The FinnishProperty Market 2014

The Finnish Property Market 2014 1 The Finnish Property Market 2014 Contents

Preface 7

Basic facts about Finland 8

1 The Finnish economy 8 1.1 The structure of the economy 8 1.2 Finnish public finances 10 1.3 Outlook for the Finnish economy 12 1.4 Finland’s international competitiveness 14

2 Institutional aspects of the Finnish property market 15 2.1 Two forms of property ownership 15 2.2 Market practices of property investment and renting 17 2.3 Planning 19 2.4 Taxation in Finland 21 2.5 Legislation for indirect property investment 25

3 Structure and players in the Finnish property market 27 3.1 Ownership structure 27 3.2 Real estate service sector 37

4 Property sectors: investment performance, market structure and practices 39 4.1 Property investment market in 2013 39 4.2 The office market 41 4.3 The retail market 46 4.4 Rental residential sector 49 4.5 Healthcare properties 54 4.6 Industrial / logistics market 55 4.7 Hotels 57

5 Property markets in different regions – outlook for 2014 58 5.1 The Helsinki metropolitan area 58 5.1.1 Helsinki 61 5.1.2 Espoo 64 5.1.3 Vantaa 65 5.2 Other growth centres: Tampere, Oulu, Turku, Jyväskylä, Kuopio and Lahti 67

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The Finnish Property Market 2014 7 The Finnish Property Market 2014 8 Basic facts about Finland Parliament ofState Head governance and History Currency industries Most important capita per GDP Economy cities important Other city Capital Religions Languages Population People Distances area Total Geography Party (35) Party (38), Center Party The Finns The (42), Party Democratic Social The (44 seats), Party Coalition National 2011. in parties: elected Biggest parliament Current 4years. for elected members, 200 chamber, One (since 2012) Niinistö Sauli ofRepublic, President 1995 since Union European ofthe Member Independent democracy since 1917 (since 2002) Euro goods Electronics and electrotechnical Chemical products industry products industry Forest products engineering and Metal (2012) €29,100 Lahti: 103,000 106,000 Kuopio: 135,000Jyväskylä: Turku: 182,000 Oulu: 194,000 Vantaa: 207,000 Tampere: 217,000 Espoo: 261,000 biggest the being Vantaa and –Espoo municipalities neighbouring 13 and Helsinki comprising 1.4 inhabitants million region: Helsinki Helsinki: 613,000 inhabitants 1.1 % Orthodox 76.4 % Lutheran population %of 5.2 origin foreign People with 5.4 by % spoken Swedish, 89.7 by % spoken Finnish, languages: Two official km per 2,825.6 Helsinki kilometre 17.9 square per Density: inhabitants 5.45 million west to east km 540 south to 1,160 north km kilometres square 338,000 2 per km 2 per Finland): (northern region Lappi km per 172.2 (southern Finland): region Uusimaa 2 2 2 in the most important target markets. target important most the in conditions economic weak by isdepressed goods investment for demand as exports, Finnish for difficulties caused has exports Finnish the in goods ofinvestment weight heavy the Also, industries. exporting the in change structural the with coincided has which competitiveness, international their to regard with challenges faced have industries exporting however, Finnish the of years, couple past the During productivity. developing and competitiveness cost their ofincreasing terms in both survive, to order in reforms structural institute to corporations forced which 1990s, early the in recession severe the by improved was production industrial ofFinnish competitiveness international economy. ofthe The structure the in changes to due decades, few past the during significantly increased decreased. has industries offorestry that while increased has production oftotal share industries’ chemical years, recent In history. Finland’s in corporation industrial prominent most the was which Nokia, and industries offorestry decline simultaneous the from suffered have sectors manufacturing Finnish the years, recent In changes. profound through gone again, has, economy Finnish the of structure the 2009, in started crisis financial the Since industries. metal and forestry strong traditionally the with together sectors, industrial main ofthe one became and rapidly developed industries electronic 1990s, early the in recession economic the economy. the in After role important an plays production industrial exports, Finnish in significance its to Due rapid. very been has but countries, OECD other economy. Finnish %of the 20 some for accounts currently production Industrial decreased. has industry and production ofprimary that while constantly increased has share economy. the Their in sector biggest the this makes which production, domestic gross Finnish the transformation. this to contributed 1990s, early the in recession deep the following made reforms well as as 1980s, in markets financial of the deregulation The world. the in economies multifaceted most and richest of the one to agriculture and production primary on based largely asociety from itself transformed has Finland decades, few past Within the 1.1 economy of the structure The 1 The Finnish economy The share of foreign trade of the Finnish economy has has economy Finnish ofthe trade offoreign share The most in than later Finland in started Industrialisation of half roughly for account currently services Private the next two years. This supports the competitiveness of competitiveness the supports This years. two next the for increases wage minimal guarantees which reached, was agreement wage 2013, late In acollective countries. other most in than rapidly more risen have which costs, labour by pressured been has industries exporting Finnish of the competitiveness the challenges, structural Together with Finnish economicstructure,% structural change in structural the manufacturing are challengedare by “Finnish exports exports “Finnish Volume index1990=100,seasonallyadjusted Main componentsofdemand industries” 100 200 300 400 500 Public services ■Privateservices on ■Publicservices ■ManufacturingConstructi production ■ Primary 0

1990 netet Total demand Investment Exports 1991 1992

1993 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 1994 1995 0

1996 Consumption 1997 1998 1999 20 2000 2001 2002 40 countries. Russia’s share stood at 10 %. stood share Russia’s countries. EU- to went ofgoods exports total 2012, %ofthe 54 some In Russia. and Germany Sweden, include exports Finnish for countries target main The improve. to starts countries target main the in demand the that 2014 in slightly –provided increasing start to expected are year. Exports previous the to compared unchanged almost remained ofexports volume the GDP, Finnish 2013, in %ofthe and 40 some for accounted 2012, In exports industries. electrotechnical of the exports the in seen been has drop sharpest The 372009. %in to decreased ofexports share the recession, global the to Due 47 %. to amounted share its 2008 in peak at its GDP, whereas domestic demand. restrain will hand other the on but, industries, exporting the 2003 In 1990, exports accounted for only 22 % of the Finnish Finnish % of the 22 only for accounted exports 1990, In

2004 2005

2006 60 2007 2008 2009 80

Source: StatisticsFinland 2010 2011

2012 Source: StatisticsFinland

2013 100 %

The Finnish Property Market 2014 9 The Finnish Property Market 2014 10

Photo: NCC / Sini Pennanen EMU deficit amounted to some 2.2 %of GDP. 2.2 some to amounted deficit EMU 2014. in 2013, In %ofGDP 60 the exceed to is expected and increasing continues debt government general the that means which years, five past the for deficit in remained has budget government The 2009. since significantly increased have 58%ofGDP. at some stands currently debt government general The deficit. budget government well as as debt government general ofthe terms in both Pact, Growth and Stability EU ofthe criteria the fulfilled constantly has that country euro only isthe Finland Luxemburg, with Together well-balanced. and strong relatively are finances public Finnish countries, European other most to Compared finances 1.2 public Finnish However, challenges faced by Finnish public finances finances public Finnish by faced However, challenges adjusted (index2010=100) Volume indexofindustrialproduction, seasonally 100 110 120 130 60 70 80 90

1–1995 7–1995 1–1996 7–1996 1–1997 7–1997 1–1998 7–1998 1–1999 7–1999 1–2000 7–2000 1–2001 7–2001 1–2002 7–2002 1–2003 7–2003 1–2004 7–2004 among the euro countries. countries. euro the among balanced best is the economy Finnish the specialists, some to According agencies. rating credit important all from rating “AAA” its maintains still that countries euro few ofthe is one Economic dependencyratio 100 150 200 1–2005 50

0 7–2005 Despite the challenging economic environment, Finland Finland environment, economic challenging the Despite ■ pensionersothersoutsidethelabourforce ■ conscripts,conscientiousobjectors ■ unemployed0-14-year-oldsstudents,pupils 1–2006 1990 7–2006 1991 1–2007 1992 7–2007 “The fiscal position fiscal “The 1993 1–2008 is still strongbut 1994 7–2008 deteriorating” 1995 1–2009 7–2009

1996 Source: StatisticsFinland 1–2010 1997 7–2010 1998 1–2011 1999 7–2011 2000 1–2012 2001 7–2012 2002 1–2013 2003 7–2013 2004

Source: StatisticsFinland 2005 2006 2007 2008 2009 2010 2011 2012 countries stands at 44.5 %. The sustainability of the large large ofthe sustainability The %. at 44.5 stands countries OECD in GDP, average Finnish the 58%ofthe while some for accounts expenditure government aresult, As society. welfare social Finnish ofthe cornerstones the are funding tax and responsibility public Extensive categories. income all in used iswidely which provision, day-care municipal and families all for allowances of child forms the in families for support social well as as healthcare, and education free instance, for including, services, ofpublic supply comprehensive on based islargely society welfare Finnish The early 2015.early in election parliamentary the after assembled be isto which government, next the to postponed be to likely are of them some and materialise, to start actions these before solved be to remain still issues political challenging However, various careers. working lengthening for means well as as services, healthcare and welfare of social provision ofthe reform municipalities, ofthe obligations and oftasks reduction the example, for regarding, actions included decision The programme. policy structural ofits implementation the for plan long-term the published 2013, government the November In term. short the in growth economic on impact anegative have likely will which taxes, in increases and spending public in cuts both include measures These stability. economic sustain to order in discussed being currently are 2011, in measures new introduction programme’s the after significantly worsened has environment economic the as but finances, public the for actions of balancing GDP. estimated %ofthe at 3.0 stands countries OECD all for requirement average the while Finland, in required be %would of2.4 consolidation level, fiscal debt % government 60 the maintain to order in estimates, OECD to According average. on OECD-countries in than is lower requirement consolidation total level, the moderate at arelatively stands currently debt government central the as However, weakened. has economy ofthe balance structural and increased has debt government the as years, few past the during rapidly deteriorated has gap The average. EU the above isclearly economy Finnish ofthe gap sustainability the Commission, EU the to According sustainability. fiscal support and spending public control to needed are reforms structural population, ageing rapidly the to due mainly Also, years. recent in finances public Finnish on pressure The current government’s programme includes plenty plenty includes programme government’s current The increasing put has environment economic tightening The government published programme inprogramme 2013” its structural policy its structural “The Finnish Finnish “The life expectancy of the population. ofthe expectancy life World increasing the War well as as after II, born generations baby-boomer of the retirement ofthe because rapidly isdeteriorating ratio of17 level The 23 %. %,to current its from increase will 15–64) aged those to over and 65 aged ofthose (the ratio ratio dependency old-age the 2020, By EU. the within unfavourable most ofthe isone pyramid age Finnish economy. The Finnish the facing challenges changes. these execute to able be will government current the whether questionable is still it oftime, amount alengthy take would changes legislative needed the as and opposition, political the from resistance significant however, facing are, plans These cities. central bigger with merge to refuse municipalities neighbouring wealthier typically smaller, where cases in areas city major in consolidation municipal in ofcompulsion means implement to plans its published 2014, government early In the challenges. political significant facing are reforms these municipalities, ofthe self-government strong and autonomy of level high the to However, due provision. service local of productivity and scale the increase to means potential as used are ofservices outsourcing and municipalities between cooperation increased Mergers, agenda. political government’s current the in prioritised highly are provision service and structure municipal the in Reforms revenue. tax decreased and services municipal for demand increased both to due challenges increasing facing currently are finances government local The workforce. Finnish total %ofthe 20 for account who workers, municipal 437,000 are there total, In services. welfare social and education healthcare, include areas service municipal 23 biggest % of GDP. some for The account and billion, position. financial and structure economic size, their to regard with significantly other each from differ Municipalities Finland. in municipalities 320 currently are There level, municipalities. in local at the out iscarried welfare ofsocial provision However, actual the implementation. their monitoring in and welfare ofsocial principles basic the setting in role guiding astrong plays government central the system, Finnish the In municipalities. ofFinnish position policies. structural the with connection in discussed widely been has expenditure ofpublic share The rapid ageing of the population is one of the main main ofthe isone population ofthe ageing rapid The 42 EUR to amount currently expenses Municipalities’ isthe discussion policy the in issues key ofthe One structure is widely structure “The municipal municipal “The discussed”

The Finnish Property Market 2014 11 The Finnish Property Market 2014 12 peak level of 2008. of2008. level peak the well below stands still of production volume absolute the of years, couple past of the figures growth negative the to 1.3 Due %. some by 2013,In contracted GDP the average. 14 EU the %above isabout €29,100 2012. in to This amounted capita per production domestic gross Finnish The economy Finnish the for 1.3 Outlook reach. reach. to difficult rather be to proven has agreement and parties, market labour the by discussed mainly are issues These OECD. to 2012 in according 75 percent was which force, labour total of the workers ofactive proportion the increase is to aim The jobs. accept to unemployed ofthe obligation increasing and jobs, low-wage for benefits unemployment partial and subsidies wage introducing leaves, maternity during breaks career shortening instance, for include, years. 60 being age exit average the earlier, force labour the exit typically people but years, at 63-68 stands currently retirement official The workers. older for retirement postponing by and generations of younger education the up speed to means for looking by both is pursued This services. ofpublic sustainability the support to means effective an as discussed is actively life of working duration the lengthening Other means for increasing the supply of workforce ofworkforce supply the increasing for means Other by, instance, for ofworkforce supply the Increasing contracted by 1.2 %in “The Finnish“The GDP GDP growth inFinlandandtheEuro area % -10 -8 -6 -4 -2 0 2 4 6 8 2013” 2013” 1990 1991 1992 1993 Finland

