsinki of the fringes onthe transactions office other several in Varma by late 2017. properties, prime these to Inaddition acquired was buildings refurbished of these One Esplanades. Southern and Northern the by instance for completed, recently just or underway are projects redevelopment major several buildings, in office needs occupier to In response partner. investment its as acting Hines with Assurances, CNP of 2017 French the to summer in sold the it was and Roschier, law firm the to let is mainly building The Kasarmitori. by completed was in late 2017, building sqm 16,000 a new when increased stock office CBD Helsinki the years, many After property. the in tenant main is the €190 for KPMG million. Ilmarinen from property office sqm 16,000 almost an acquired Immobilien Deka when Töölönlahti in the place area, took inFinland ever transaction office single 2018, largest the in 2018. completion for Inearly is due of which construction library, the central new the accommodate also it will and Hall, Finlandia and Hall Music City the as such buildings cultural major also are there area, Inthe station. railway main of the vicinity in the Töölönlahti the area towards extended been recently has area office CBD Helsinki The region. in the location office preferred most the remains and resilience its proved economy, CBD in the Helsinki the years challen the during Also refurbished. and maintained well it is mostly but 1900s, early and late 1800s in the built was CBD Helsinki in the stock office of the majority The offices. ministries’ and headquarters company some with –together firms service financial law firms, consultancies, business as – such services business-to-business offering companies mostly are centre city in the users Office transactions took place in the ”Market liquidity and rental growth attract investors attract ingrowth ”Several office property property office ”Several Helsinki in 2017” CBD the Helsinki CBD” Helsinki the ging ging

of 2018. half first the during completed be to is scheduled project Hotel Lapland the 2018. Bulevardi, in early On completion for is due in Kamppi George St. Hotel and completed, was 2017, In onUnioninkatu years. Haven of Hotel extension the in recent use residential or hotel either to converted been have CBD inthe buildings office several space, of office oversupply well as hotels, as for demand increasing to Due at 7.8% stood of 2017. end at the centre city in the of offices rate vacancy the Property, Catella to 2017. in 86% September at some According stood of offices rate occupancy the database, rental KTI the In CBD. in the also years in recent high quite remained has of offices rate vacancy the demand, rental healthy the However, despite of 4.6%. return average annual an produced area metropolitan Helsinki whole in the offices 9.0%, while to amounts offices CBD onHelsinki return total annual the 14% exceeded in 2017. period, offices five-year past the For CBD of Helsinki return total the Index, KTI Inthe submarkets. office other all outperform to continued offices CBD Helsinki rents, increasing and yields decreasing of both aresult As and hotel use. use. hotel and residential into redeveloped is being of Kesko headquarter former the where in Katajanokka, CBD of the vicinity the in is underway project conversion Another project. in the invested has fund hotel. Exilion’s room a500 to converted be will station railway main at the office head Group’s VR use. hotel to converted be to also onUnioninkatu property office an acquired Advisers 2017,In Estate Real Barings ”Yield compression continued in the Helsinki in 2017” CBD

Photo: City of Helsinki /Tero Pajukallio 68 5 Property markets in different regions – outlook for 2018 69 5 Property markets in different regions – outlook for 2018 some €115some sqm. per to in 2017, increased positive rent average the turned and rents retail CBD’s the for outlook the Barometer, Property RAKLI-KTI Inthe this. than higher significantly are rents locations best in the and premises small For month. per €125 at some sqm per stood agreements rental retail of new in late 2017. at 96% stood quartile CBD in the upper The space of retail rate occupancy the database, rental KTI the In premises. best the for tenants find to easy it is very and low CBD, in the remains space retail of vacant amount The locations. shopping important most the around developed been have areas pedestrian extensive years, recent In streets. two these between is located store department Stockmann traditional The streets. two these connecting streets the well as as Esplanade Northern the and Aleksanterinkatu include streets shopping main The Allianz. by is owned centre of the half other The million. €250 to close was price transaction The fund. Estate’s Real Barings from centre shopping Kamppi of the 50% acquired who Estate, Real TH by out 2017 carried was in CBD inthe transaction property retail largest 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 Helsinki inthe centres shopping Main da open LITE Finland &ESRI KTI. by map the to Maanmittauslaitos Additions CBD Helsinki the Helsinki have CBD been ”Several office buildings office ”Several in converted into hotel use” ta, licensed under CC BY 4.0. BY CC under licensed ta, by Kesko Group. Kesko by operated and rented and by Sponda owned centre, shopping Ruoholahti in the is concentrated in Ruoholahti space Retail funds. international some well as as companies property and institutions domestic include area in the Investors database. rental low KTI at in the 87% quite remains rate occupancy the but tenants, attract area of the premises office efficient and Modern onaverage. month per sqm per €23 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 the at CBD Helsinki the near area office is a modern Ruoholahti Salmisaari – Ruoholahti centres. in shopping space more up taken have services consumer other and cafes is restaurants, that trend Another recently. premises of large users some attracted also have CBD in the centres shopping hand, other the On locations. expensive most in the stores opening by market Finnish the entered have brands luxury international many hand, one the On of years. couple past the during markedly changed has CBD Helsinki in the premises of retail base tenant The ”Restaurants and cafes take ”Restaurants up more space in shopping centres” construction of a 17,500 sqm office property, which is rented is rented which property, of a17,500 office sqm construction 2018 in early the by started was Jätkäsaari, to next area, land Telakkaranta industrial and old of dock the development The process. procurement the concerning acomplaint to due SRV, by planned also postponed been has building, old the warehouse bunker, Jätkäsaari called so the of reconstruction The in 2018, building. ahotel and started be to planned building, office an comprise also will block The property. of aresidential construction the with area the in started has block Wood of SRV’s City development The 2030. by inhabitants 18,000 some accommodate to is planned area The projects. owner-occupied well as as housing, rental non-subsidised and subsidised both accommodates area The completed. were dwellings in2017, and Area, 1,100/ West than more new Harbour Jätkäsaari in the active remains development Residential in 2017 opened area. in the was terminal passenger a new and in Jätkäsaari, 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 of 2018. half latter in the completion for is due project The inSalmisaari. Campus Ruoholahti of its phase third the developing Technopolis is currently million. €39 for in Ruoholahti property ahotel acquired Balder AB Fastighets Swedish the and area, in the property office million in a€29 invested Antilooppi Also, in Finland. investment first is Skandia’s This TRIUVA. by managed afund from property office sqm a14,000 acquired who Fastigheter, Skandia Swedish the by out in 2017 carried in Ruoholahti was transaction largest The KTI Renta KTI offices 10 12 14 16 18 20 80 0 0 0 0 0 0

1995 Rental index(HelsinkiCBD1993=100) 1996 Telakkaranta has area been

”The construction of construction the ”The 1997 1998 1999 l index 2000 2001 2002 started” started” 2003 , 2004 Helsink 2005 2006

Source: KTIandStatisticsFinland 2007 2008 i

2009 CBD 2010 2011 2012 2013 2014 2015 2016 2017 Me Pasila –Vallila –Kalasatama restaurants. and cafes with shore sea in the apromenade as well as buildings, residential accommodate also will area The project. in the investor as remain also will and area, in the plots the owns Skanska Agency. Chemicals European the to out by YIT. The project comprises the 85,000 sqm Mall of Mall sqm 85,000 the comprises project The YIT. by out carried being is currently Tripla project three-block the stat railway current of the surroundings in the area, Pasila Central Inthe redevelopment. major under is currently Pasila year. per passengers 47 million some with in Finland hub railway busiest the become to is expected station Pasila respectively. 8,600 and of 25,000 figures current to compared residents, 30,000 and jobs 50,000 some accommodate will area the plans, long-term city’s the In significantly. increase to planned are in Pasila stock property residential and commercial Both companies. media and service business and companies insurance agencies, city and government including users, of offic mixture a colourful accommodates currently Pasila station. of the south area machinery old railroad the and Pasila Northern the Ilmala, developing the Pasila, Western and of Eastern submarkets traditional the including areas of seve consists Pasila centre. city of the north area market property multifaceted and hub railway important is an Pasila line. tram high-speed Kruunusillat new the and metro rail, connect would which Kalasatama, to Pasila from planned is being connection tram Anew strategy. growth of Helsinki City in the of growth” “axis an as is named area Pasila−Vallila−Kalasatama The Vuosaari. to operations its moved harbour the when development for released was land where area, Kalasatama developing is the there Sörnäinen, supply. to Adjacent office amultifaceted by characterised are areas Vallila. and These Sörnäinen Pasila, include centre city of the out somewhat situated areas office traditional Other €/sqm/month 10 15 20 25 30 5 di