1994 Euro area(15countries) 1995 1996 1997 1998 1999

Source: OECD(Finland:StatisticsFinland& Ministry ofFinance) 2000 2001 2002 2003 2004 Finland’s major export markets. The decreasing demand for for demand decreasing The markets. export major Finland’s for outlook improving and trade ofworld recovery gradual the by 2014 %,in 3.6 some supported by moderately, financial framework. tight government’s the by islimited growth consumption’s public the whereas taxation, tightening and increases wage zero-level unemployment, increasing by is constrained demand consumption Private unchanged. almost remain to estimated are consumption public and private Both %. 2014, in -3 at some territory negative the in clearly remain year. previous the to 4%compared than more by decrease to continued investments and figures growth negative showed consumption either: private growth economic sustain to able not were demand of total components Other %. 0.8 slightly, some by decrease to continued ofexports volume 2013,in the economy the and support to able not was exports Finnish for demand the in recovery expected The since. ever economy Finnish the for outlook the on pressures caused has economy global the of tightness and uncertainty Continuing exports. in collapse the to due mainly % 2009, in 8.5 by decreased GDP Finnish the 2008, in crisis financial and turmoil global ofthe a result economy. As global the in developments to exposed is highly economy Finnish the trade, foreign on dependence its to Due 2005

2006 increase to expected are exports However, Finnish the to isexpected ofinvestments volume in change The 2007 2008 * preliminary **forecasts * preliminary “The Finnish“The economy 2009 to due thefactors low suffers from cyclical from suffers external demand for for demand external

2010 investment goods” 2011 2012* 2013** 2014** 2015** and savings Private consumption,real income 8.4 % by the end of the year. ofthe end the %by 8.4 to up edge to is expected rate 2014, unemployment the and in decline to continue will Employment %. 8.2 at some stood year, of the end unemployment At the conditions. demand weakening to resources their adjust to needed corporations major as summer, the after accelerated trend year, the and the throughout situation the worsened economy of the weakness at 7.7 persistent stood The %. unemployment the of2013, beginning well. the In relatively up held has market 2014.1 %in about to territory, positive to return to just is expected GDP Finnish the in change the aresult, economy. As Finnish the of balance the support part, its for also, will goods imported Key Figures – Finnish Economy Key –Finnish Figures growth Private consumption Unemployment rateUnemployment Inflation Change in exports vol) in (change GDP -4 -2 0 2 4 6 % Despite the challenging conditions, the Finnish labour labour Finnish the conditions, challenging the Despite 2004 ■ Savings–– 2005 “Unemployment is is “Unemployment expected to rise to 2006 8.4 %in 2014” 2007 Privateconsumption––

Source: StatisticsFinland,MinistryofFinance 2008 2006 12,2 4,3 4,4 1,6 7,7 2009

2010 2007 8,2 3,5 6,9 2,5 5,3 2011

2012 Realincome

2008 2013 5,8 1,9 6,4 0,3 4,1 2014 2009

-21,3 2015 -8,5 -2,9 8,2 0,0 people in particular. particular. in people ofyoung unemployment the control to considered being are actions Specific segregation. ofsocial isadriver and expenses social it increases as problem, social a significant be to considered isalso Unemployment improve. conditions economic the when even workforce the to return to likely less be to considered are people These jobs. seeking actively up given have people of unemployed number increasing an situation, economic weak the to due as, misleading, partly be to considered are statistics Unemployment growth. economic for opportunities preventing in issues key the of one as isregarded ofresources under-exploitation services. welfare oflabour-intensive provision the instance, for sustain, to order in isneeded migration increased Therefore, demand. increasing meet to able is not workforce available the sectors, service low-income some in Also, sectors. some in workforce ofaskilled ashortage iscreating which shrink, to started has workforce Finnish the generations, Finnish exportsbytarget country, % 10 12 14 16 18 % 2010 0 2 4 6 8 3,3 1,2 8,4 3,4 7,9 Despite the relatively low unemployment figures, figures, low unemployment relatively the Despite baby-boomer of the retirement accelerating the to Due 1995 Source: Bank of Finland, Statistics Finland, Ministry of Finance of Ministry Finland, Statistics Finland, of Bank Source: 1996 USA Sweden

2011 1997 2,8 2,8 2,5 3,4 7,8 1998 1999 2000 2012 -0,2* -1,0* 0,3*

2,8 2001 7,7 The Netherlands Russia 2002 2003 -0,8** -0,6** -1,2**

2013 2004 8,2 1,5 2005 2006 Germany Germany 2014**

Source: FinnishCustoms 2007 8,4 0,2 1,5 3,6 0,8 2008

* preliminary 2009 ** forecast

2015** 2010 2011 8,2 1,8 1,0 4,1 1,6 2012

The Finnish Property Market 2014 13 The Finnish Property Market 2014 14 In In 1.4 Finland’s international competitiveness factors differentiating the winners from other countries. other from winners the differentiating factors the as ofinstitutions transparency well as as positions, public in ofthose behaviour the governing rules systems, information to access strong identified report The Zealand. New and Denmark after Sweden, with together place, third the in 2013 Finland for ranked Index Perceptions Corruption Global International’s Transparency world. the in countries oftaxation. level high and conditions climate include position Helsinki’s weakening Characteristics scene. cultural active an and education healthcare, infrastructure, functioning well- security, overall by isenhanced ofHelsinki position The world. the around capitals various in ofliving quality ofyears. couple past the during conditions worsening the despite economies, euro-zone other with well comparison in comparatively fare to Finland considers still report the environment, macroeconomic the to With regard rankings. competitiveness the in position Finland’s enhance to required be would which technologies, latest the adopt to capacity the in improvement for pillar. training and education higher the and pillar education primary and health the in both position top the occupies also Finland world. the in ethical most and run best the among be to seen also are institutions Private institutions. ofpublic transparency and functioning of category the in included indicators several is topping Singapore. and Switzerland after position third its 2013, retained Finland September in published The World Economic Forum’s Global Competitiveness Report Competitiveness Global Forum’s World Economic The Finland is widely known as one of the least corrupt corrupt least ofthe one as known iswidely Finland the comparing well reports in ranks typically Helsinki room identifies report the hand, other the On Finland ranking, Forum’s World The In Economic The mostcompetitivenationaleconomiesin2014(ranking in2013) The Netherlands(5.) United Kingdom(8.) United States(7.) Switzerland (1.) Hong Kong(9.) Singapore (2.) Singapore Germany (6.) Germany Sweden (4.) Japan (10.) Finland (3.) 5,0 5,1 5,2 , 5,3 criteria related to regulatory and legal framework, availability availability framework, legal and regulatory to related criteria assesses index The market. property transparent” “highly a as ranked time, first the for it was, and study, previous the since improved position Finland’s countries. assessed Index Transparency Estate Real Global LaSalle’s Lang Jones world. the in markets transparent most ofthe one as considered of Finland. weaknesses as regarded commonly are regulations labour restrictive and rates tax high Also market. ofthe size small the with deal mostly particular, in perspective abusiness from ofFinland, characteristics not-so-positive The living. and business for support favourable provide healthcare and education high-quality and framework, regulatory transparent stability, economical and political where economy welfare Nordic respected isgood. work-lifethe balance and average, OECD the to close are earnings and Jobs high. very as isregarded quality environmental and is excellent, Education connections. social and engagement civic security, personal well-being, ofsubjective level high Finland’s to contributes this and OECD, the in lowest the is among inequality Income dimensions. all in average OECD the than better performs Finland Index, Life Better OECD the In From the property market perspective, Finland is also is also Finland perspective, market property the From a as reputation Finland’s illustrate rankings These , published in 2012, ranked Finland 8th among the 97 97 the among 8th Finland 2012, in ranked , published 5,4 least countries corrupt “Finland is one of the 5,5 GCI 2014score in the world” Source: World EconomicForum 5,6 5,7

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The Finnish Property Market 2014 15 The Finnish Property Market 2014 16

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furthernotice41% Fixed +untilfurthernotice23% agreed notice period – until one party wishes to terminate it. terminate to wishes party one –until period notice agreed an –with period indefinite an for automatically continues then which lease, afixed-term on agree to common is also it market, property commercial the In years. five to three is from term fixed atypical buildings, office multi-tenant In practices. international with compared short quite typically of moving. costs the and premises new for of searching cost the pay to willing not are tenants turn, In tenant. anew for searching of cost the and vacancy avoid periodic to wants landlord the part, its For readily. clause break the exercise not do and this, accept normally parties Both more. pay they downturn the in whereas value, rental current the than less pay might tenants market, ofthe peak at the that means This market. the in fluctuations temporary tolerate typically parties %. 41 is share their area, space total by Measured indefinite. are agreements office %ofall 60 about ofagreements, number the by measured database, rental KTI’s In termination. lease justify to used conditions the among are portfolio property ofthe rearrangement or changes, mix tenant adjustment, Rent contract. the terminate to cause acceptable an have however, must, landlord The types. property other in used widely also are but spaces, smaller and buildings office tenant multi- in popular especially are terms lease indefinite These months. twelve or six three, istypically which period, notice agreed an it after terminate to wishes landlord or tenant the either until is valid contract indefinite an notice”: further conditions. and terms on agree to freedom parties gives leases regulating legislation liberal The market. property commercial Finnish the in vary practices Rental practices Rental Source: KTIRentaldatabase Where fixed terms are used, the contract periods are are periods contract the used, are terms fixed Where both as periods, long for last often leases Indefinite is “until agreements lease Finnish in term A common Fixed term36%

The Finnish Property Market 2014 17 The Finnish Property Market 2014 18 different options that are exercised. exercised. are that options different of however, avariety are, There renewal. alease to right statutory no has atenant example, –for market property use. businesses’ core their for capital free to order in transactions sale-and-leaseback executed have corporations Finnish several years, recent In issues. accounting and conditions market financial both by driven viewpoint, tenant’s the from are, ofagreements kind ofthis terms and popularity The years. 20 to ofup terms lease have often arrangements, leaseback sale-and- in, example, for buildings single-tenant in large Agreements iscommon. more or years often lease anet building, office single-tenant apurpose-built, For applied. commonly operating costs and minor repairs. minor and costs operating typical covering charge aservice plus rent net includes which rent”, “gross for are agreements Traditionally, rental agreements in the KTI rental database are for gross rent. In In rent. gross for are database rental KTI the in agreements %ofoffice 80 some ofagreements, number by Measured types. property all in buildings multi-tenant in common agreements regarding the space they use. The owner is responsible for repair and replacement costs if caused by normal wear and tear. and wear normal by caused if costs replacement and repair for responsible is owner cleaning and The use. they space the electricity own their have regarding tenants and agreements building, the of areas public the for responsible typically is With owner the disposal. waste electricity, and and water cleaning to heating, with case regards the also is This responsibility. owner’s the are maintenance and building the of management that areas means outdoor This and owner. the by indoor paid both are for costs expenses operational and taxes property insurance, rent, land the where are rents 1 Gross Tenants’ rights are quite limited in the commercial commercial the in limited quite are Tenants’ rights are agreements fixed-term longer units, larger For “ commonly applied in ‘Until further notice’ further ‘Until lease terms are lease are terms Finland” 1 Gross rents are very very are rents Gross landlord wants to secure a stable base for their cash-flow. cash-flow. their for base astable secure to wants landlord low, quite the as istypically rent ofthe part turnover-based However, the of turnover. share agreed an by supplemented rent base ofaminimum consist usually they and centres, indexes. cost operating to rents their index to tend landlords some inflation, overall the than rapidly more increased have costs operating as years, recent In index. used commonly most isthe Index Price Consumer The years. three exceeds term the where leases fixed-period applied. widely very not yet as are actively, but developed being currently are contracts ofrental terms “green” Other savings. energy towards parties both motivate to well as as landlord, the and tenant the between fairly cost energy things, other of, among risks and benefits the share to attempt they as leases”, of“green form basic the as popular more becoming are ofagreements kinds These rent”. “shared a called istypically ofagreement kind This tenant. the to separately recharged then are ofwhich costs the building, the of maintenance and management ofthe care takes landlord parties. the between freely agreed be can refurbishments and insurances taxes, for responsibility the leases, net In costs. maintenance for is responsible tenant the where rents, net charge. service aseparate (net) well as as base the rent includes rent total the cases, these In tenants. to offered services of business amount avarying include typically agreements lease the parks, business as such types, property specific some Turnover-based rents are commonly used in shopping shopping in used commonly are rents Turnover-based in and leases indefinite all in freely indexed be can Rents the but rent, net is for agreement rental the cases, some In apply to common it ismore buildings, single-tenant In

Photo: Skanska / Minna Rannikko Rental turnover rent for Basis payments of-living index are published monthly at the same time as the consumer price index.” (Statistics Finland) cost- the of (Statistics index.” figures price point the and consumer the as series time the same the at interrupt not do monthly revisions published index are index cost-of-living because the to one, tied of-living usable usually most are the is land, index or premises business cost-of-living the dwellings, on point, its user’s those and as the =100) such From 2000 rents, index. index Many price index. price consumer consumer (currently the index follows price therefore, consumer latest the development, from calculated series time along is =100 1951:10 index cost-of-living The term Lease Sector Typical leasing practices in Finland Property Property taxes

Rent Rent Indexation review External External repairs Internal repairs Building insurance by Regional Councils, and confirmed by the Ministry of Ministry the by confirmed and Councils, Regional by approved and up drawn are plans Regional considerations. environmental and functional structural, embrace which plans, regional the in reflected are use of land principles national These ofState. Council the by defined are Decree. Building and Use Land the in included are construction and use land on controls and regulations detailed More Code. Building National the in included are Act Building and Use Land the in legislation the complement that guidelines and Regulations plans. local detailed and plan master alocal plan, use land a regional plans: use of land levels three has system The Act. Building and Use Land the by isregulated Finland in use Land 2.3 Planning termination. lease well before even renegotiated be can terms lease and tenants, their retain to means various use investors conditions, market tight current the In things. other among improvements, tenant and increases rent stepped periods, rent-free offer to tend landlords levels, rent the decreasing than Rather demand. weakening with coincided has supply in increase when years, recent in markets office area metropolitan Helsinki the in instance, for seen, clearly been has This applied. be can tenants attract to means various situations, over-supply and downturns market In National principles for land use and regional structure structure regional and use land for principles National order to attract tenants” attract to order means applied are in conditions, various “In current market current “In

Space area / area Space living of Cost Shopping Landlord Landlord Landlord Tenant / Tenant Annually landlord Monthly centres 5-15

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single-tenant single-tenant living of Cost area Space Annually Offices, Offices, Monthly Tenant Tenant Tenant Tenant 10-20

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The Finnish Property Market 2014 19 The Finnish Property Market 2014 20 has caused challenges for both municipalities and developers. and municipalities both for challenges caused has which regulation, the implementing in differences regional been have there practice, In plan. regional the in included be to need locations these and connections, traffic public good with locations in developed be only can units retail large centres, city the Outside strengthened. is being units retail for location apreferred as position centres’ City units. retail oflarge location the over control regional increased legislation The regions. different in sqm 10,000 and 5,000 at between set been has level, and aregional on defined be to left been has of“large” concept the legislation, the In 2011. spring in force into came this concerning legislation New units. retail large for permits building and plans the over coordination and control isregional years recent in municipal structure. the in reform planned the to regard with discussed topics critical most ofthe one are issues planning and use Land 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 things. other among issues, structure urban and sustainability to approach ofholistic lack its for framework regulatory current the criticises practices permit extended. been have permits special granting in municipalities of the 2011-2014. in tested powers the being period, Within this One land use issue that has been actively discussed discussed actively been has that issue use land One building and planning around discussion recent Some which are likely to increase property developers’ costs. costs. developers’ property increase to likely are which responsibilities, supervisory construction’s in changes well as as time-consuming, and complicated more processes planning make would that changes possible instance, for include, professionals ofproperty concerns primary The players. market the and authorities the between discussed being sectors. trade retail and construction the in competition enhance to and growth support to order in policies use land active more for challended are Municipalities of plans. levels different between relationships clearer well as as regions, city in use ofland steering stricter for need the emphasises report The issues. quality regarding parties ofdifferent responsibilities well as as ofconstruction, quality and processes planning the of functioning instance, for include, areas assessed The Act. Planning and Use Land of the functioning the on evaluation an published Environment ofthe 2014, Ministry the February In The conclusions of the evaluation report are currently currently are report evaluation ofthe conclusions The “The functioning of the“The Land Use andLand Planning Act is being evaluated”

Photo: SRV income for duties requiring special expertise. For these “key employees”, specific rules concerning work and salary levels apply. See www.vero.fi. apply. See levels salary and work concerning rules specific employees”, “key these For expertise. special Finnish-source any requiring receive duties they for if income period a24-month 35 %during of rate flat the at tax aspecial for Finland. of qualify may residents employees” “key permanent of that as foreign rates However, same the to according taxed is months six than more for otherwise. Finland in staying instructing card persons of income atax-at-source earned The received have they unless wages, on source at a35 %tax income on collect only Finland in employers tax Finnish pay They Finland. from non-residents. received considered are months six than less of aperiod for Finland in present persons purposes, tax 2 For schemes, as well as an unemployment scheme. The level 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 OECD’s in taxes as included are ofwhich some taxpayers, by paid are that contributions security social %. 22.5 %and 16.5 between 2014 for vary rates tax Municipal income. earned for municipal ones. municipal for rates flat and purposes tax national for rates tax progressive to according taxed are Residents income. worldwide is 32 %. rate tax the euros, 50,000 exceeding income capital For %. at 30 stands currently rate tax gains Capital profits. sales and dividend, income, rental interests, example, on, for islevied tax income Capital rate. tax at aflat municipalities the to and rate at aprogressive state the to paid is tax Income income. capital and income earned categories: 33to %. amounted consumption on based oftaxes share The revenue. tax total %ofthe 36 almost for accounted taxes income other. 2012, In the on services and goods on taxes and hand, one on gains capital and profits income, on taxes categories: statistics. OECD’s the in taxes as classified not are Churches Orthodox and Evangelical-Lutheran ofthe communities local the to Payments headings. different forty some under listed funds security social various and Institution Insurance Social the government), (local municipalities government, of the behalf on levied are Taxes Finland in 2.4 Taxation Finland in In addition to the actual taxes, there are some obligatory obligatory some are there taxes, actual the to addition In In Finland, resident individuals are taxed on their their on taxed are individuals resident Finland, In two into isdivided income taxpayer Individual two from is derived Finland in oftaxation bulk The Distribution ofoperatingcosts,2012 19 % 1 % 3 % 1 % 2 The highest state tax rate is31.75 rate tax %of state highest The 2 % 15 % Office buildings Office 17 % 5 % 2 % 13 % 17 % 3 % 3 % 7 % 1 % 4 % 1 % 4 % 21 % 4 % Apartment buildings Apartment 10 % 8 % specific tax rate of 1.5-3.0 % is typically applied. %istypically of1.5-3.0 rate tax specific a sites, construction unbuilt For 0.75 %. % and 0.3 between vary and lower are residences permanent for Tax rates annum. per value 1.35 %and taxable %ofthe 0.6 between vary commonly rates tax Currently, range. this within rates the decide municipalities and parliament, the by regulated are rates tax maximum and Minimum tax. property real from isexempt agriculture or forestry in used Land is situated. property real the where municipality the to goes revenue The property. ofthe value market %ofthe 70 about generally is and authorities tax local by isdefined value taxable The property. ofthe value taxable the on isbased that tax property areal to issubject Finland in situated property Real Tax property real on (VAT). tax value-added and taxes corporate taxes, transfer taxes, gains capital taxes, property are investment property taxes. and indirect direct 2013, both in including increased were rates tax Several agenda. political the on issues discussed vividly most of the isone oftaxation structure the Therefore, cuts. tax further for opportunities demolished have deficit public resulting the and downturn However, economic the Finland. in burden taxation total the reduce to actions serious taken has France. and Belgium Denmark, Sweden, by exceeded isonly figure 2011 this EU, the In 43.4 %. was in GDP to taxes oftotal ratio Finnish The countries. OECD employer. ofthe sector business and size the on partly depend contributions these In the Finnish tax system, the taxes most relevant for for relevant most taxes the system, tax Finnish the In government the periods, electoral two last the During for average the above is clearly oftaxation level The 8 % 4 % 22 % 6 % ■ 13.Repairs ■ 12.Othermaintenancecosts tax ■ 11.Property ifapplicable) rent, ■ 10.Rent(ground ■ 9.Insurance ■ 8.Waste management ■ 7.Electricity ■ 6.Water andwastewater ■ 5.Heating ■ 4.Cleaning ■ 3.Outdoormaintenance ■ 2.Operationsandmaintenance ■ 1.Administration Source: KTI

The Finnish Property Market 2014 21 The Finnish Property Market 2014 22 price. transfer is2%ofthe company estate real or ahousing in shares buying by made transactions for tax Transfer price. transfer is4%of the property ofreal Tax transfer the on Transfer taxes company. ofthe assets net the on companies, non-listed for also, -and not or listed it ispublicly –whether dividend the pays that of company type the on depend consequences tax The Finland. in taxed double- ispartially income of2014. Dividend beginning islevied. source at tax no Directive, Parent-Subsidiary ofthe requirements the fulfils company beneficiary the and investment, direct of 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 the on is applied rate %tax a 30 dividends, For tax. source a final withholds payer the Finland, from received royalties or interests dividends, Of non-residents. for %also at 30 taxed istypically income Rental Finland. in years. following five year, that in or, during loss, the possible not if of year the in gains capital from is deductible investment on made loss Capital deductible. are income, investment the to related directly are that expenses interest as such costs, atFinancial 32 %. taxed be will €50,000 exceeding income Capital %. at 30 stands gains) currently capital and income rental net (interests, income Tax investment on taxes gains Capital Transfer tax is usually imposed on the purchaser. the on imposed is usually tax Transfer tax. transfer to subject always nevertheless, are, company housing or estate areal in Shares non-residents. are seller and buyer the both if or exchange stock the through place takes company). estate real mutual ofthe debt potential by deducted (total price price sales net the on levied been previously having price, economic conditions of the municipalities. municipalities. ofthe conditions economic tightening the to due emerged have taxes property increasing for pressures the years, recent In properties. of residential 5%ofthose some and properties, ofoffice costs operational transfer is due to an inheritance, a donation or a division of property subject to matrimonial rights. matrimonial to subject the if property of liability adivision or adonation transfer-tax no is inheritance, an to There home. due is transfer permanent owner-occupied first her or his acquires 39 18 and between aged aperson if imposed is tax 3 No Taxation of dividend income was changed in the the in changed was income Taxation ofdividend gains capital on liability tax alimited have Non-residents The transfer of securities is tax exempt if the transaction transaction the if exempt is tax of securities transfer The Taxes typically represent some 17 % of the total 17 some total %ofthe represent Taxes typically 3 The tax base currently covers the total transaction transaction total the covers currently base tax The depreciation in taxation. The declining balance method method balance declining The taxation. in depreciation services. or of goods (not payment) ofdelivery year the in registered are costs and income rules, accounting Finnish to According deductible. mostly limitations, certain with are, abusiness maintaining or acquiring in incurred Expenses assets. financial in investing from profits the and services or work for compensation and fees income, rental merchandise, selling from proceeds as such types, income several it covers because broad is rather establishment. permanent ofany regardless tax, to isliable country anon-tax-treaty from acompany principle, In Finland. in establishment apermanent to attributable income all and Finland from derived income their on taxed are companies Non-resident income. worldwide their on owner-shareholder. of the income as taxable fully are profits the partnership, limited or ageneral or entrepreneur business self-employed exceeded. isnot 8%limit the though even income capital as taxed 85 %are euros, 150,000 exceeding dividends For rate. tax income progressive the to according is taxed amount 75 exceeding %ofthe 8% threshold, this exceed dividends the If shares. ofthe value mathematical the on calculated of 8%return level the exceed not does of dividend amount the that provided tax-free, are 75 dividends %ofthe income. capital as taxed company, %are 25 anon-listed from dividends the Of rate. %/32 %tax at a30 income capital as 85 %istaxed and company, 15 listed %istax-free, from income dividend company. the ofthe Of value mathematical the on dependent isalso ofdividends company, taxation the anon-listed In not. or listed ispublicly company the whether and shareholder-beneficiary ofthe status tax the instance, on, for depending rules, specific by provided as taxed be will company liability ofalimited shareholders dividends, expenses. ofinterest deductibility on placed were limits and at all, deducted be cannot expenses representational instance, for expenses, ofcertain deductibility the in made were changes some time, of2014. same the At beginning the % in 20 %to 24.5 from decreased was rate tax income Corporate itself. entity the to attributable income as taxed are profits the societies, cooperative and companies oflimited case the In entity. of corporate form the by determined largely are organisation or ofacompany obligations Income-tax taxation Corporate Costs for acquiring fixed assets are deducted by by deducted are assets fixed acquiring for Costs taxation corporate in considered ofincome concept The tax pay to liable are Finland in residing Companies a individual, professional ofaself-employed case the In of taxation the for legislation new the to According

Photo: NCC / Sini Pennanen and do not pay any taxes on their investment income. income. investment their on taxes any pay not do and taxation in treatment special receive which funds, pension Finnish for instance, for important, isvery This status. tax own investor’s the to according taxed are gains capital and ofview, income point and ataxation from structure through isapass- partnership principle, In applied. commonly most are structures partnership limited investors, domestic for targeted funds estate real In structures. fund estate real structuring in importance ofgreat are Taxation issues structures Taxation of partnership structure. or ofbuilding type the on %,depending 25 to 4%up from varying rate a maximum with separately, is calculated building each for Depreciation structures. other and ofbuildings depreciation the to applies “Corporate tax rate“Corporate was tax typically structured as typically structured “Real estate funds are are estate funds “Real decreased to 20 %indecreased limited partnerships” 2014” VAT included in the cost of services of the property. property. ofthe ofservices VAT cost the in included the deduct can owner VAT. final property tenant’s the The from isdeductible VAT the rent the in cases, included these VAT be also In must liable. tenant The tenants. and premises the concerning met are requirements certain that given isgranted liability The rents. VATfor collecting for liability is10 %. rate the services, certain and VATthe medicine is14 books, rate for %,and products food For services. and of goods groups specific VAT lower some for are rates There services. and goods for charge total the on VAT at 24 %. stands iscalculated VAT currently rate standard The investment. property for is relevant that (VAT) tax is another tax Value added tax Value added Finland. outside domiciled typically therefore, are, offunds, kinds These investors. at foreign targeted funds for applied beneficially be cannot structures partnership up.However, Finnish set is structure fund the when consulted be should authorities tax the Therefore, income. business as or rules taxation income to according taxed be either can business property by generated income Taxation ofapartnership’s fund. the of ofactivities type the and organisation the on depend might status tax ofapartnership’s interpretation The In Finland, it is optional for a property owner to apply apply to owner aproperty for it isoptional Finland, In