1996 a n project in is Pasila” underway 1997 1998 offic ”The three-block”The Tripla 1999

2000 e Pitäjänmäki Leppävaara 2001 rents 2002 2003 2004 ,

2005 al Ruoholahti Helsinki CBD

2006 l a 2007 2008 greem 2009 2010 2011 en 2012

2013 ts

Source: KTI 2014

2015 2016 ion, ral ral 2017 e e 70 5 Property markets in different regions – outlook for 2018 71 5 Property markets in different regions – outlook for 2018 Vallila and another in Sörnäinen from OP Group. Group. OP from in Sörnäinen Vallila another and in building office one acquired who Antilooppi, by well as as in Elimäenkatu, properties office two bought who AREIM, by out in 2017 Vallila in the carried area were transactions Major 2018. of half first in the completed be to scheduled and space, office of lettable sqm 8,700 some comprising project, Fredriksberg of their phase first the developing is currently NCC area this in Also Tax Finnish the to Administration. is rented which project, 2017, 17,000 office sqm another completed group the in and sqm, 130,000 some comprises complex headquarter Group’s OP companies. telecommunications and of banks offices head example, for accommodating, currently Pasila, to next area light industrial and office Vallila is atraditional 93%. was in 2017, rate sqm occupancy the and €18−20 at some stood per agreements in new rents average the database, rental KTI’s In area. in the stock modern and older between in 2017.Pasila significantly levels vary Rental in decrease to continued space office of vacant amount The project. the for phase asecond construct to plans also Hartela HANSAINVEST. to sold been has which building, in the tenants the are HSY Authority Services Environmental Region Helsinki and Hartela in Ilmala. building office sqm In2017, area. in the 11,600 an completed projects other Hartela has also company the and planned, being are three another and buildings, office three comprises currently project Ilmalanrinne Sponda’s area. in the investor and is developer amajor 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 also are There Bonava. with co-operating are NREP and Fira and project, in the partner SATO is Skanska’s Sponda. company investment well as as Bonava, and YIT Skanska, developers property major of the projects comprise finalists 2018. The of in late 2017, autumn in the made be will decision the and chosen were finalists four The Tower of the part Area. western in the planned Area, Start-Up sqm a40-50,000 for executor an at finding aims also competition The buildings. 15-floor in at least space commercial and office of residential, sqm 150,000−200,000 include will area The chosen. be will Area Tower Pasila Central the develop to aplan competition, the In of Helsinki. City the and State of the project ajoint as underway is currently High-Rise” “Helsinki title the under competition construction and design Tripla, to international an Next in 2020. completion for is due which Tripla in the property, hotel invested fund 2017, In project. in the Exilion’s co-investors YIT’s are Onve company investment and Fennia company insurance (Etera), Ilmarinen company Pension insurance rented. been have premises retail of the 70% some late 2019, currently and in of Tripla opened Mall be will The construction. is under cars 2,300 for facility aparking Also dwellings. residential 400 some well as as rooms, 430 with a hotel sqm, 50,000 some totaling buildings office Tripla three centre, shopping increased in Pasila in 2017” ”Occupancy rate”Occupancy of offices st st

tower. In addition to SRV, investors in the REDI shopping shopping SRV, to REDI tower. in the addition In investors seven residential towers and one office/retail/residential centre, shopping sqm a60,000 comprise will which centre, REDI the constructing SRV is currently In Kalasatama, inhabitants. 3,000 some accommodates currently area The dwellings. occupied owner- and rental both comprises stock Residential projects. residential with started in Kalasatama work Construction jobs. 10,000 and people 25,000 some accommodate to is planned area the 2040, inabout 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 80%. at above slightly stand recently, and decreased have in Vallila Sörnäinen rates and Occupancy month. per sqm per €20 above clearly are they stock, modern inthe month, whereas €15 per sqm per around are rents buildings, older the In in Vallila Sörnäinen. and stock office modern and older between markedly vary Rents project. office K6 sqm 12,000 the developing is currently Skanska In Sörnäinen, buildings. office refurbished many accommodates currently which area, harbour and industrial a traditional Vallila to is Sörnäinen, Next couple of company headquarters are 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 month. per sqm per €20 above below and vary 2017. in Ruskeasuo rents Office in buildings Park Business Aitio in the invested Yield fund OP-Rental Park. Business Aitio of NCC’s buildings two the well as as project, ManskunRasti of Skanska’s phases two first the example, for accommodates, currently area The suppl space modern mostly with area office Ruskeasuo developing is the by Mannerheimintie Pasila, to Next Ruskeasuo in Kalasatama. Division Environment Urban established newly its for building office new amajor start to is about of Helsinki City the Also, user. main the be will Kesko where property office sqm 2018. a35,000 is developing Varma in early in 2017, phase park third the start to plans and business Rantatie of its phase second the completed Invest Lindström project. in the investor is the Immobilien Deka in late 2017. completed was inKalasatama centre well-being and health sqm 20,000 of Helsinki’s City The in Kalasatama. elsewhere active is also construction property Commercial of 2018. autumn in the opened be will centre The funds. life and LocalTapiola’s insurance and funds OPGroup’s Ilmarinen, fund pension include centre ”New offices being offices ”New developed in Kalasatama” CDF CDF y. developing residential areas. areas. residential developing rapidly also are areas Rastila adjacent the and Vuosaari Columbus. centre shopping sqm 21,000 is the station metro in 2017. in Vuosaari Vuosaari the to building Next terminal a completed MetsäFibre area. in the space logistics of the owners main of the is one Logicor stock. property logistics extensive an well as as jobs 2,000 about accommodates currently harbor The years. in recent rapidly developing been has that area is another area, harbour new the Vuosaari, made. been yet not has phase sqm 36,000 second, in late 2017. the for decision Easton investment centre An shopping of the phase sqm 20,000 first, the completed Kesko metres. of 115,000 square area leasable agross with Europe in northern centres shopping largest of the is one centre shopping Itis The living. and retail both 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. of the vicinity in the buildings residential some develop also will YIT and Hartela part. existing property in late 2017, and eQ’s fund is the investor in the new the acquired Pension Fund Yleisradio and companies insurance life Aktia and Fennia apartments. serviced some and restaurants, and cafes several of Helsinki, City of the facilities service hypermarket, aPrisma instance for accommodate, will centre The centre. Megahertsi existing the with connected be will which station, metro the by centre Hertsi sqm 20,000 of the construction the started just have Hartela and YIT area. in the small is rather of offices stock total the although years, several for high remained has rate vacancy office The stock. residential extensive is also supply. There retail and office with area diversified a more into transformed gradually has that area old is warehousing an line. Herttoniemi metro the and route radial eastern the both to adjacent CBD, Helsinki of the east kilometres five area is an Herttoniemi –ItäkeskuHerttoniemi area. in the property office sqm in a26,000 invested fund AREIM’s space. of lettable sqm 8,000 some comprising area, in the Garden Business Ultimes of phase second of the construction the started Peab Invest 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 opportunities. of use change for looking are investors lowto demand, in late 2017. 60% some at only stood rate Due occupancy 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 1990–2000s. inthe use office mainly into converted was that area old industrial is an centre, city Helsinki of the north kilometres seven situated Pitäjänmäki, Pitäjänmäki s −Vuosaari Pri and Vantaa and phase E of the Alberga Business Park in Leppävaara, as well as in Leppävaara, Park Business Alberga Eof the phase the in Espoo: completed were 2017,In projects office two in late 2017. rented were investors large by owned premises office 78% of Espoo’s some only database, rental KTI In the line. Tapiola and Keilaniemi metro new the by include rates occupancy healthier with Areas high. rather remains rate vacancy in Leppävaara, Also areas. Olari-Niittykumpu and Kilo-Mankkaa the instance, for include, vacancies high from suffering Areas years. few past the for in Espoo areas many for aproblem been have rates vacancy office High properties. and areas in different rates vacancy and levels of rental development diverse inthe seen be also can which is multifaceted, stock property commercial city’s The earliest. at the in 2022 is completed, extension the when metro the by served be also will Espoonlahti, centre, fifth line. The metro western by the are Matinkylä-Olari railway, Tapiola and western the by and are centre Espoo and Leppävaara centres: regional five within scattered stock city, property has biggest second Finland’s Espoo, 5.1.2 Espoo constructed. being is currently 2017, Kivenlahti to extension the and in late opened was line metro new The in Espoo. stations new of the vicinity inthe markets property the boosting been has line metro western new of the construction The project. in the invested has Keva in Leppävaara. construction under was Finland Ramboll firm consultancy and planning of construction year, office of the end head At the the Properties. University Aalto by inOtaniemi project conversion AGrid the as 10 15 20 25 30 35 €/sqm/month 5 me