The Finnish Property Market 2014 23 The Finnish Property Market 2014 24 are met. met. are conditions certain that provided countries, EU in companies between traded services and goods on levied usually not VAT separately. is investigated be to needs always Finland VAT with fraud. associated risk tax potential the reducing at aimed isparticularly mechanism This basis. continuous a on services construction offering companies on is applied VAT. for is responsible mechanism This services construction of buyer the that means This sector. construction the in applied been has mechanism charge however, areverse VAT. paying for 2011, responsible Since is generally sector. finance and banking the in companies and charities associations, include organisations ofnon-VAT-liable Examples rent. ahigher as deductions VAT of “lost” impact the compensate to need typically liable VAT not Tenants owner. are the for who importance great is of VAT the tenant of the liability regulation, the to Due period to a ten-year period. aten-year to period afive-year from extended been also has period revision The period. revision the under lapsed time the to proportionate and with accordance in amount adecreased only but revision to VAT subject be not will of deducted amount full the that means This of time. lapse the to is proportionate that revision a to lead also could use oftaxable increase an circumstances, some In period. revision aset within istransferred property ofthe ownership the if or decreases adeduction to entitling property ofthe use the if revised be then will deduction This activity. ofaVAT business use the for taxable is intended property relevant the that provided building, existing an of restoration the well as as building ofanew construction the for VAT costs the in deduct to included entitled also VAT treatment of goods and services sold outside outside sold services and ofgoods VAT treatment services or ofgoods seller the system, Finnish the In Under Finnish VAT legislation, a taxable entity is entity VAT Finnish a taxable Under legislation, are of importanceare great “Value issues added tax in leasing premises” Finland in rates tax Central securities tax, Transfer companies estate real of mutual tax, shares Transfer property real tax, Transfer property Tax onreal VAT tax rate Capital gains rate Corporate tax investment is thus estimated to be insignificant. insignificant. be to estimated thus is investment estate real on impact Act’s The law. the of scope the from institutions pension and insurance also excludes financial, act The affected. be not will income business of source a as taxed not are which partnerships limited Also Act. new the by affected be not will they Tax Act, Income the under taxed usually is income companies’ estate real As income. business of asource as taxed are operations whose companies to applied be only will it decided finally as but scope, awider have to planned first was Act The parties. related to paid interest of deductibility the for conditions specific sets Act The business. the of result adjusted the on depends limit this exceeding interest net of deductibility The €500,000. to expenses interest net deductible of amount maximum the limits Act The 2014. for taxation in time first the for applied be will act The force. into rules”, came “thin-cap called so the expenses, interest of deductibility the limiting act anew 2013, of beginning the In 2014 of beginning the from applied be will restrictions deduction Interest 1.6 % 2.0 % 4 % 0.5–1.35 % 24 % €50,000) exceeding income (32 %on 30 % 20 % Tax rate Source: Finnish Tax Administration, www.vero.fi Tax Administration, Finnish Source: subject totransfertax. always housing companyare ina Shares non-residents. are both thesellerandpurchaser thestockexchangeorif through exempt ifthetransfertakes place Transfer ofsecuritiesistax- of theshares. transactionprice the total(gross) 2013.TaxMarch iscalculatedon Tax on1 ratewasincreased company. of a(mutual)limitedreal-estate outbysellingtheshares carried The majorityoftransactionsare the land. separately forthebuildingand Taxableof property. valuedefined Depends onmunicipalityandtype periodicals (0%). etc. (10%);andnewspapers culturalevents, transportation, (14 %);medicine,books, andcateringservices restaurant Special ratesforfood, listed companies,etc. in shares company shares, securities suchashousing buildings, property, real selling from Levied onprofits Tax in2014. ratedecreased Note investors. investors. private to offered also are funds these All launched. were strategies varying with funds 2013, more four During ltd. Company Management Fund 2012 late in Finnreit by launched only was Care, eQ framework, this under fund first the years, several for existed has funds these for legislation the Although purposes. tax Finnish for transparent fully as considered are and entities taxable not are funds These fund. ofthe value %ofthe 50 to isrestricted funds these of level gearing long-term The applied. be may periods redemption long relatively and frequency, subscription and redemption the on limitations include may rules The rules. fund the in stipulated are funds these from redemptions and in investments for company. Provisions management fund aseparate by managed structures open-ended are funds These Authorities. Supervisory Financial Finnish the by (in sijoitusrahastolaki Act Finnish, Funds Common Finnish the by stipulated are funds investment special These property. in invest that funds investment special perspective. institution’s an from favourable not thus and taxation, corporate to is subject property in investing companies limited from income Investment met. are conditions certain that provided status, tax investors’ the to according taxed is income investment and structures transparent tax are partnerships limited as structures, these in drivers major are Tax issues partner. general isthe company management fund the cases most in where partnership, is limited investment property indirect for structure common most ofview, point the investor institutional Finnish the From Property funds investment property indirect for 2.5 Legislation The Finnish legislation also enables the establishment of establishment the enables also legislation Finnish The property funds offered funds property five semi open-ended “There are currently currently are “There to various investorto various groups” ) and are regulated regulated are ) and registration from Financial Supervisory Authority. from Financialregistration Supervisory or authorization for apply to have managers fund the which by 2014, July 22 until last will period transitional The basis. case by acase on assessed be will applicability the and investors”. 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The Finnish Property Market 2014 25 The Finnish Property Market 2014 26 listed companies investing in real estate. real in investing companies listed non- in used widely isalso structure liability Limited plc. Technopolis and plc plc, Citycon Sponda exchange: Helsinki OMX Nasdaq the in listed companies property significant three currently are There companies. normal as taxed are and Act, Companies Liability Limited the by regulated are They companies. liability oflimited form the in operate companies ofproperty majority the context, Finnish the In Property companies properties was listed was properties in investing in residential “The first tax-exempt first “The property company company property 2013” significant. become to expected isnot ofvehicle kind of this volume the legislation, the by set provisions limiting the 2013. to Due October in Helsinki OMX Nasdaq the in listed successfully plc, was Trust Investment Estate Real Residential Orava fund, This framework. regulatory this under operating company one only iscurrently There foundation. of its years three within listed be to needs company The rules. accounting strict with comply to and dividends, as profit the %of 90 out pay sheet, balance %ofthe of80 amaximum to capital debt its limit to properties, residential rental in only invest to companies the require ofcompanies kind this for transparency tax for provisions The properties. residential in investing companies for only given been currently has REIT-structures, know internationally resembling structure the companies, property listed tax-exempt for possibility The

Photo: Skanska / Minna Rannikko to new investment sectors and assets. assets. and sectors investment new to expansion well as as value in changes development, new from resulted value in increase The players. ofnew emergence and portfolios ofexisting expansion ofboth aresult as billion €2 some by increased market invested of the 2013, size total the During universe. investment total %ofthe 34 some represent holdings direct their through who players, significant most the –remain particular in funds, pension –domestic investors occupied. owner- are thirds two some ofwhich buildings, residential of sites) consists (including billion of€480 stock building total Finnish of the majority The stock. building total the 10 %of some represents This billion. €48 isaround market investment property professional Finnish ofthe size The 3.1 structure Ownership Finnishmarketthe property 3 Structure players and in (fair valuesoftheproperties attheendof2013,EURbillion) Direct property holdingsof25biggestproperty investorsinFinland In the property investment market, institutional institutional market, investment property the In Ilmarinen MutualPensionInsuranceCompany LocalTapiola andLocalTapiola’s Group funds* *1 January 2014 *1 January Varma MutualPensionInsuranceCompany Etera MutualPensionInsuranceCompany Aberdeen's funds'investmentsinFinland Aberdeen's Elo MutualPensionInsuranceCompany* Forum FastighetsRealEstatefund Forum Nordea LifeAssuranceFinlandLtd Nordea ICECAPITAL HousingFunds Sponda real estatefunds Sponda real NV Property FundIKy NV Property RBS Nordisk Renting RBS Nordisk CapMan RealEstate Wereldhave Finland OP-Pohjola Group Sveafastigheter Technopolis Plc VVO Group Ltd VVO Group Fennia Group Sponda Plc Citycon Plc Avara Ltd SATO Niam Keva 0,0 Non-listed property companies/funds ■ Non-listedproperty ■ Institutionalinvestors 0,5 1,0 billion at the end of the third quarter of 2013, according of2013, according quarter third ofthe end at the billion €158 some to amounted schemes pension occupational statutory the administering funds and companies insurance and other companies. insurance funds life include markets institutional the in participants Other portfolios. investment institutions’ in assets total of the three-quarters for account they total, In universe. investment institutional Finnish ofthe majority the form schemes pension other and companies insurance Pension investors Institutional investment market,EURbn The structure ofFinnishproperty 1,5 10 20 30 40 50 0 The total value of the investments of pension of pension investments of the value total The Charities, trusts andother ■ RealestatefundsCharities,trusts companies companies■Non-listedproperty ■ Listedproperty investors ■ InstitutionalinvestorsInternational International investors ■ International companies ■ Listedproperty 2011 2,0 15,4 9,0 5,2 6,5 5,7 Source: KTI(queryfor investors,annualreports) 2,5 16,2 2012 9,0 5,4 7,6 6,3 3,0 3,5 2013 16,2 9,3 5,6 8,4 7,1 Source: KTI 4,0

The Finnish Property Market 2014 27 The Finnish Property Market 2014 28 from new pension contributions. pension new from is originated 10 growth % of the Some investments. existing on returns ofhealthy isaresult growth ofthe majority The of 2012. end the to compared billion €8.8 ofsome growth a represents This TELA. Alliance Pension Finnish the to pension payments thus have to be partly covered by returns returns by covered partly be to have thus payments pension and reserves, to transferred amount the exceeded now has out paid being ofpensions amount the generations, 1940s the from of people numbers of large retirement the to Due assets. investment institutional Finnish ofthe basis the form reserves These pensions. future for reserves to transferred is portion another and insured of the pensions the pay system. pension Finnish the in role asignificant have not do insurance, pension individual or agreements market labour on based systems, pension Supplementary employees. and employers both by paid are contributions Pension employers. by organised foundations and funds pension companies, insurance pension by isadministered and contributions pension annual of the bulk the receives scheme pension occupational The insurance. pension employment-based and regime pension public ofabasic isamixture system pension Finnish The Part of the annual pension contributions is used to to isused contributions pension annual ofthe Part pension contributions contributions pension payments exceeded exceeded payments “Annual pension in 2013” in number of company or industry specific pension funds. pension specific industry or ofcompany number a and Fund), Pension State and (Keva workers sector public for institutions pension specific two are there addition, In Fennia. Pension and Pension ofLocalTapiola merger the through established was Elo company insurance pension of 2014, mutual anew when beginning the in six to seven from reduced was number Their sector. pension private the in players biggest the are companies insurance Pension sector institutions, have returned 4.2 %. 4.2 returned have institutions, sector private as framework solvency asimilar have not do which institutions, pension sector public period, same the During 17 past years. the in average on annum per 3.9% to amounted has investments institutions’ pension sector private on return real the TELA, to According investments. on return real % annual of a3.5 assumption the on based are flows money pension long-term the on Calculations investments. on funds’s investmentsfunds’s at a “Pension the are funds the Finnish property “Returns on pension “Returns biggest investors in healthy level” healthy market”

Photo: NCC / Mikael Linden portfolio amounted to €3.1 billion at the end of 2013. €3.1 end to at the billion 2013, In amounted portfolio property domestic direct Ilmarinen’s fund. new Trevian’s SATO and instance, to, for assets selling through structures indirect into investments its transferring continued Varma 2013, In billion. €3.7 ofsome portfolio domestic adirect with Finland in investor property biggest isthe Varma investors: property major also are They respectively. billion, €32.3 and of€37.7 portfolios investment total with Finland, in companies funds. between markedly varies investment total the of proportion investments’ estate Real investments. total their of a12.7 %share of2013, representing quarter third of the end €12.2 at to the billion amounted investments property Their system. pension Finnish the in participants private-sector funds. property non-listed through done are investments foreign all Almost area. euro the within invested are investments of foreign of 2012). end at the billion (€2.3 majority billion The €2.4 to amounted investments property of foreign amount the 2013, ofSeptember end the At Finland. in are investments of2012. end %at the 10.8 at 2013, stood having during slightly decreased share Their of2012). (€15.6 quarter billion ofthird end at the billion €16.7 to %,amounting 10.5 was portfolios institutions’ instruments. market money and bonds in invested were assets %ofthe 44 Some investments. ofexisting value in increase and investments new 2013 both to due during increased investments of equity share The investments. equity other or shares listed in invested were assets institutions’ of2013, pension %ofthe 45 quarter third ofthe end the At Varma and Ilmarinen are the two biggest pension insurance insurance pension biggest two the are Ilmarinen and Varma biggest the are companies insurance pension six The property institutions’ pension ofall majority vast The pension Finnish the in investments ofproperty share The companies, 30September2013 Portfolio allocationsofmajorpensioninsurance 100 20 40 60 80 % 0 Shares ■RealestateinvestmentsOther ■ Shares anddeposits ■BondsOthermoneymarketinstruments ■ Loansreceivables Pension Fennia LocalTapiola Pension Etera Ilmarinen companies, VVO, SATO Avara. and companies, investment property residential biggest the in shareholders major instance, for are, They companies. property non-listed and listed ofboth ofshares ownership the through property funds. property non-listed Finnish major all in investors major are also institutions pension domestic although abroad, made are investments of indirect majority 12-25 The %. istypically investment ofindirect share the portfolios, property funds’ of2013. end at the biggest the In million €480 some to amounted investments funds property whose Fund, Pension State isthe investments property indirect on solely focuses that one only the institutions, large the Of portfolios. property the dominate clearly investments direct institutions, pension most For funds. between markedly property. in 7.3 €37.8 to some of which billion, % is invested amounted portfolio of2013, end the At investment Keva’s of Finland. Church Lutheran Evangelical the and governments local and state the in employed ofpersons matters pension the handles which Institution), Pensions Government Local (formerly billion. €2.2 some to amount holdings property €18 direct ofsome Its billion. portfolio investment atotal has Elo, field, company insurance pension the in newcomer The Technopolis. with together Oslo in park business amajor in investment venture ajoint into 2013,late it entered when in kind ofthis investment first its made Ilmarinen abroad. investments property direct enables also strategy The assets. real into allocation their increase to plan they which to according strategy, investment new its published Ilmarinen Pension insurance companies also have exposure to to exposure have also companies insurance Pension varies investments property ofindirect share The isKeva sector pension the in player significant Another Source: TheFinnishPensionAllianceTELA Varma Insurance Pension Veritas Keva

The Finnish Property Market 2014 29 The Finnish Property Market 2014 30

Photo: NCC / Mikael Linden from 3.1 16.3 %. to from funds, between markedly varied investments property on Returns investments. market money and bond their on returns poor rather reported institutions most markets, challenging well 2013. in the In performed which equities, listed to allocation funds’ the on dependent mainly was of returns level The %(Ilmarinen). 9.8 and %(Etera) 0.3 between varying 2013, for results with portfolios investment their on returns funds. property unlisted launched also have companies These portfolios. investment property their manage to companies management separate founded have groups, LocalTapiola Pohjola OP and Two institutions, main ofthe providers. service to management property and leasing outsourced have others whereas management, asset of in-house importance the emphasise thus and particular in interface tenant their on control retain to want institutions Some pursued. are strategies differing some functions, management asset and ofproperty organisation the In in-house. kept are functions management portfolio thus and themselves, institutions by made be decisions investment that requires legislation Finnish The Finnish pension institutions reported relatively good good relatively reported institutions pension Finnish The total assets invested are pension institutions’ pension institutions’ “Some 10.5“Some %of in property” in in the Helsinki metropolitan area and the Tampere region. Tampere the and area metropolitan Helsinki the in properties retail and office on concentrate will company the future, the In Turku. in assets well as as portfolio, property logistics its off sell also it will Furthermore, 3-5 years. next the during businesses Russian and fund property its divest to it plans whereby strategy, in change amajor announced 2013, Sponda September In funds. five in manager and/or aco-investor iscurrently which unit, business management fund aseparate has also Sponda Russia. in Petersburg St. and Moscow in well as as Finland in cities main the in properties logistics and retail ofoffice, consists currently portfolio of2012). end at the (€3.26 billion billion €3.4 to Sponda’s 2013. in performance strongest the showed Technopolis’s shares companies, main the Of 9%. about by increased only index sector estate real the period, same the year. the During 23 %during by increasing Index 25 Helsinki 2013,in OMX the with million. €30 2013, at some stood October in listed was which Trust, Investment Estate Real Residential Orava new ofthe 2013. value Market during slightly decreased Sponda of that markedly, whereas Techopolis and increased Citycon of capitalisation year. Market previous the to compared 19 ofsome % increase an showing billion, €2.6 at around stood companies three ofthese value market combined of2013, end the At Technopolis. and the Sponda Citycon, Helsinki: in Exchange Nordic OMX ofthe list main the on listed companies property recognised three only are There sector property Listed OMX HelsinkiIndexandRealEstate-index(index,7/2000=100) property companies Share performanceoftheFinnishlisted 100 200 300 400 500 600 0 At year-end 2013, Sponda’s property portfolio amounted amounted portfolio 2013, property Sponda’s At year-end strongly performed market equities listed Finnish The

07-2000 OMX HelsinkiRealEstate-index 01-2001 07-2001 01-2002 07-2002 OMX HelsinkiIndex 01-2003 07-2003 01-2004 07-2004 01-2005 07-2005 01-2006 07-2006 01-2007 07-2007 01-2008 07-2008 01-2009 07-2009

Source: NasdaqOMX 01-2010 07-2010 01-2011 07-2011 01-2012 07-2012 01-2013 07-2013 01-2014

Photo: Sato Ilmarinen acts as co-investor for Technopolis. for co-investor as acts Ilmarinen Norway, in campus Fornebu the In Lithuania. and Norway in investments first its well as as Espoo, in Campus Falcon 2013in include acquisitions biggest 2012).in company’s The €1.4 of2013 end at the billion (€1.0 around totaled billion portfolio property company’s The Norway. and Lithuania Russia, Estonia, 11 in Finland, in 19 cities owns campuses 2013, in it currently and significantly operations its expanded Technopolis companies. growth and start-up for mainly management facilities to related services support business co-investor. as Ilmarinen with Lappeenranta in IsoKristiina and CPIB, with Stockholm in Galleria Kista GIC, with Espoo in Omena Iso including institutions, several with deals venture joint significant some made has Citycon of years, couple past the During Helsinki. in centre Esplanad Galleria Ilmarinen’s manages It also Finland. in located are 22 centres, of2012). end at the billion (€2.7 billion 35 the shopping Of €3.0 of some of2013, end the At aportfolio it had Lithuania. and Estonia Denmark, Sweden, Finland, in properties retail and centres shopping manages and owns Citycon Technopolis specialises in leasing space and providing providing and space leasing in Technopolis specialises “Sponda is undergoing undergoing is “Sponda major changes in its business strategy” business market organisations. market labour Finnish major some include also shareholders VVO’s owners. largest VVO’s are Ilmarinen, and Varma companies, insurance pension largest two Finland’s billion. €3.35 to amounted portfolio property ofVVO’s value fair the of2013, end the At locations. 45 in apartments residential portfolios. market major well as as portfolios residential subsidised significant holds ofwhich each VVO, SATO Avara, and properties: residential in investing companies property non-listed major three are There Non-listed companies property 790 rental apartments. rental 790 of2012), (€32 end million at the million €79.2 comprised and at stood portfolio company’s ofthe of2013,end value fair the the At properties. residential rental in investing companies investment estate real listed for transparency tax provides which legislation, fund property Finnish the under operating fund first It isthe exchange. OMX Helsinki the in newcomer VVO’s portfolio consists of around 40,000 rental rental 40,000 ofaround consists portfolio VVO’s Orava Residential Real Estate Investment Trust isa Trust Investment Estate Real Residential Orava “The biggest non-listed“The property companies property invest in residential properties”

The Finnish Property Market 2014 31 The Finnish Property Market 2014 32 institutions. domestic are investors the funds, first two its in investors; private to offered is also which fund, anew Pohjola launched 2013, In strategies. differing with funds property five launched has LocalTapiola investors. other and shareholders their to funds offering business, management fund the into expanded also have companies These companies. separate in management investment property their organised have that investors institutional Finnish traditional are LocalTapiola company. Pohjola and management investment global isa funds, Finnish three manages which Management, Asset Aberdeen areas. business ofthe isone investment property whom for company equity private a Finnish isoriginally funds, property Nordic one and Finnish three manages currently which CapMan, significantly. strategies their affects also which backgrounds, diverse funds. 50 almost managing companies, management fund estate real Finnish 20 some currently are There investors. private to offered mainly are funds These structure. fund mutual open-ended semi- the under launched were funds investment estate real 2012-2013, During special four institutions. domestic for structure isa favourable of view point a taxation from which partnerships, limited as structured typically are at institutions targeted funds property non-listed Finnish investors. private to offered funds several also are there Currently investors. institutional at domestic targeted mainly were products fund first The ofyears. couple past the during significantly increased has funds property ofnon-listed supply The companies management fund estate Real domestic specialised property investment company. investment property specialised domestic ofa example isan Estate Real HYY Wereldhave. Polar and IVG Genesta, include These organisation. existing an with company a Finnish bought or Finland in office an established either have that investors foreign major some include property company. the in shareholder biggest the being Elo company insurance pension the with institutions, Finnish major are shareholders Avara’s cities. larger the in concentrated mainly apartments rental Group. LocalTapiola the and Suomi fund life the Ilmarinen, include owners major Other %ofSATO’s 45 shares. about owns Varma company insurance pension The occupiers. owner- for sold be to properties residential develops also SATO buildings, residential of rental management and of2013end (€2.1 2012). in development the billion Besides at the billion €2.3 at about stood portfolio investment of the value market The cities. Finnish major in being rest the with Petersburg, St in located are 450 around ofwhich apartments, Finnish property fund management companies have have companies management fund property Finnish Non-listed property companies investing in commercial commercial in investing companies property Non-listed 8,000 about manages and owns currently Oy Avara 23,800 about comprise holdings SATO’s current their operations significantly in 2013. eQ Health Care, Care, 2013. in Health eQ significantly operations their expanded all They Fennia. company insurance the example, recent most the as and Investment, Pohjola Property significant include managers eQ Bank, Ålandsbanken, most the sector, fund property mutual emerging the In Capital Partners. Capital European MK a Luxemburg-based from properties 41 retail of aportfolio 2013, it acquired and November in established was I, Retail Trevian fund, second company’s 2014. The early in Hemsö Swedish the to sold was portfolio The fund. the in investors main the also are who Etera, and Varma companies insurance pension from million €100 ofsome portfolio property care ahealth acquired I, Care Trevian fund, first 2013. in Its funds two launched which Management, Asset CBD. Helsinki in centre shopping Forum the manages Capita Forum institutions. major ofsome clubs are Investment Property VVT and Investment Property NV area. metropolitan Helsinki the in properties office major four in invested has fund their and funds, pension Finnish offour venture isajoint Exilion Capita. Forum AB and VVT Investment, Property NV Exilion, include arrangements of kinds ofthese Examples purposes. specific for fund aproperty establish to forces join ofinvestors number alimited where arrangements venture joint or deal-like Quorum. and Taaleritehdas example, for include, property to expanded have that companies management investment Other funds. other three exited previously have and funds, existing three have currently They needs. client to cater that funds niche specialised smallish, typically are funds Auratum’s Petersburg. St in one and Finland in invest two funds, three their Of investment. residential in specialised are funds estate real ICECAPITAL’s class. asset alternative one as clients their for funds property offer currently that companies banking investment ofFinnish examples are Auratum and ICECAPITAL A newcomer in the fund management business is Trevian isTrevian business management fund the in A newcomer club- as considered be can funds Finnish ofthe Many expanded significantly significantly expanded “There are almost are “There 20 property fund fund 20 property “Property funds funds “Property management management companies” in 2013” in /vehicles funds and managers fund property Finnish Sources: Survey to the managers, press releases, www-sites releases, press managers, the to Survey Sources: Aberdeen AssetManagementFinlandLtd Aberdeen MANAGERS, FUNDS Asuntoturva Ltd Asuntoturva Auratum RealEstateLtd CapMan RealEstateLtd BPT AssetManagementLtd Exilion CapitalLtd Fennia AssetManagementLtd FIM RealEstateLtd eQ Fund Management Ltd (Finnreit FundManagement) eQ FundManagementLtd(Finnreit AB Forum CapitaLtd AB Forum ICECAPITAL REAMLtd LocalTapiola RealEstateAssetManagementLtd NV Property Investment / VVT Property InvestmentLtd Investment/VVTProperty NV Property Orava FundsPlc Pohjola Property InvestmentLtd Pohjola Property Quorum Ltd Quorum Sponda Plc Taaleritehdas Plc Trevian AssetManagement Ålandsbanken EPI Healthcare IKy EPI Healthcare CapMan Nordic RealEstateKy CapMan Nordic Aberdeen RealEstateFundFinland Aberdeen Aberdeen Property FundFinlandIKy Property Aberdeen Kauppakeskuskiinteistöt FEAKy Quorum Asuntoturva IKy Asuntoturva Quorum Quorum Asuntoturva IIKy Asuntoturva Quorum Asuntoturva OviKy Asuntoturva AKR Tuotto Ky AKR Tuotto IIKy AKR Verto Ky AKR Verto AKR AuraKy CapMan RealEstateIKy CapMan REIIKy CapMan HotelsREKy Exilion RealEstate1Ky Fennica Commercial Properties I(non-ucit) Properties Fennica Commercial FIM ResidentialFundIKy eQ Care (non-ucit) eQ Care Forum FastighetsKb Forum ICECAPITAL HousingFundIKy ICECAPITAL HousingFundIIKy ICECAPITAL HousingFundIIIKy ICECAPITAL Asunto2012Ky Tapiola KRIKy Tapiola KRIIIKy Tapiola KRIVKy TuuliTapiola Ky LähiTapiola AsuntoPrimeKy LähiTapiola KRPK2Ky NV Property FundIKy NV Property VVT Property FundI VVT Property Plc Orava ResidentialRealEstateInvestmentTrust Real EstateFundFinlandIKy Pohjola ResidentialFundIKy OP Vuokratuotto (non-ucit) Quorum RakennuttajaIKy Quorum Quorum RakennuttajarahastoIIKy Quorum Quorum KehitysrahastoIKy Quorum Sponda FundI Sponda FundII Sponda FundIII 7 residential funds 7 residential Trevian IKy Care ARIF IKy Trevian RetailIIKy Ålandsbanken Residential fund(non-ucit) LAUNCH YEAR 2006 2006 2007 2007 2008 2010 2007 2011 2010 2007 2012 2005 2007 2013 2008 2007 2013 2013 2012 2008 2006 2009 2012 2012 2007 2008 2009 2012 2013 2013 2006 2012 2010 2006 2013 2013 2012 2013 2013 2006 2008 2012 2010- 2013 2013 2012 PORTFOLIO Office, retail, logistics,industrial Office, Office, retail, logistics,industrial Office, Shopping centres, retail retail Shopping centres, Residential Residential Residential Office, retail, logistics Office, Retail, logistics, healthcare Retail, logistics,healthcare Office, retail Office, Healthcare Office Office, retail, logistics Office, Office, retail, logistics Office, Office, retail, logistics, hotels, residential retail, logistics,hotels, Office, Hotels Office, retail, logistics,hotels Office, Commercial properties Commercial Residential Healthcare Retail, office Residential Residential Residential Residential Office, retail, logistics Office, Residential Residential Wind power Wind Residential Office Commercial properties Commercial Commercial properties Commercial Residential Office, retail, logistics,industrial Office, Residential Office, retail, residential retail, Office, Residential development Residential development Office, retail, logistics,industrial Office, Logistics, industrial Logistics, industrial Logistics, industrial Retail Residential Healthcare Retail Residential