1995 office ren office

1996 new line metro western ”The 1997 operationsstarted in 2017” 1998 1999 2000 2001 2002 Helsinki ts 2003

2004 Helsinkiin 2005 Source: RAKLI-KTIProperty Barometer 2006 Espoo 2007 2008 2009 Vantaa 2010

2011 ,

2012 Espoo 2013 2014 2015 2016 2017 (autumn 2018) 72 5 Property markets in different regions – outlook for 2018 73 5 Property markets in different regions – outlook for 2018 building right on the plot. The existing building will remai will building existing plot. on the The right building unused the exploit also it and redevelop will who Regenero, firm development property the by acquired was property Tower The vicinity. in the Fortum called so the building, office old head company’s the released move of Fortum The Fortum. also recently most and, Mobile, Microsoft of Tieto, offices head the accommodates it currently and Corporation, of Nokia office head the as known originally was property €164 for The million. Management Asset Deutsche by sqm 31,000 comprising buildings office of two acquisition in 2017 in Keilaniemi the was transaction largest The Catella. to 8%, according at some stood rate of 2017, end At the efficiency. space vacancy Keilaniemi the increased by driven been have of which many lettings, major some been have recently, there and in Keilaniemi demand office boosted has line metro western of the completion The use. centre congress and residential office, combining projects hybrid well as as buildings residential high-rise some including area, inthe planned being projects development property major several are There Ruoholahti. in slightly than lower levels are rental Average concepts. park business modern some well as as properties office head major several accommodating area office is a modern Keilaniemi areas. station new inthe is active construction residential and Retail modern. is mainly areas in these stock Office stations. metro new accommodate −all Matinkylä and Niittykumpu Tapiola, Otaniemi, −Keilaniemi, Espoo in southern submarkets property commercial established five The Matinkylä TapiolaKeilaniemi – Otaniemi – – both tenants and investors in several major corporate head head corporate major several ”Keilaniemi attracted offices ”Keilaniemi accommodates offices” 2017” n campus. Technopolis’s Innopoli including companies, at high-tech targeted parks business well as as institutes research several accommodates also area Otaniemi The space. of retail sqm 6,000 some include will of 2018.The half centre first in the completed be to scheduled and construction under currently is building campus and centre metro University Aalto sqm 33,000 The companies. at startup targeted premises office to converted was building educational sqm 25,000 former the project, the In completed. was building AGrid of the 2017, In premises. of new development redevelopment the and buildings of existing redevelopment both includes centralisation The area. in the campus main its centralising it is currently and in Otaniemi, is located University Aalto Keilaniemi. to next is located area Otaniemi The in 2018. completed be to is expected project tunnel metre 440 The development. residential for opportunities the improve and area of the attractiveness the increase both Tapiola, and to Keilaniemi in order between atunnel into I Road Ring the moving is currently of Espoo City The in 2017. in Keilaniemi properties office in four invested also Partners Property Alma Swedish The Accountor. firm accounting the be will tenant main the and use in office development also remains active in the Tapiola in the active area. remains also development Residential redeveloped. been has of which part a large stock, office adiversified Tapiola accommodates also The area space. of retail sqm 50,000 some comprise will centre in 2019, completed the When construction. is now under centre shopping of the phase third the and demolished, been has building store department Stockmann former the premises, new these to move of the Stockmann Following in2017. completed was space, of retail sqm 20,000 some comprising centre, shopping Ainoa of the phase second 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 completed in Tapiola in 2017” completed in Ainoa shopping centre was was centre shopping Ainoa ”The second phase”The of

Photo: City of Espoo area Esp Occupan rate occupancy Office industria well as an extensive entertainment service supply. service entertainment extensive an well as as cafes, and restaurants 40 almost with area a restaurant of Espoo, City of the centre service sqm a6,000 instance for accommodates, centre The space. of lettable sqm 100,000 over comprises currently centre shopping The station. metro Matinkylä the accommodates it also and extension, and redevelopment amajor undergone has centre shopping Omena Iso Citycon’s of Espoo. areas southern and western from connections traffic public the for a hub is also station Matinkylä buildings. office modern some accommodates also which in Espoo, centres retail significant most of the one is project, line metro current of the stop final the Matinkylä, project. in the investor the in 2017. opened was is Yield Niitty OP-Rental fund centre retail sqm 7,000 the station, Niittykumpu the In facilities. sports several accommodating Tapiola the park, to sports next is located station Urheilupuisto The Niittykumpu. and Tapiola Urheilupuisto after are stations two next The 10 10 70 75 80 85 90 95 % 70 75 80 85 90 95 % 0 0 oo 2003 2007 and Vantaa and Office 2004 Helsinki l cy 2008

2005 Helsink the in rate 2006 2009 Retail Espoo 2007

s 2010 2008 o Vantaa f 2009 Industrial 2011 offices

2010 2012 s in Helsinki,in 2011 i metropolitan metropolitan 2013 Source: KTIRentaldatabase Source: KTIRentaldatabase 2012 , retai 2013 2014 2014