The Finnish Property Market 2014 33 The Finnish Property Market 2014 34 Largest transactions by foreign investors in Finland in 2012-2013 in investors Finland by in foreign transactions Largest Finland. in players significant also are Niam and Genesta Sveafastigheter, managers fund originated Swedish- portfolio. their in asset centre shopping a major have of which both Fund, Retail Nordic Cornerstone’s and Wereldhave company listed Dutch the include investors significant Other agreements. lease triple-net long with ofassets type sale-and-leaseback in invested mainly has who Renting, Nordisk isRBS million, €800 ofaround portfolio counterparts. Finnish their as acting eg.GIC) (representing Citycon and Sponda as such companies with representatives, local as co-investors Finnish have players foreign company. Some ofthe employees former the with agreement management a through managed be will investments Finnish the and closed, be will office Helsinki the that 2014, it announced early in but Finland, in office alocal had also Sveafastigheter Cornerstone). and Niam Genesta, IVG, (for instance, Finland in offices own their established have of them Some practices. management and strategies varying with of 2013. end at the billion €9.3 some to amounted investors foreign of holdings The market. investment property Finnish total %ofthe 20 some for account currently investors Foreign International investors million. €70 ofsome worth a combined with properties several acquiring 2013 end year at the by investments first its made which I, Properties isFennica business this in newcomer latest The operations. its for start agood had also has and properties, residential and commercial both in invests Vuokratuotto OP ofoperations. year first its in apartments rental 800 700- to portfolio its increased and channel, sales bank’s the through investors attracted fund residential Ålandsbanken’s of2013. end at the million €70 some worth properties care health of34 2012, in aportfolio had established Pöyry Plc’sPöyry headquarters properties retail Four (50%) Centre Shopping Kamppi headquarters UPM 11 Aleksanterinkatu Eventes Business Garden portfolio Bronda properties store grocery 68 of Portfolio /PORTFOLIO PROPERTY The biggest foreign investor in Finland, with a total a total with Finland, in investor foreign biggest The of players group adiversified form investors Foreign 2013Q4 2013Q4 2013Q4 2013Q4 2012Q3 2012Q3 2012Q3 2012Q1 DATE n/a n/a n/a 74 ~100 60 62,3 ~170 (M PRICE € ) Niam Nordic Core Plus Core Nordic Niam Redito Estate Real Allianz GmbH Estate Real Investment Union Asset Management Capitol III, Fund Sveafastigheter Cordea Savills Union Investment Real Estate V Niam PURCHASER both these companies. these both in investor main isthe fund AP3 Swedish The Trevian. from properties care ofhealth portfolio million a€100 bought 2014, early In Hemsö Sciences. ofApplied Turku University the by occupied building the in investment Finnish first its made who Hemsö, well as as HOK-Elanto, from portfolio retail sqm a40,000 acquired who Redito, Swedish the 2014. 2013in early and transactions several through Finland in growth its continued Sagax Also UPM. and Skanska ofboth offices head of the acquisitions through million €100 than more by portfolio Finnish its expanded Investment Union year. Also whole the of Finland in transaction largest the was This December. in Fund retail Nordic Cornerstone’s from Kamppi centre ofshopping %share a50 acquired who Estate, Real Allianz volume. transactions total % of the 20 some represents This million. of €480 volume year’s previous ofthe compared increase significant a represents which million, €700 about to amounted Biggest foreign investorsinFinland RBS Nordisk Renting RBS Nordisk Wereldhave Finland The newcomers in the Finnish market in 2013 in market include Finnish the in newcomers The by 2013 in done was investment significant most The volume investment total investors’ 2013,In foreign Union Investment Sveafastigheter Niam 0,0 Pöyry Plc Pöyry HOK-Elanto Cornerstone Real Estate Advisers) by (managed Fund Retail Nordic UPM Niam III Nordea Life Assurance Finland Assurance Life Nordea Invest Peab RBS and estate Bankruptcy SELLER 0,1 0,2 0,3 Source: KTI(queryforinvestors) 0,4 0,5 0,6 Source: KTI EUR billion 0,7 0,8

Photo: NCC / Sini Pennanen and implementing the strategy. the implementing and executing in role amajor play will Senate and of premises, cost and efficiency space to regard with objectives ambitious sets strategy new 2014. The early in confirmed be to isexpected which strategy, workplace new its preparing also is state The years. few coming the in properties Senate for challenges increasing create Army, will Finnish the in reform amajor including operations, and administration state of the Restructuring unit. expertise environment working internal state’s the as strategy its strengthening iscurrently and ofFinance Ministry ofthe control the under operates Senate Properties. Senate to transferred were of Antiquities Board National ofthe of2014, 47 buildings beginning the In Army. Finnish the by used properties well as as buildings, cultural and prisons ministries, and agencies state by used offices of consists portfolio sqm million 6.5 diversified Its billion. €4.6 ofsome sheet abalance with Finland, in owner property largest the far is by Senate authorities. state by needed longer no properties the redeveloping and selling for department aspecific has Senate investors. property sector private and agencies state between agreements lease in intermediator an as acts It also holdings. property state’s the let and manage develop, is to task whose Properties, Senate called enterprise agovernment-owned on holdings property ofits most concentrated has state Finnish The market. property Finnish the in players important very are entities sector Public Public sector “The Finnish“The state is aiming at increasing space efficiency” space value of which amounts to some €10 some to billion. amounts of which value estimated the stock, state-subsidised mainly own companies These companies. separate through portfolios property ofproperties. management and for need the on impact an have also will strategies provision service and/or structure municipal the in changes significant potential future, the In situation. financial tight the to due challenges considerable facing are management and ownership property Municipalities’ occupiers. the from rents internal charging by instance, policy; for management a market-oriented apply to tend and functions management players. market private to let they that of space amount a significant have also particular, in ofHelsinki, City the as such municipalities, €15 Some billion. around to amount holdings property their that It isestimated use. they premises ofthe majority vast the own typically They 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 and markets regional in third. remaining the owning state the with companies, these of shares ofthe majority atwo-third’s own Ltd). Universities ofFinland Properties (University Finland in elsewhere one and Properties), University Aalto and Properties University (Helsinki area metropolitan Helsinki the in buildings university manage and Two own companies of the buildings. university managing and ofowning purpose 2010 sole the for in founded were which companies, limited three by owned currently are properties university Finnish ofthe majority The Most municipalities also own significant residential residential significant own also municipalities Most estate real their centralised have municipalities major All players significant typically are municipalities Finnish

The Finnish Property Market 2014 35 The Finnish Property Market 2014 36 properties Owner-occupation ofcommercial through relatively long leases. In 2013, the most significant 2013, In significant most the leases. long relatively through buildings these in tenants as remained companies the cases, many in and, properties their sold have corporations strategies. ofthese execution the enabled has market finance and investment property of the development and broadening The management. estate real their to regard with strategies billion. 80 and €70 between be to is estimated companies Finnish of the holdings property ofthe value The investors. by owned are properties of office majority %), (60 the whereas properties retail the in common (approx. 85 %), sector fairly and industrial in common is extremely Owner-occupation %. 60 around somewhere be to estimated iscurrently ofowner-occupancy proportion The owner-occupied. been traditionally has stock property of commercial majority The portfolios. property of large ownership their through market property Finnish the in role asignificant played have occupiers Traditionally, property Corporations 100 % 10 20 30 40 50 60 70 80 90 0 During the past couple of years, several major Finnish Finnish major several ofyears, couple past the During different adopted have corporations Finnish Major investors■smallandowner-occupiers ■ professional Ofc eal(nl oes Industrial Retail(incl.hotels) Office Source: KTI premises. premises. their rent typically and strategies, workplace sophisticated increasingly pursuing are space, production light or office use predominantly which companies, IT/telecommunication and media services, professional as such Companies properties. fund. the in investor an remaining while Sweden and Russia Finland, in ofproperties worth million €750-950 some transfer it would where fund, a property establishing it is considering that 2013, announced Kesko late In investors. to assets ofproperty amounts significant sold years, the over it has, and finance, property its to regard with strategy active amore pursued has Kesko corporations, two the Of market. retail the in landlords significant also are They investors. other from premises rent also but sheets, balance their in portfolios property significant hold both They strategy. business their in development of property role the emphasise and market property the in players active are chains, retail Finnish major two the Kesko, and SOK investors. foreign and domestic both attracting continue leases long with corporations Finnish major for rented buildings Modern Etera. by is owned which Media, Alma for well as as Ilmarinen, by isowned Finnair, which for offices head new ofthe completions the instance, for 2013 in deals included, office corporations’ main 2014. Other early in completed be to isexpected CBD Helsinki the in office head company’s the of 2013. sale The during executed already were transactions some and properties, operational ofits most sell it will that announced Corporation Sanoma Also Pöyry. and UPM Skanska, by out carried were transactions sale-and-leaseback Industrial companies still typically own their production production their own typically still companies Industrial “Investors interested are in sale-and-leaseback deals with major major with deals corporations”

Photo: NCC / Mikael Linden funds. property some manages also 2012in currently and founded was which Management, Asset isTrevian sector service management asset the in player Anew portfolios. / property loan non-performing with dealing servicers loan some with deals new into entered recently has company The provider. service management asset and investment is a boutique Oy. Advice Newsec and Oy Valuation Oy, Newsec Management Asset Newsec companies: separate three into activities its organised It has 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 the in player major isanother group, companies. and property institutions major some with deals management new through expanded recently has company company. The management services. advisory and valuation management, property commercial for services management offers also and portfolios, residential investors’ major some manages Group, ofthe company affiliate another Management, Realia markets. management and brokerage property residential the in player major management. property residential and management and development centre shopping management, property commercial divisions: three in is organised Group Ovenia firms. management smaller several and Oy Arenna company management property Oy, residential Realprojekti specialist centre ashopping purchasing by years recent in acquisitions company through expanded has Ovenia corporations. well as as investors, international firms. equity private by held iscurrently companies these ofall ownership majority The Management. Realia and Corbel Ovenia, include companies service management property and asset Finnish major The companies. Nordic and domestic by dominated is market services management property and asset The services management property and Asset sector 3.2 service estate Real Amplion Asset Management, part of the Catella Group, Group, Catella ofthe part Management, Asset Amplion Stronghold- Swedish-originated ofthe part Newsec, property and asset domestic isanother Oy Corbel a companies, daughter its is, through Group Realia and Finnish major include clients Oy’s Ovenia company acquisitions” management are firms expanding through “Main domestic valuation firms, Peltola & co serves some major investors. major some Peltola serves &co firms, valuation local the Of players. domestic mainly servicing firms service valuation and transactions local ofsmaller a couple also are Oy. There Tuloskiinteistöt company service leasing and transaction local the with agreement a collaboration through market the in Wakefield isrepresented and Cushman Finland. in offices have Tenzing also and Leimdörfer advisors Swedish-originated services. management project well as as brokerage, leasing and transaction offering office Finnish local asmall has International Oy. Colliers Finadvice firm advisory transactions a Finnish acquired It recently agreements. collaboration through represented been previously having 2009, in Helsinki in office own its established CBRE brokerage. and consultancy leasing valuation, transactions, in players major of the one become to grown has and 2007 in market the entered LaSalle Lang Jones 2004. since market Finnish the in present been has and market, the enter to first the among was DTZ firms, international major the Of market. property commercial Finnish the in services brokerage and advisory valuation, in player services. valuation in Savills with co-operates currently Realia services. transaction and advisory valuation, offer also Management Realia and Newsec companies, management major the Of companies. global big and firms entrepreneurial domestic of small mixture acolourful includes market service advisory The services transaction and Advisory, valuation property and technical management service market. market. service management technical and property the in player 2013, is a significant summer in YIT company management. services on concentrating only ofa company example is an Management Service Coor SOL. and ISS include services management offer currently also who maintenance) and catering cleaning, as (such provision service traditional in backgrounds with companies service largest The chain. service whole the offer to expanded have that companies service traditional and companies management specialist both by offered are occupiers to services management Oy. Facilities J. Juhola Kiinteistömanagement and Oy Oy, Kiinteistöjohto KJ Realco include segments selected in investors property foreign and Swedish-originated Catella Property Group is a major is a major Group Property Catella Swedish-originated Caverion Oyj, which was separated from construction construction from separated was which Oyj, Caverion institutional some servicing players domestic Other advisory service firms firms service advisory “Most international“Most are representedare in Finland”

The Finnish Property Market 2014 37 The Finnish Property Market 2014 38 in co-operation with banks in financing deals. deals. financing in banks with co-operation in act or clients, their to directly either debt property provide can funds insurance life and Pension investments. property direct than position better in debt gives framework II Solvency the whom for funds, insurance life for instance, for isattractive, This investments. estate real for debt providing in interest increasing showing are institutions Finnish extent. some to decreased have margins year, the and past the during slightly improved however, has, ofdebt availability The ratios. loan-to-value moderate quite for lending offering are and investors, solvent and cash-flow stable with assets core on concentrating loans. terminating all cover to sufficient is not debt of availability the sector, banking the in regulation tighter and conditions changed to However, due disruptions. market major any caused not have debt ofthe terminations the Therefore, breaks. covenant potential despite interests, the cover to able are they as long as debtors their with patient be to tend banks Local market. Finnish the in topic discussed awidely become has 2008 and 2005 between peak the during investments finance to used debt ofthe refinancing Hessen-Thüringen). (Landesbank isHelaba market estate real the Finnish the in active currently player international active most The years. recent in Finland in offices local their have, however, closed ofwhich most lenders, estate real specialised foreign some or transactions projects. financing commercial property in active most the been recently has SEB banks, these Of Banking. Merchant SEB and Bank Danske and Pohjola Group OP- Bank, Nordea including banks, Nordic and local major the by is provided financing estate ofreal part major The financing Property services in Finland. in services specific estate real offer also PricewaterhouseCoopers, &Young and Ernst KPMG, as such firms, consultancy business Global Finland. in unit estate real aseparate has Finance Corporate Enskilda SEB Also Estate. Real Aventum and Finance Corporate Advium including companies, domestic some by offered are services finance corporate In the current market conditions, lenders are still mainly mainly still are lenders conditions, market current the In circumstances, market in changes recent the to Due attracted also market Finnish the peak, market the During In addition to the actual transaction services firms, firms, services transaction actual the to addition In property investments” property are providingare debt for “Finnish institutions developed for residential use. residential for developed be to portfolio its in properties old office some acquired has Auratum instance, For strategy. their in development property include also funds property Some development. estate real on also focusing company investment estate real isanother Partners Property HGR project. the in investor is aco- Ilmarinen fund Pension use. office and centre shopping for redeveloped is being building old industrial an Pori,where in project amajor out carrying is currently company The premises. of old industrial redevelopment on concentrates isRenor, which example One markets. niche their in development property in active funds and companies strategies. their in included countries other in well as as Finland in both areas core own their in development property in players active Technopolis are and Citycon Sponda, portfolios. own their to assets develop development. property commercial than risky less isconsidered which development, residential in strategies active more slightly pursue typically Institutions properties. vacant for uses new for look instance, for can, they where portfolios, their in assets ofexisting redevelopment the emphasise strategies development Their pre-let. are premises ofthe majority the when aproject enter only typically They development. property commercial concerning strategies conservative municipalities. to revenues tax bring and employment increase both they because issues planning in authorities local with power bargaining strong have typically They developers. property professional and significant – are particular in Kesko, cities. major other and area metropolitan Helsinki the in concepts park business of its developer active an as especially known is Development Property NCC it develops. buildings the in investor as remain also circumstances, certain under can, which Nordic, Development Property Commercial Skanska through Nordics the in operations development its organised has Skanska investors. international and domestic both with cooperated have and years recent in field this in active been all have companies Peab. These SRV and Lemminkäinen, Hartela, YIT, Skanska, NCC, include development property owners. their by handled is mostly buildings ofexisting development the whereas development, new in players active are They development. property commercial in specialises that arm a separate have typically who companies construction by dominated is market development property commercial Finnish The Property development There are also some smaller non-listed property property non-listed smaller some also are There actively also companies investment property Finnish quite have traditionally investors Institutional and SOK retailers – large owner-occupiers Some commercial in involved companies construction Major

Photo: SRV and Skanska’s new head offices. offices. head new Skanska’s and UPM’s in invested instance, who, for Investment, Union and centre, shopping Kamppi ofthe %share a50 acquired who Estate, Real 2013 in Allianz were investors foreign active most year. The previous the to compared %growth a 45 showing million, €700 to amounted share investors’ Foreign of€1.1 volume atotal billion. with of2008 beginning the since quarter active most the was year of the quarter last The 2012. to compared a12 %increase 2013,in represents which billion €2.4 some totalled volume transactions property The investment4.1 market 2013 in Property practices market structure and investment performance, sectors:4 Property favoured property sectors, with volumes amounting to 31 to % amounting volumes with sectors, property favoured most the were properties care health and residential quarters, three first the €1.3 ofonly During volume billion. a total partnerships. fund to converted were holdings direct formerly where funds, institutional in restructurings some well as as investors, private to offered mainly funds launched newly by increased was activity the sector, this In %share. a29 with group investor active most the were funds property players, domestic Among The first three quarters of the year were very quiet, with with quiet, very were year ofthe quarters three first The increased by 12 %in “Transaction volume 2013” potential occupancy problems. problems. occupancy potential with and locations secondary in properties for buyers find to difficult relatively It isstill place. taking from transactions prevented however, effectively segment, this in supply limited The compressing. continued of which yields the cash-flow, secured with and locations good in assets prime at low-risk targeted mainly be to continued interest Investor transactions volume. transactions 31 to year’s whole %, the in amounting share, largest the represented offices and out, carried were transactions property retail and office major however, some quarter, last the In respectively. volume, transactions total 24 %ofthe and investment marketbysectorEURbn;% The structureofFinnishproperty 12; 26% 4; 8% “New funds invested funds in“New residential and health health and residential 3; 5% care properties”care 2; 4% 13; 26% 15; 31% ■ Other ■ Hotel ■ Residential ■ Industrial ■ Retail ■ Office Source: KTI

The Finnish Property Market 2014 39 The Finnish Property Market 2014 40

Photo: NCC / Sini Pennanen clients, or co-operating with banks. banks. with co-operating or clients, their to directly either debt providing investments, property finance to started companies insurance life and pension some phenomenon, anew As moderate. remained ratios to-value loan- and risk, to regard with cautious be to continued banks slightly, eased ofdebt pricing While activity. their increased also banks German some and investments, property finance to continued banks 2013. Nordic The during 2014. early in portfolio this divested fund The Etera. and Varma companies insurance pension from properties care health acquired and fund care health a new established Management Asset Trevian when made was million, €100 some to amounting purchase, biggest of2013. second The transaction biggest the was summer. the in fund Auratum’s by towns mid-sized in properties retail ofthree purchase the and January, in Niam by properties office oftwo acquisition the were transactions property ofdistressed examples Other price. purchase 2007 original of the a fraction was price the transaction, this In Pramerica. TMW from Pitäjänmäki in park Business Moveres building office modern relatively ofa acquisition the through group, insurance Sampo by run afund Hallikiinteistöt, Saka by out carried was pricing. overall on impact significant any have thus didn’t they and portfolios, or properties of smaller mainly out, carried were sales distressed few 2013, In sales. only property ofdistressed impacts market or problems significant any been not have there liquidity, The availability of debt financing improved slightly slightly improved financing ofdebt availability The centre shopping Kamppi ofthe acquisition Allianz’s property ofadistressed purchase aggressive most The market secondary in challenges continuing the Despite 2000-2013 Total returns byproperty sector vacancies and increasing costs. high by pressured be to continued return Income sectors. property commercial all for negative was growth Capital 5.9 to 2012. %in compared decrease aclear represent figures These %. of6.3 of-1.8 income anet %and growth capital ofa 2013, %in of4.4 consisting return atotal produced market property Finnish the Index, KTI the to According type, 2005–2013,%ofalltransactions Distribution oftransactionsbyproperty 10 12 14 16 18 % 100 0 2 4 6 8 % 20 40 60 80 0

2000 ■Other property ■ MixedCare ■IndustrialHotelResidential ■ RetailOffice All property Office Office Industrial Residential All property 2005 2001 akt mutd to amounted market 2002 “Total on the return 2006 Finnish property property Finnish

2003 4.4 %in 2013” 2007 2004

2005 2008

2006 2009 2007

2008 2010 Retail 2009 2011 2010 Source: KTIIndex

2011 2012 Source: KTI 2012 2013 2013

Photo: SATO office space. space. office redeveloped or ofnewly completions through years recent in significantly increased has region Helsinki the in stock Office stock. office the in reflected isalso which size, same of the centres European other many in than isgreater market property commercial and economy Finnish the in area metropolitan Helsinki ofthe dominance The cities. major other in million 3.4 another and area, metropolitan Helsinki the in islocated ofwhich million 8.4 about metres, square 19 issome million Finland in space ofoffice stock total The Stock market 4.2 office The quarterly Transaction volumeintheFinnishproperty market, 1000 MEUR 0 1 2 3 4 5 6 7 06 20 20 20 21 01 21 2013 2012 2011 2010 2009 2008 2007 2006 ■ Q1Q2Q3Q4 can be found both in the Helsinki central business district district business central Helsinki the in both found be can These headquarters. company as typically used buildings is single-tenant category second The areas. office recognised and centres city in located typically buildings, office tenant cities. 17 major and other %in area, metropolitan Helsinki the in located are database index KTI the in offices 75 %ofthe About years. recent in offices to allocation their decreased have investors some investments, property ofoffice performance poor the to However, due database. total %ofthe 29 some represent currently offices example, for Index, KTI the In portfolios. property institutional Finnish in role a significant played traditionally have Offices Players The largest proportion of investable office stock ismulti- stock office ofinvestable proportion largest The Source: KTI

The Finnish Property Market 2014 41 The Finnish Property Market 2014 42 % ofmarketvalue KTI Indexdatabasebyproperty sector particularly in the Helsinki metropolitan area. area. metropolitan Helsinki the in particularly segments, office all in invested also have investors Foreign strategies. focused more have to tend funds and companies property whereas portfolios, their in types office three all hold typically institutions Domestic development. new through years recent in rapidly quite increasing been has particular, in parks, business in premises ofoffice supply The area. metropolitan Helsinki the in mainly connections, traffic good near located properties is business-park-type category office third The investors. with together developed typically are offices development, ofnew case the in and, investors, to properties headquarter their sold have companies several years, recent during but owner-occupied, typically were properties headquarter past, the In area. metropolitan Helsinki the in areas other some in (CBD) and 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Offices ■RetailIndustrial ■ ResidentialOther ■Offices 0 20 and byproperty sector, EURbn Commercial property stockestimatedvaluesbyregion Warehouse, area Helsinkimetropolitan * Turku, Tampere, Oulu,Lahti,JyväskyläandKuopio Industrial, Helsinki metropolitan area Industrial, Helsinkimetropolitan Office, Helsinki metropolitan area Helsinki metropolitan Office, Retail, Helsinki metropolitan area Retail, Helsinkimetropolitan Warehouse, othermajorcities* 40 Industrial, othermajorcities* Office, other major cities* Office, Retail, othermajorcities* Warehouse, otherFinland Industrial, otherFinland Office, other Finland Office, Retail, otherFinland 60 80 Source: KTI 0 100 % 5 between €3.50 and €4 per square metre, depending on the the on depending metre, square per €4 and €3.50 between savings. cost for motivation tenants’ and rents of transparency the increasing thus tenants, to separately charged be also can costs Operating rents. gross for % are 80 some agreements, ofrental number By investor. the by iscarried risk cost operational the ofagreements, kinds these In particular. in funds pension some and companies property as such players market active by favoured are These rents. sub-categories. office different between significantly differ agreements of rental terms The varied. are market office the in practices Rental practices Rental Cargotec’s office and manufacturing property in Tampere. in property manufacturing and office Cargotec’s 2013, early in W.P. by and Oulu in invested who Carey, in campus Nokia the Technopolis,acquired by who made were transactions biggest the Finland, in Elsewhere area. metropolitan Helsinki the in out carried were transactions of office majority vast The Vantaa. in office head Pöyry’s in invested who Niam by and Helsinki, in UPM and Skanska of offices head the purchased who Investment, Union by made were transactions office major Other million. €77.5 for Espoo in Park Business Falcon the acquired Technopolis, who 2013. in offices Finnish in investments their increased also Investment, Union and Niam instance for investors, Foreign funds. Aberdeen’s and Exilion’s CapMan’s, as such funds domestic non-listed specialised Technopolis and and Sponda companies listed Keva, and Ilmarinen Varma, as such institutions Finnish Typical operating costs for office properties vary vary properties office for costs Typical operating gross typically are rents buildings, office multi-tenant In The biggest office transaction in 2013 was carried out by by out 2013 in carried was transaction office biggest The large include sector office the in investors biggest The 10 15 20 Source: KTI EUR bn 25

Photo: SRV is responsible for the maintenance of the building. These These building. ofthe maintenance the for is responsible tenant the and applied, commonly are rents net agreements, these In years. twenty and ten long, between quite usually are terms the buildings, single-tenant In occupier. certain ofa needs the for developed often are which units, office period. notice agreed the with term indefinite an for continues contract the which after years, five or ofthree period afixed on agree to common It isalso months. twelve or six three, be might which period, notice agreed the within contract the terminate can parties both ofagreement, kind this In buildings. office tenant costs. operating total 15-20 some %of represents of which each tax, property and electricity heating, include categories cost biggest flow. The cash gross ofthe proportion asignificant represent might they such, As building. ofthe characteristics and location Fixed lease terms are commonly applied in larger larger in applied commonly are terms lease Fixed multi- in applied commonly are terms lease Indefinite metropolitan area Completed office projects in2007-2013Helsinki 100,000 150,000 200,000 250,000 300,000 50,000 0 ■ newredevelopment/extension 0720 0921 0121 2013 2009 2010 2008 20112012 2007 Index. Index. negotiated. are improvements tenant and offered, commonly are rents stepped and periods Rent-free particular. in premises demanding more in tenants retain and attract to order in applied being are means years. five to three for term a fixed normally are agreements Rental usage. actual the on based be can which charge, service separate a plus rent ofafixed consist typically rents park Business facilities. meeting and services postal catering, cleaning, security, reception, as such services business typical comprise options supply. Service service extensive and years. fifteen and five between varying lengths lease with deals, leaseback sale-and- in applied typically also are ofagreements kinds Office rents are typically linked to the Cost of Living ofLiving Cost the to linked typically are rents Office various conditions, market challenging current the In agreements flexible offering by compete parks Business Source: KTI,RPTDocuOy