l 2015

2015 and 2016 2016

2017 2017 Pikkulaiva centre. A new 42,000 sqm Lippulaiva centre is centre Lippulaiva sqm 42,000 Anew centre. Pikkulaiva sqm 10,000 atemporary by replaced and demolished was centre shopping Lippulaiva the where area, in the project amajor out is carrying Citycon area. Espoonlahti is the line, metro of the extension planned the along west, Further Liila shopping centre was acquired by eQ’s fund in 2017. sqm 23,000 The centres. shopping Liila and Merituuli the well as as properties retail box big mainly accommodates currently area The of Suomenoja. area manufacturing light and retail traditional is the West of Matinkylä project. the to connected hall aswimming construct will of Espoo City The property. hotel in the invested has Veritas company insurance pension the and project, in the developer is the Lujatalo underway. is currently facilities parking and hotel, residential comprising project development ahybrid Omena, Iso to Next Leppävaara stand at some €20 per sqm per month. month. per sqm per €20 at some stand Leppävaara in offices for rents Prime Catella. to 17%,some according at high, remains in Leppävaara rate vacancy office The centre. shopping Sello of the extension sqm 10,000 planned is pipeline the in the project construction Another by Keva. bought been has which property, the is developing Hartela 2019. in early completion for scheduled and underway is currently Finland Ramboll firm consultancy and planning technical of the building office new The property. Cello in Leppävaara: an unnamed investor bought the Quartetto out carried was transaction 2017,In property office one only inlate 2017. phase final and fifth its completed Park Business Quartetto and SRV’s Derby Business Park. The Alberga Hartela’s Polaris, joint project Lemminkäinen’s and NCC’s Alberga, NCC’s including buildings several with complexes park by business is characterised area Leppävaara The supply. residential modern some and premises retail older some centre, shopping Sello sqm 100,000 the stock, office a diversified comprising area, Leppävaara is the railroad western the by and I,Turku motorway Road Ring along of Otaniemi, North Leppävaara apartments. 550 residential some and terminal bus station, ametro comprises also project The in 2020. completion for scheduled and construction under currently ”Major development projects projects development ”Major underway in theunderway Espoonlahti ”Office vacancy rate vacancy remains”Office comprises sqm over 100,000 ”Iso Omena ”Iso currently high in Leppävaara” in high of lettable space” of lettable area” 74 5 Property markets in different regions – outlook for 2018 75 5 Property markets in different regions – outlook for 2018 has developed rapidly during the past few years. The main 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 boosted has Line Rail Ring of the development The centre Tikkurila traditional in wellthe as as surroundings, its and airport the around concentrated are areas market property commercial important Vantaa,In most the 5.1.3 Vantaa centre. in Espoo is high activity construction in late 2017. confirmed Residential finally was plan the but issues, planning to due years several for postponed been has project The area. in the center shopping sqm a 110,000 planning are HOK-Elanto and Kesko units. retail large other and stores electronics car, furniture, mainly comprises space retail III, Road Ring and Turku of the motorway junction at the centre Espoo to next situated area, Lommila the In in2017 million. €30 for centre shopping Entresse the acquired Barings centre. in Espoo located are Entresse and Espoontori centres shopping The route. railway western the alongside and Turku the to motorway 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. Perkkaa adjacent in the and in Leppävaara high remains activity construction Residential Mini Map: 4.0. BY CC under licensed services, web Finland OpenStreetMap KTI. by map the to Additions projects under construction in the HelsinkiOffice metropolitan area . stry of Education and Culture. Data: OpenStreetMap contributors. OpenStreetMap Data: Culture. and Education of stry the junction of Ring Road III and Hämeenlinnanväylä and and Hämeenlinnanväylä and III Road of Ring junction the in located area in late 2018. vicinity, the In in Vantaankoski completion for due are projects Both building. another with Helsinki-Vantaa the Campus Technopolisand is extending project, Aviabulevardi of the phase second the developing is current CDF Skanska located. are complexes park business several where III, Road Ring by and itself area airport the in both area, in the is abundant supply space office Modern Group. Posti for underway is size same of the building terminal anew area, in the Also in 2017. project the acquired fund Aberdeen’s in Viinikkala; construction is under Logistics Wihuri for property logistics sqm A25,000 area. airport in the completed was terminal cargo 2017, In sqm years. 35,000 new inrecent Finnair’s area in the active been has development supply. Logistics space modern rather with hub logistics important an form also areas Viinikkala supply. adjacent the and Aviapolis retail abundant and stock hotel increasing an premises, office modern includes Aviapolis area in the stock property Commercial connections. railway main and centre city the with area the linking Aviapolis, thus in well as as airport at the stations has Line Rail Ring 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 in the inhabitants 18,000 some currently are There companies. property several and developers its daughter company LAK Real Estate, all major property property major all Estate, Real LAK company daughter its and of Vantaa, Finavia City the include area in the players ly ly several property investors are carrying out new investments investments new out carrying are investors property several and infrastructure, its of Vantaa is developing City The 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 ahub as position Tikkurila’s buildings. administration city’s of the most accommodates also Tikkurila Vantaa. in area retail and office important most –the area airport the –alongside and centre urban main is the Tikkurila Tikkurila gardening. and furniture vehicles, motor for outlets as such units retail box big- and park retail by favoured areas retail important also are Tammisto and areas Pakkala the area, Aviapolis of the part southern the In area. residential increasing an is also and properties, office and logistics some units, retail large of Aviapolis, accommodates east just area, Koivuhaka The rooms. 540 comprising in Finland hotel largest the become inlate 2018, completed it will When rooms. new 230 by centre in the hotel the extending is Varma currently owner centre’s The premises. leisure and hotel, office comprising centre leisure Flamingo is the of Jumbo neighbourhood immediate In the area. inthe centre retail major is the centre shopping Jumbo sqm 85,000 The Estate. Real LAK by use hotel into reconstructed be will terminal, the from metres 100 some just building, old office An started. was Hotel Airport Helsinki Scandic of the 2017, construction the early In area. Aviapolis inthe is increasing supply Hotel centre. urban competitive internationally an as Aviapolis build further to in order airport the around areas land the developing for prerequisites company’s the improve will base shareholder of the extension the Finavia, to According share. a49% with company of the owner as remaining Finavia with Estate Real of LAK shares acquired Pontos Oy company investment Finnish and NREP late 2017,In manager fund Nordic the III. Road Ring the along west further property park retail inFresko well as as airport, eQ also invested in Vantaanportti Retail Park close to the eQ’s fund acquired two business park properties in the area. and I property, Aviabulevardi sqm 9,000 in the invested 2018, In Niam investors. attract to continue Aviapolis offices €17−19/sqm/month. at some stand rents Office Catella. to 8%, markedly, according some to decreased rate vacancy in in Aviapolis 2017, the strengthened and demand Office Pressi. building office a new of construction the start to SRV is about Rail, Ring the by ”Office, residential and retail ”Office demand”Office increased in development is active in Aviapolis in area 2017” Tikkurila”

station; this is a joint project between Skanska, NCC, NCC, Skanska, between is ajoint this project station; Kivistö new the to close centre shopping sqm 110,000 area in the 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 the alongside motorway Hämeenlinna the and III Road Ring to close is inKivistö, area development Vantaa’s biggest Kivistö area. in the warehouse Ruokakesko of the extension the completed Logicor and property, logistics and office sqm a20,000 completed 2017, In area. Logistics HUB warehouse and logistics established an is Hakkila, of Tikkurila East area. in Tikkurila active is also development Residential buildings. administrative inits projects redevelopment extensive out carrying of Vantaa is also City The premises. servic and restaurant instance, for accommodate, also will property multi-use the phases, in late 2018. latter the In completed be will space of office sqm 5,000 some whereby Silkki, in Tikkurilan project conversion property industrial old of an phase first the out is carrying later. Renor phase another with project the continue to plans and premises, hotel and retail office, comprising property multi-use sqm 10,000 in2017. almost an is developing Management Sponda Capital Cerberus to sold Citycon portfolio of the part was centre shopping vicinity, Tikkuri the In the terminal. bus and station train Tikkurila the accommodates also Dixi 2017. in early completed was investors, are Etera and fund NREP’s where Dixi, centre office and retail The area. in the The area also accommodates some older office stock. office older some accommodates also area The of Myyrmanni. north slightly in Myyrmäki, located is also IsoMyyri, sqm 15,000 the centre, shopping other Citycon’s station.. the to next centre, in Myyrmäki is located centre shopping Myyrmanni sqm 40,000 The inhabitants. 15,000 some accommodates currently area growing The Line. Rail Vantaa Ring the by in western centre is aregional Myyrmäki Myyrmäki underway. is development residential rental abundant in Kivistö, Also terminal. abus accommodate also will which centre, Kivistö sqm 150,000 of the apart be will centre shopping The centre. inthe services its for space some rent to committed of Vantaa has City The of 2020. end the by completed be to in 2018, is estimated and started be to is now planned phase sqm 35,000 first the but postponed, been has project of the start The Kesko. and HOK-Elanto Photo: YIT is a e 76 5 Property markets in different regions – outlook for 2018 77 5 Property markets in different regions – outlook for 2018 Tampere region in total: 380,000 380,000 in total: Tampere region countries Nordic in the city inland attracted recently has that city Tampere old industrial is an Tampere Tampere: 230,000 Population: areas. areas. pedestrian and light transportation mainly into turned be will itself centre the and planned, being are facilities parking underground new centre, city the In Pyynikintori. with centre city of the side eastern in the area hospital university the and south in the 2121. Hervanta combine lines two The in completed be to scheduled construction, under currently is tramway A new vicinity. in the development residential enables and centre city inthe traffic the lightens tunnel inlate 2016. The centre city of the side northern on the opened −was kilometres 2.3 tunnel− road longest Finland’s in Tampere. is developing network transportation The 14.3%. at some in 2017, currently stands and however, which, decreased unemployment, high relatively from suffered has region the years, recent In area. in the environment business the in developing cooperation active pursuing municipalities of eight consists Tampere region employees. 5,000 some and students 35,000 have will of 2019. university new beginning in the The merged be to planned are Sciences of Applied Tampere University and Tampere Technical Tamperethe University, University city, where Tampere is auniversity technology. healthcare and automation and machinery technology, information include Tampere in the region areas expertise Technology companies. service well as as businesses technology high biggest the of Helsinki; 170 north km Location: Tampere Oulu, Turku, and Lahti Kuopio Jyväskylä, centres:5.2 growth Other Tampere, enables more intensified land is the largest inland city in the Nordic countries. countries. Nordic in the city inland largest is the ”Developing infrastructure infrastructure ”Developing use inuse Tampere centre” Tota l return Rest ofFinland2.2% Whole Finland6.6% Jyväskylä 5.2% Tampere 6.2% Helsinki 8.1% s Kuopio 5.4% Vantaa 7.5% Espoo 6.4% Turku 8.7% Lahti 0.9% Oulu 7.4% in Finnis in -6 -4 -2 0 2 4 6 8 -6 4 0 2 -2 -4 10 Capital growth, % Capitalgrowth, h cit ie s 2017 Income return, % Incomereturn, started with the deck construction work in late 2017. work SRV construction is deck the with started was project jaAreena) (Kansi Arena and of Deck amajor construction the station, railway the to next centre, city In the investors. estate real international and domestic both attracted has region The region. Helsinki the outside in Finland area market property active most is the Tampere region The 85,000 sqm under construction at the end of 2018. end at the In construction under sqm 85,000 some inTampere with active is currently construction property Retail Hämeenkatu. to next centre shopping Koskikeskus in the and Hämeenkatu, street, main the along in Tampere is situated space retail expensive most The station. railway the to next property office sqm of a 13,000 construction the start to is about year. of the end at Technopolis the completed was property and retail a 7,500 office, sqm where area, Finlayson In 2017, in the project adevelopment Varma completed 15% stock. of 2017,end total almost of the corresponding at the space, office of vacant sqm 130,000 some were there Catella, to in Tampere. According significantly increased recently has rate vacancy the cities, major in other Unlike month. €15 per at some sqm are per typically rents the stock in older month, whereas per sqm per €20 around levels are rental buildings, in modern locations office best the In Technical the University. alongside in Hervanta as well as hospital University the near in Kauppi centre the to Tulli, close and in areas of Hatanpää areas in the centre, city in the is found space office of 2016. end the Modern 1.1 some to at sqm million amounted stock Tampere office project. Arena multi-use in the involved also of Tampere is City facilities. parking well as as premises retail and office a hotel, some towers, residential five people, 13,000 for arena amulti-use comprise will complex sqm 120,000 The project. in the invested have companies insurance Group’s OP and LocalTapiola developer, and the , al l property remains high in Tampere” in high remains ”The office vacancy rate vacancy office ”The Source: KTIIndex % care care included assets in Tampere. assets included also which portfolio, aresidential acquired Assets - Real Management Investment AXA portfolio. the to acquired was centre Tullintori shopping the Kiinteistöt, of Agore establishment of the in Tampere, a part as and holdings significant has Sponda in Tampere. instance, For assets included that deals portfolio large by boosted was volume The million. in 2017, of €850 volume arecord reaching in Tampere significantly increased volume transaction The in Tampere. steadily increase to continued have rents Residential 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 rooms. of hotel supply the increase also will project Arena and Deck The project. in the investor is the Keva Tampere in Tampere, to Hall. in Finland close hotel first its open hotel. late 2017, it In that will published Marriott Torni of the completion the to due markedly, instance, for increased in Tampere has stock Hotel airport. the to close of Tampere and south in Pirkkala, mostly concentrated been has construction property industrial years, recent In of 2018. half first the during completed be to projected are projects these All in Nokia. project ahypermarket well as as is underway, centre shopping Ideapark the for extension sqm of Tampere, a15,000 south Lempäälä, In centre. city in Tesoma, of the west centre retail Westeri the developing is Kesko centre. shopping Ratina sqm 53,000 the complete to is about Sponda Koskikeskus, to next area, Ratina the space is in construction under ”Some 85,000 sqm of retail”Some Tampere region” Pri me 10 % 4 5 6 7 8 9 office yield office 1995 1996

1997 Jyväskylä Tampere Oulu Vantaa Espoo Turku Helsinki 1998 1999 2000

2001 s

2002 majo in 2003 2004 2005 of employed increased for instance, in construction, many many in construction, instance, for increased of employed in 2017, and improved, recently has number the situation 14.2%. at some However, economic the stands currently and in Oulu, high remains Unemployment of 2010s. years early in the than lower significantly is currently region of the of exports volume total the and sector, in this restructurings the from suffered has region The services. information and software engineering, example, for it: supporting services the and manufacturing, in electrotechnical is specialized Oulu 13% at about jobs. of all currently standing on average, country whole in the is than lower jobs of industrial share The region. of the specialities as regarded are education well as as services health and social sectors, technology other services, technology Information services. is on structure economic region’s Oulu of the emphasis The network. Europe Arctic of the is part city The country. entire of the area of the one-half –about Finland of northern all 247,000 in total: covers region influence Oulu whose city technology and science is auniversity, Oulu municipalities. neighbouring of 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 201,000 Oulu: of Helsinki north km 600 Population: Location: Oulu Campus properties to eQ’s fund in autumn. Technopolis Finnmedi the VVT. sold by property office Ratinankaari the and AB, Kielo established newly the by inHatanpää property office of an acquisitions the instance for in 2017 out included, carried transactions asset single Large

2006 r

2007 cities Finnish 2008 ”Large portfolio deals”Large boosted

Source: RAKLI-KTIPropertyBarometer 2009

the transaction volume in 2010 2011 2012 2013 2014 Tampere” 2015 2016 2017 (autumn 2018) 78 5 Property markets in different regions – outlook for 2018 79 5 Property markets in different regions – outlook for 2018 the increase in jobs in the IT sector. However, vacancy rate rate However, sector. vacancy IT in the in jobs increase the to due mainly strengthening, is currently demand Office projects underway. construction office no are there moment, At the centre. city of the south just area Taka-Lyötty inthe one and Linnanmaa in one in Limingantulli, one completed: were sqm, 14,000 some totaling 2017, In properties, University. office three Oulu and companies high-tech several accommodates which centre, city of the north area Linnanmaa the and centre city of the east Peltola just centre, city the to in addition include, areas office important most The sqm. 640,000 some to amounts of Oulu stock office total The market. office inthe player important is an inOulu, founded originally Technopolis, company property listed The strong. quite remained has market in the position whose funds, pension domestic attract to enough is large market estate real Oulu’s country. of whole average the exceeded services communication and in information growth The in wellmanufacturing. as as sectors service Preva cit 10 15 20 25 30 0 5 ie /sqm/month Based on lease agreements inKTIdatabase. Based onleaseagreements s , Lower quartile il Upper quartile

Helsinki Median i autumn 2017 autumn ng

Espoo ren office

Vantaa

Tampere ts Transactio metropolitan area area metropolitan Turku in MEUR ma Oulu 100 200 300 400 500 600 700 800 900 Source: KTIRentaldatabase 0 jo

Jyväskylä r T 2013 n urk Finnish Finnish Ta u volu Kuopio 2014 me Lahti mp r Ou ere i 2015 n citie lu Residentia inde Turku 2016 premises due to both abundant new construction and the the and construction new abundant both to due premises of retail oversupply from suffered has centre city Oulu The in Limingantulli. lower slightly are and areas, Peltola Limingantulli and centre, city inthe month per €15 at some sqm per stand rents 10%. Office over remains performed less favorably compared with other major cities, cities, major other with compared favorably less performed years, in recent has, in Oulu market residential rental The in 2017. completed were centre city the outside projects owner-occupied smallish some only and slowed down, now has construction Retail premises. larger month for per sqm per €30 at some and premises, small for month per sqm per €50 at above stand rents retail Prime temporarily. supply decreases which underway, premises of retail projects renovation some also are There rented. been have premises vacant up, of the picked many and recently has premises for Demand stores. department major of some closings J 100 110 120 130 140 150 160 170 s 90 outside the Helsinki the outside x yväs sprin 2017

2000 , apr Turku OuluJyväskyläLahti Tampere O ky 2001 letting market”The picking ä Ku lä ul 2002 g 2 u l 00

2003 , ren op Jyväskylä an Jyväskylä 2004 0 = io up in Oulu”

2005 t 100 indexe

2006 Source: KTI 2007 2008

2009 s in Tampere,in

2010 d Source: KTIRentaldatabase

2011 Lahti, 2012 2013 2014 2015 2016 2017 Turku region in total: 325,000 in total: Turku region of Finland corner in south-western in the municipalities of eleven consists Turku region The 189,000 Turku: Population: employs some 4,000 people. 4,000 some employs company The Turku in the region. development economic strong the to of Turku, contributes north kilometres 60 some in Uusikaupunki, growth ValmetAlso, Automotive’s area. in the people 4,000 some employ bio industries and Turku in the area, is accommodated industry medical Finnish of the Half region. in the people 6,000-7,000 some employs currently contractors, its with company, together The facilities. in its investments significant made also has Werft Meyer mid-2020s. the until is secured shipyard Werft Meyer in the employment the orders, major several to due and, strongly developing is currently industry shipbuilding of view. point The development economic region’s the from importance of great been traditionally has which business, shipbuilding extensive an by supported are region in the 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 of Helsinki; west 160km Location: Turku Limingantulli. in property 11,000 sqm built newly in the invested who Pension foundation, Yleisradio and Pension Fund Pharmacy of by a joint venture out carried was transaction office largest The asset. one owns Kiinteistöt Agore established newly the centre, city in the and transaction, Sponda the of part as centre shopping Zeppelin the acquired Bidco Polar region, Oulu in the volume: the to contributed transactions portfolio major cities, main other in many As in 2017, years. previous two in the than is slightly less which €130 some to million amounted volume transaction Property in Oulu. high remains also activity construction Residential on average. country whole of the those outperformed returns total and 97%, some to improved rate occupancy the Also, cities. main in other growth the exceeds significantly which in Oulu, 3.7% by increased agreements rental new for index rent residential KTI the 2017, In development. economic however, struggling the policy, planning well as as expansive cities the both to due industries are showing are industries strong ”The Oulu rental residential Oulu ”The growth in thegrowth Turku region” other main cities in 2017” market the outperformed ”Sea cluster and medical”Sea The largest local player is Turku player Properties. Technology local largest The in Turku. invested also have players European and Nordic Several area. in the holdings their increased recently have fu in Turku, property and have investments typically institutions Domestic players. local and domestic of foreign, amixture are market investment Turku in the property Players mid 2020s. in the started be to work construction the and parliament next the by made be to is expected construction of the decision final The 1.5 for people. million area commuting a unified create and hour one to time travel the decrease would which Turku Helsinki, and between connection train fast of the in Turku development is the planned being project development infrastructure important most The needs. businesses’ to respond better to in order area in the developed being are possibilities education instance, for therefore, and, personnel, of skilled lack the from suffering currently are sectors industry growing 16.8% in 2016. The 13.9% at some of 2017, end at the stood at been having and significantly, decreased has unemployment sectors, industry in several development positive the to Thanks 8.0%, according to Catella. The healthy occupancy rate rate occupancy healthy The Catella. to according 8.0%, at some stands currently rate vacancy of Turku, office the whole the In zero. to close fallen has rate vacancy the were in particular, area Kupittaa in the is strong demand Office companies. at creative targeted centre office and centre conference arena, event is an which Centre, Logomo in the well as as areas, Port and Pitkämäki in the found be can supply office modern Kupittaa, to addition In underway. are building Pohjola hospital Group’s OP well as as building school medical anew building, hospita University of a new vicinity,In the construction the Sciences. of Applied Turku the for University building campus sqm 28,000 anew developing currently in late 2017. area in the centre event It and is meeting sqm a1,200 and arena /multipurpose sports indoor sqm a 9,500 acquisitions and new development. company The completed through both portfolio its increased has years in recent and inKupittaa owner major is the Turku Properties Technology 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 active in the in Kupittaa area development supports the the supports development ”Property development is is development ”Property Turku markets” property ”Strong economic economic ”Strong Turku” nds nds l l .

80 5 Property markets in different regions – outlook for 2018 81 5 Property markets in different regions – outlook for 2018 Jyväskylä region in total: 183,000 in total: region Jyväskylä of Finland centre in the 139,000 Jyväskylä: Population: several important national main roads. Jyväskylä’s econ Jyväskylä’s roads. main national important several Jyväskylä of Helsinki, north 270 km Location: Jyväskylä markets. rental residential Turku in the invested fund, German unnamed an with together Barings, and Managers Investment AXA and centre, city the in property retail and office Sampotalo the acquired Fund Estate Real Nordic Schroder centre. shopping Skanssi in the invested which II, Fund Centre Shopping European CBRE by out carried was transaction largest the and years, recent in than active more were investors year. Foreign previous in 2017, million in€260 the than less 30% is some which to in Turku amounted volume transaction property The ahotel. and facilities sports arena, a multi-purpose comprising planned, is being centre event and entertainment sqm million, 200,000 a€450 station, railway the to Next centre. city inthe block Forum of the redevelopment the well as as centre, city the to close area prison Kakola former of the development the include underway currently projects development property major Other in progress. is currently area the for plan business The 2019 2030. and between jobs 10,000 and companies 100 some for acentre develop to plans and area land 55the hectare acquired has city The shipyard. of the vicinity in the centre innovation and manufacturing Park Industry Blue extensive an planning of Turku is currently City The years. in recent low been also has sector in this development of new volume recently. The sector in this decreased have also rates Vacancy sector. shipbuilding of the situation good the by supported is currently premises manufacturing and logistics for Demand premises. owner-occupied and supermarket built purpose- to limited been has years in recent development property retail New redevelopment. under is currently centre shopping Hansa The vicinity. in its and Hansa centre shopping in the found be can space retail expensive most the centre, city the In units. retail large other well as as Skanssi centre shopping sqm 38,000 the accommodates area Skanssi The area. in the located is also Mylly centre shopping sqm 58,000 The retailers. car and furniture by, is occupied instance, for units of large supply abundant the Hauninen, In centre. city of the east area Skanssi the as well as in Raisio area Hauninen the centre, city the include Turku in the area submarkets space retail important most The this. than higher even are rents premises, smallest the for month, and per sqm per €20 exceed centre city the and in Kupittaa premises high-quality the for rents Office recent years. in development of new low the by amount is supported ”Foreign investors”Foreign were active is a university town located at the junction of junction at the located town is auniversity in Turku in 2017” omic omic

the city centre. Also Peab’s 15,000 sqm Business Garden is Garden Business sqm 15,000 Peab’s Also centre. city the of north area mill paper old in the Kangas property office sqm of a7,000 development the start it that will announced in late 2017, but Jykia company development municipal the years, in recent scarce been has development office New in Turku. than slightly lower levels are rental properties, Inprime tenants. attracting have con in particular, offices, Modern Catella. to 11%, at some remains of offices according rate vacancy The centre. city the to next area, Lutakko in the found be also can supply office modern Some use. office into redeveloped been have properties old industrial side, where northern in the Tourula and centre, city of the south area Mattilanniemi/Ylästönniemi the include supply modern with areas office Other locations. central most the in developed been recently has stock new no but region, the in area market office important most is the centre city The jobs. new are 1,500 of which chain, value whole in the jobs 2,500 plant creates sqm 142,000 Äänekoski in completed was Fibre, of Metsä mill ever, bioproduct the sector industry forest Finnish of the investment largest The 14% at some of 2017.stood end at the rate unemployment the Employment, and Affairs Economic of in 2017, Ministry the to in Jyväskylä also according and, significantly improved markets Labor workforce. of the 80% employ some services while industries, manufacturing 17.5% in the Some are region in the jobs of the industries. healthcare and ICT materials, construction and wood cover areas industry region’s Jyväskylä The technology. new and industries traditional both emphasises structure largest transactions were carried out by Brunswick Real Real Brunswick by out carried were transactions largest The million. level of €360 record anew reached volume In2017, investors. foreign transaction and the domestic both attracted has region Jyväskylä the years, recent In in Jyväskylä. low remains rate vacancy property retail the cities, major in other As year-end. at the underway was one another and in 2017, area in the completed were projects property retail Two LocalTapiola’s by fund. other is owned centre The in 2017. late opened was centre shopping Seppä sqm 24,000 new the InSeppälä, region. Jyväskylä in the area retail significant most the centre, city the with is, alongside city of the north area Seppälä the market, property retail the In of 2018. half first in the council city in the made be to is expected development onthe decision The properties. hotel and retail well as as facilities sports hall, amulti-purpose comprising area in the is planned project development million €300 An inJyväskylä. development un area significant is another city of the south area Hippos in 2018. centre in the started be to planned being is also building office sqm 6,000 Another area. in the planned being ”Office property development property ”Office close to Jyväskylä in late 2017. €1.2 Jyväskylä to close This billion, picking up in Jyväskylä” in up picking tinued tinued der der Lahti region in total: 200,000 in total: region Lahti 119,000 Lahti: Population: result of redevelopment efforts that have transferred old transferred have that efforts of redevelopment result a as increased has centre city of the attractiveness The at 15.9%. stands currently unemployment and recently, improved has situation the cities, major other in many as However, years. in recent in Lahti high been has Unemployment 30%. to decreased has share industry’s while region, the in jobs of the 60% around represent currently occupations trade and Services region. inthe operators logistics attracted has location favourable region’s The design. and in cleantech competence emphasises also region inthe base educational 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 of Helsinki north-east km 104 Location: Lahti years. in previous than at aslightly slower pace although increasing, continue rents Residential Jyväskylä. in invested funds AXA’s instance, for investors; attracting is als market residential in 2017.rental Jyväskylä The started was dwellings new 2,000 of some construction the and in Jyväskylä, is high activity construction Residential Jykia. by di that was portfolio property million industrial a €30 invested Sagax in Jyväskylä. assets included also portfolios Kiinteistöt’s Agore and Management’s Capital Cerberus both markets, transaction property retail the In Mattilanniemi. in property office in alarge invested Technopolis also and from properties office nine acquired who AB, Kielo Estate’s new record level in Jyväskylä ”The transaction volume”The hit Valuea V al Jyväskylä region (68.598 Jyväskylä region Tampere (69.813 region Helsinki region (83.511 Helsinki region ue added by employee (€ employee by added ue Whole Finland(72.196 Kuopio region (71.115 Kuopio region Turku (72.118 region in 2017” in Lahti region (66.341 Lahti region Oulu region (68.999 Oulu region dd ed by secto by ) ) ) ) ) ) ) )

20 0 Wholesale and retail trade Wholesaleandretail andfishery forestry Agriculture, r ) in parenthesis in and region 2015 region and sposed sposed

in in

o manufacturing plant in the area. area. plant in the manufacturing of its redevelopment in the investing in 2018. is also Isku premises the to is moving Sciences of Applied University Lahti and redeveloped, being are premises manufacturing furniture old Isku the area, campus Mukkula-Niemi the In in Lahti. project development office new ongoing only is the This use. office police for area in the property office an developing is currently Properties Senate State’s The use. residential mostly into redeveloped be to is planned area garrison Hennala former The in 2017. area the into moved courthouse The companies. service business for premise office instance, for redeveloped, – has properties of old industrial developer and – a owner major Oy Renor station, railway the near area, Askonalue old industrial the In planned. being are others in 2017completed several and city. of the Two were south area projects Renkomäki in the recently active relatively been has development property supermarket and Hypermarket sqm. of 34,000 area leasable a with Karisma centre is shopping there area, Karisto the In street. main the along and Triothe centre shopping around is concentrated centre city inthe supply Retail areas. pedestrian increasing well as as terminal transport public anew and facility parking underground new a by, constructing instance, for attractiveness centre’s the increased has city The uses. other into buildings industrial both invested in one retail property in Lahti. in Lahti. property retail in one invested both funds VVT’s and Aberdeen’s investors, domestic the Of developer. alocal by use retail into redeveloped been has which property, station old in bus the invested AM Corum in 2017. market French The transaction Lahti the dominated investors local and properties residential and Retail of Lahti. south started be to planned plant is bottling of awater 2018,early construction the In underway. of 2017, were projects development new no However, end at the years. in recent in Lahti active rather been has development property logistics and Industrial 0 0 0 100 80 60 40 %

Private services Private services Manufacturing Publicservices Source: StatisticsFinland Construction Construction s

82 5 Property markets in different regions – outlook for 2018 83 5 Property markets in different regions – outlook for 2018 Kuopio region in total: 132,000 in total: region Kuopio Kuopio 118,000 Kuopio: Population: and local investors. local and national of both consisting players domestic by is dominated market property Kuopio in the base investor property The 11.9%. at some area, metropolitan Helsinki the outside cities main in other at than level alower stands year, it currently and past the during in Kuopio decreased has Unemployment sectors. industry environmental and bio and health food, emphasises city the strategy, In its cities. major inother than is greater sector public in the of occupations proportion The industries. manufacturing in 8% are some region, in the jobs the Of area. in the employer biggest is the sector service the at moment, the cities Finnish major in most As wood. to related mostly are areas industry Traditional Finland. ineastern Savo, is situated of Helsinki north-east km 400 Location: Kuopio years. in recent cities main in other slower than been has growth However, rental area. in the active are funds and companies property residential main the and in Lahti, active is also construction Residential , a university city and the capital of the province of province of the capital the and city , auniversity city centre. city Also, eQ’s fund acquired a retail and hotel property in the of 2018. half second in the completion for due are properties in 2017. in Kuopio The property care one and residential in one slow. invested rather Yield OP-Rental fund remained in 2017, market investors transactions the international and any attract not did Kuopio cities, main other the Unlike premises. service retail office, residential, comprise will centre 2018. The in spring centre Portti Kuopion of sqm a47,000 construction the start to planning are Group Lapti and of Kuopio City the Group, VR centre, city the In properties. retail some of refurbishment the and facility parking underground an of 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 postponed. however, has, of which been construction the building, new by one campus Viestikatu its Technopolis extend high. to is planning relatively remains space of vacant amount The areas. hospital and University the to close locations in Technopolis well two as as Kuopio’s The Kuopio office stock is concentrated in the city centre centre city in the is concentrated stock office Kuopio The and and CIG) is a global leader in commercial real estate services services estate real in commercial leader is aglobal CIG) colliers.com leadership. thought and research customized services, appraisal and valuation consulting, management, asset and property solutions, workplace and management project markets, capital and sales investment solutions, corporate global brokerage, lease include Services worldwide. investors and owners occupiers, estate real to of services range afull provide professionals Colliers ownership, inside significant and culture With enterprising an countries. 68 in 396 offices from operating professionals 15,000 with Colliers International Group Inc. (NASDAQ: CIGI; TSX: locations. in 26 professionals property 500 over employs Finland International Colliers management. property for certification 9001 ISO the with accordance in provided are services All apartments. 50,000 of over administration the and premises, business 1,500 and centres of 18 shopping maintenance the for is responsible company The in Finland. services management facility and property of asset, provider leading is the Finland International Colliers finland.fi. www.helsinki- projects. estate real for looking investors and developers for support provides also City The location. anew for looking are that companies and investors to city of the conditions business the regarding consultation offers of Helsinki City The sizes. of all organisations welcomes Helsinki companies, innovative for location aprime As 2050. by region in the 1,882,000 and city in the living people 860,000 be will there estimates, to According in Europe. metropolises growing fastest of the one Helsinki make construction under currently areas working and residential New region. Helsinki in the underway are projects development urban biggest of Europe’s Many welfare. and of living standard high avery with secure, and stable clean, It is working. and living for region agreat is also Helsinki business. international for hub adynamic and of Finland capital cultural and political commercial, is the Helsinki publication ofthis The sponsors www.

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Estate Real KIINKO by organized events main of the is one Finland RE businesses. their and customers of its needs the into insight excellent Education Estate Real KIINKO gives This financiers. and investors providers, service developers, –end-users, industry in the players all together brings concept unique company’s The industries. construction and estate real in the operating leaders executive-level and management middle for services training and education professional of higher range a wide company, offering training leading is Finland’s Education Estate Real KIINKO knowledge. financial versatile and vast Group’s the from benefits thus and Group, LocalTapiola house finance of the isLocalTapiola part letting. and management transactions, strategies, investment including business, estate real Finnish of the insight and knowledge We billion. €3 approximately have extensive is management our under assets of the value market The services. accessory all with homes rental and premises business including Home, Going Easy and Space Carefree as such concepts service we provide tenants our For LocalTapiola Real Estate Asset Management Ltd provides provides Ltd Management Asset Estate Real LocalTapiola REAL ESTATEREAL ASSET MANAGEMENT LTD www.lahitapiola.fi/kiinteistovarainhoito l l 84 5 Property markets in different regions – outlook for 2018 Newsec offers a wide range of integrated professional SATO is one of Finland’s leading rental housing providers. advisory services, including property investment transaction We aim to offer a comprehensive choice of rental advisory and leasing brokerage, valuation and analysis, housing and an excellent customer experience. At year- real estate consultancy and corporate finance services. end 2017, SATO owned around 25,800 apartments in Our service portfolio also includes investment, asset and Finland’s largest growth centres and in St Petersburg. property management, corporate real estate management and corporate solutions. We promote sustainable development and initiatives through our operations and work in open interaction with our Newsec has over 300 employees in Finland, with offices in stakeholders to generate added value. We operate profitably Helsinki, Tampere, Turku, Jyväskylä, Hämeenlinna, Kuopio, and with a long-term view. We increase the value of our Oulu, Kokkola, Imatra and Vaasa. Its clients are among the housing assets through investments, divestments and repairs. leading real estate investors and corporations, both Finnish and international. In a survey carried out in 2017 by the SATO provides its customers with rental homes and Great Place to Work Institute® Finland, Newsec Finland was customer services. Our service promise is ‘Home the way nominated for the tenth time among the top workplaces in you want it’, and our operations are guided by our Customer Finland, and also the best workplace within the real estate First service model. By introducing service managers who industry. www.newsec.fi are familiar with the residents’ everyday lives, we took a leap in 2017 in line with our mission towards offering more Newsec – The Full Service Property House in Northern than just walls. Europe – offers real estate owners, investors and tenants a full range of services within Advisory and Property Asset The SATO Group’s net sales in 2017 were €280 million, Management. Newsec was founded in 1994 and is today a with an operating profit of €231 million and profit before partner-owned company with some 1,700 co-workers spread taxes €185 million. The value of SATO’s investment assets across the seven Nordic and Baltic markets. Newsec has is roughly €3.6 billion. approx. €39 billion under management and annually signs lease agreements of some 760,000 square meters, manages transactions of some €3 billion and does real estate valuations of underlying property worth almost €180 billion. Thanks to large volumes, local presence combined with in-depth understanding of a range of businesses, Newsec has a unique expertise of the real estate market in northern Europe. The SEB is a leading Nordic financial services group, guided by market report Newsec Property Outlook has been published a strong belief that entrepreneurial minds and innovative since 2001. Download the latest issue at www.newsec.com/ companies are key in creating a better world. As a relationship bank, SEB in Sweden and the Baltic countries offers financial npo advice and a wide range of other services. In Finland, Norway, Denmark and Germany the bank’s operations have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The Finnish Association of Building Owners and The international nature of SEB’s business is reflected in its Construction Clients is an interest group and trade presence in some 20 countries worldwide. SEB has been association representing the most prominent real estate, present in Finland since 1984, and today has 350 employees residential building and infrastructure owners, investors based in central Helsinki. and management service providers in Finland. The members represent both the private and the public sector, and member SEB’s team in Helsinki offers a full range of financing and organisations number over 200 in total. The association investment banking services to real estate investors. We brings together real estate and construction professionals. work with everything from bilateral loans and syndication to a range of capital markets products and M&A advisory. RAKLI’s activities are divided into three branches and We also offer SEB’s full product portfolio within debt- and three committees. The branches are Housing, Commercial securities-related advisory services. We also assist our clients and Public Properties, and Urban Development and in foreign exchange, streamlining their cash management, Infrastructure. The committees coordinate Real Estate and providing other customized banking services. www. Investment and Finance, Property and Facility Management sebgroup.com or www.seb.fi and Procurement. For more information, visit: www.rakli.fi.

85 Sirius Capital Partners focuses on opportunistic and value- YIT is the largest Finnish and significant North European add real estate investments in Finland. We make funds or club construction company. We develop and build apartments, deals based on an investment theme. Our investors range business premises and entire areas. We are also specialised from global institutions to multi managers and fund of funds. in demanding infrastructure construction and paving, and we are a property owner, too. Our Partnership properties An exceptional track record in the Finnish real estate segment is responsible for financing the development investment market, coupled with experience in working phases of major development projects and the ownership together with leading global investors, makes Sirius a and subsequent realisation of plots and developed properties unique investment manager. Sirius’ partners have extensive at the right moment. Partially owned projects include the experience in real estate investments and in principal Mall of Tripla, Tietotie 6 and the Hamina–Vaalimaa E18 positions in leading industry firms over the past 15-20 years. motorway project.

The firm advises Sirius Fund I Grocery and Sirius Fund II. The new YIT was born when the over 100-year-old YIT Both funds are fully invested with €235 million in equity in Corporation and Lemminkäinen Corporation merged on total. www.sirius.fi February 1, 2018. The new YIT is the developer of better homes and more functional business premises, the builder of increasingly demanding infrastructures and the provider of professional paving services. Together with our customers our 10,000 professionals are creating more attractive and sustainable cities and environments. We work in 11 Skanska is one of the world’s leading construction and countries: Finland, Russia, Scandinavia, the Baltic States, the project development companies, focused on selected home Czech Republic, Slovakia and Poland. Our combined annual markets in the Nordic region, Europe and USA. Supported revenue for 2017 was over €3.8 billion. YIT Corporation’s by global trends in urbanization and demographics, and share is listed on Nasdaq Helsinki Oy. www.yitgroup.com by being at the forefront in sustainability, Skanska offers competitive solutions for both simple and the most complex assignments, helping to build a sustainable future for customers and communities. The Group has about 41,000 employees. Skanska’s sales in 2017 totaled €16.7 billion.

Skanska’s operations in Finland cover construction services, residential and commercial project development and public- private partnerships. Construction services include building construction, building services, and civil and environmental construction. Skanska Oy employed 2,086 people in Finland at the end of the year 2017.

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

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REAL ESTATE ASSET MANAGEMENT LTD

88 KTI Finland in co-operation with: The City of Helsinki, Colliers International Finland, KIINKO Real Estate Education, 89 LocalTapiola, Newsec, RAKLI, SATO, SEB Group, Sirius Capital Partners, Skanska and YIT.