The Finnish Property Market 2014 43 The Finnish Property Market 2014 44 temporary vacancies rather than lowering rental levels. levels. rental lowering than rather vacancies temporary accept to tend landlords as stable, mostly however, remained have, areas best the in Rents high. remained space vacant of amount the Ruoholahti, in Also challenging. remained Pasila-Vallila and ofPitäjänmäki areas the ofvacancies, terms In centre. city the in slightly increased also space of vacant amount the though even CBD, the in moderate remained rate vacancy the Helsinki, In Kilo-Mankkaa. and Keilaniemi of Leppävaara, areas the in instance, for increasing, space ofvacant 75 2013, %in some to amount the with decreased rate occupancy the Espoo In %. of 88 level year’s previous the from adecrease showing of2013 end ofFinland, the all for 85 %at at about stood portfolios investors’ major in premises ofoffice rate occupancy the database, rental KTI’s In rates havevacancy continued to increase. the areas, secondary the in while submarkets, office prime the in decrease to begun has space of empty amount the markets: of office polarisation the demonstrates rate vacancy of development The area. metropolitan Helsinki the in space office ofempty sqm 1,100,000 some are there total, In economy. the in uncertainty by caused demand softening the well as as years, past the during development new active both of is a consequence 11 of 2012. end % at Oversupply the the from of 2013, increase 12.4 end %at the aclear showing at stood ofHMA rate vacancy office the Property, Catella to According market. office area metropolitan Helsinki rates. vacancy increasing from suffer currently Helsinki, in Ruoholahti and Vantaa, in area airport the Espoo, in Leppävaara as such years, recent in tenants and investors both attracted have that submarkets some Even question. in asset individual ofthe characteristics the on isdependent performance the areas, office other most In increase. to continuing rents top 6%with ofapproximately level at amoderate remains it still year, although past the during slightly increased has rate vacancy the centre, city the in However, even conditions. market challenging the despite strongly rents. lowering and vacancies high from suffer areas secondary whereas rents, high relatively for tenants find to it ispossible buildings and areas best the In performance. different very show to continue buildings and areas office secondary and prime markets, rental the In market 2014 in office The High vacancy rate remains a major problem for the the for problem amajor remains rate vacancy High perform to continues market office CBD Helsinki The “High office vacancy officevacancy “High rate remains amajor problem in Helsinki metropolitan area” metropolitan 2002-2013 Total returns onoffice investments, year. consecutive 6th the for territory negative the in remained values market in Changes %. -4.6 was growth capital and 5.9 to %(6.1 2012), %in 2012).% in decreased income Net of tenants. commitment the without started be to likely not are projects new markets, current the In half. than more for account Töölönlahti the projects these, Of construction. under still was space office ofnew sqm of 2013, end the At 85,000 some uncertainty. economic continuing the to due down slowing is, however, construction New Espoo. in locations various in and Vantaa in area airport the in projects park business some well as as CBD, Helsinki the in Töölönlahtithe area in building first the include projects office completed important 2013. in most The area metropolitan Helsinki the cluster. Nokia the in changes structural the from suffers which Oulu, in found being rise 2013,significant in most the cities with major all in increased rates However, vacancy stable. remain cities major in rents office Prime centres. city outside areas office two or one and centres city in concentrated typically problems. vacancy the solve to way effective an be to proven not has ie. redevelopment use, other for redeveloped been have space ofoffice sqm 130,000 2007,some However,only since use. hotel or residential for instance, for redeveloped, being are premises and explored being are uses alternative operations, leasing their enhancing to addition In problem. this control to means various 10 % -6 -4 -2 0 2 4 6 8 Offices produced a total return of only 1.1 ofonly 2013 %in (4.9 return atotal produced Offices in completed was space office ofnew sqm 85,000 Some are offices region, Helsinki ofthe outside cities In execute to investors the force vacancies office High 2002 Total return

2003

2004

2005 Capital growth

2006

2007

2008 Income return

2009

2010 Source: KTIIndex 2011

2012

2013 percentage points higher than in 2007. in than higher points percentage 0.5 some now are yields regions, other all in 2007, whereas in trough previous the in as level same at the stand currently CBD Helsinki for yields Prime Stockholm. in than lower % 30 some remain and Amsterdam, and Dublin instance, to, for level at acomparable stand rents market Prime Stockholm. to point percentage one ofalmost difference a represents %; which 5.2 at some stood CBD Helsinki volatility. more show typically area metropolitan Helsinki the in areas other whereas position, strong its to due particular in CBD Helsinki the in limited are fluctuations yield and Rental movements. yield and development ofrental terms in both peers, European of its most than stability more show to continues market office Helsinki the conditions, market challenging the Despite other European capitals and Helsinki in yields and rents Office At the third quarter of 2013, the prime office yield in in yield of 2013, office prime the quarter third At the Prime office yieldsQ4/2013 Prime office rents, Q4/2013 Copenhagen Copenhagen Amsterdam Amsterdam Stockholm Stockholm Budapest Budapest Brussels Brussels Moscow Moscow Helsinki Helsinki Warsaw Warsaw London London Madrid Madrid Dublin Dublin Berlin Berlin Milan Milan Paris Paris Oslo Oslo 0 0 200 2 400 4 600 800 6 1000 Source: JonesLangLaSalle,KTI(Helsinki) Source: JonesLangLaSalle,KTI(Helsinki) 8 1200 1400 10 % e/sqm/year

Photo: NCC / Mikael Linden

The Finnish Property Market 2014 45 The Finnish Property Market 2014 46 transactions. 21 to %ofall decreased properties 2013, ofretail share the In 2009. and 2006 between sector property traded most the was retail market, transactions the In sectors. property commercial of all returns total annual average highest the produced has retail 10 years, past the In market. investment the in attractiveness sector’s the supported has properties areas. city major the in located mainly are about 85 are there market. office the in than limited more isclearly market retail the in weight and role cities’ major the that showing stock, property retail country’s whole %ofthe 30 some represents this Altogether, cities. major other in million 4.8 and area, metropolitan Helsinki the in space ofretail sqm million 3.6 about are There Stock market 4.3 retail The The relatively strong and stable performance of retail ofretail performance stable and strong relatively The Centres, Shopping for Council Finnish the to According metropolitan area Completed retail projects in2009-2013Helsinki shopping centres. Major shopping centres centres shopping Major centres. shopping 100,000 120,000 140,000 20,000 40,000 60,000 80,000 0 ■ newredevelopment/extension 09 00 01 02 2013 2012 2011 2010 2009 as Wereldhave, Unibail-Rodamco, as well as retail funds funds retail well as as Wereldhave, Unibail-Rodamco, as such funds and companies property foreign specialised some Pori. in Puuvillakeskus project redevelopment major Renor’s in well as as Lappeenranta, in centre Kristiina Iso Citycon’s in isaco-investor Ilmarinen owner-occupiers. some and Unibail-Rodamco ofElo, consisting agroup by is owned Vantaa in centre shopping Jumbo the –while Etera and Elo –Keva, institutions pension three by jointly isowned Espoo in centre shopping Sello the example, For centres. bigger in investors other with investments joint into enter often also funds Pension Hämeenlinna. in centre new another in invested has Keva and of Tornio Hyvinkää, and cities the in centres shopping new in invested years recent in has Varma example, For ofdevelopment. phases early quite in invest typically they which in centres shopping regional, typically whole, own institutions pension Finnish Some centre. additional one manages and, Finland, in centres shopping 21 partially, or wholly owns, currently which Citycon, investment. and development property retail in players major also are S-Group, and Kesko retailers, Finnish major two The properties. retail smaller or centres shopping in either investing retail, on concentrated also have investors international Some group. this in biggest the being Citycon retail, in specialising players major some also are There units. retail smaller well as as properties hypermarket and centre shopping both including portfolios, investment funds’ pension in well represented istypically Retail database. %ofthe 26 some to amounted 2013, proportion its in and Index, KTI the in sector biggest second isthe Retail Players The Finnish shopping centre market has also attracted attracted also has market centre shopping Finnish The by is dominated market centre shopping Finnish The Source: KTI,RPTDocu Oy Top Finland in 10 centres Shopping CENTER facilities. facilities. parking in increase an and areas ofpedestrian extension supply, space the to facelifts through increased been has centres of city attractiveness the cities, regional many In centres. shopping out-of-town with consumers for compete typically shops street High Helsinki. in retail prime in owners retail significant also are Ilmarinen and Keva Sponda, as such investors office major aresult, as and, buildings, future. the in also business ofits core at the remain will centres shopping that informed strategy, new its in has, and schemes development and properties centre shopping major some owns also Sponda cities. other in ones larger some and area Helsinki the in centres smaller on concentrating centres, shopping in invested also have CapMan, and Aberdeen by managed those as such funds, property Domestic centres. shopping Finnish in investments venture joint into entered also have Estate Real GIC and Estate Real Allianz Estate. Real Cornerstone and Investors Global CBRE by managed MATKUS JUMBO IDEAPARK SELLO ITIS MYLLY KAARI VETURI WILLA OMENA ISO High street shops are typically located in CBD office office CBD in located typically are shops street High NLA RETAIL 356 106 000 85 500 48 000 65 009 49 221 44 97 900 51 800 46 672 46 91 71291 Plc Kesko HOK-Elanto, Elo, Unibail-Rodamco, investors Private Elo Etera, Keva, Plc Kesko Ltd, Finland Wereldhave M Ltd Mylly Kauppakeskus HOK-Elanto Ltd Satama Kruunuvuoren HOK-Elanto Ejendomsinvest, Ltd, Finesco II, RE CapMan Varma, GIC Plc, Citycon Oy Kuopio Centres Retail Ikano Ow ain ners Russia into the fund. fund. the into Russia and Sweden Finland, in properties retail group’s ofthe part transfer and fund property amajor up set to it isplanning that announced has Kesko fund. AP third bythe owned company management isaproperty which Redito, Swedish to portfolio hypermarket a significant sold HOK-Elanto, S-Group, within co-operative 2013, late In biggest the investors. to properties sold have and strategies, finance property diversified more applied have they years, However, recent in buildings. supermarket and of hypermarket developers and owners major remain particular, in Kesko and S-Group operators, Retail investors. foreign attracted also recently has sector flow. This cash secure and leases long typically the to due institutions Finnish by favoured traditionally centres. shopping major in well as as areas retail centres’ city in both locations, prime in space retail high-class modern the by attracted market, Finnish the entered have chains retail Hypermarket and supermarket investments are international new several years, few past the During Source: Finnish Council of Shopping Centres Shopping of Council Finnish Source: VANTAA LEMPÄÄLÄ ESPOO HELSINKI L RAISIO HELSINKI KOUVOLA HYVINKÄÄ ESPOO KUOPIO ocation

Photo: NCC / Timo Pylvänäinen

The Finnish Property Market 2014 47 The Finnish Property Market 2014 48 according to the RAKLI KTI Property Barometer, prime prime Barometer, Property KTI RAKLI the to according 2013, autumn In years. previous in than at pace a slower although increasing, continued have rents retail prime Esplanad. Galleria and Citycenter Kamppi, Forum, Kluuvi, including centres, shopping several accommodates also centre city The streets. two these interconnecting streets well as as Esplanade, Northern and Aleksanterinkatu include streets shopping Main markets. retail the in also performance strong very shown has CBD Helsinki The well. as markets property retail the on 2013, in impact an have will accelerate to started which ofe-commerce, volumes increasing the with together development, This ofconsumers. power purchasing decreasing by economy, ofthe well as as growth slow the by pressured are volumes sales 2014.% in Retail 0.5 some by decreasing continue to is expected volume the and sluggish, remains sales retail for outlook the Commerce, ofFinnish Federation the to year. According previous the to compared unchanged almost remaining sales of total 2013, in volume the poorly with performed sales Retail market 2014 in retail The centres. in shopping increasing isgradually leases ofturnover use The leases. shorter have typically tenants Other leases. shorter in applied sometimes options renewal with 15 even years, and ten to of five premises. oftheir management the steering organisations management property in-house strong have both S-Group and Kesko rent. net with contracts long-term relatively typically are agreements and driven, cash-flow increasingly are especially. shops street high in applied typically are ofterms kinds These period. time infinite an for continued then are and period afixed for made first are agreements cases, many In years. agreements. with business of their continuity the ensure to want tenants as market, retail the in applied commonly more are terms Fixed market. office the in tenants. and investors ofthe preferences the to and unit ofretail type the to both according significantly vary market retail the in practices Rental practices Rental In the Helsinki CBD and in the best shopping centres, centres, shopping best the in and CBD Helsinki the In leases have often tenants anchor centres, shopping In investors properties, supermarket and hypermarket In isthree space retail for term fixed minimum typical The than retail the in longer normally are agreements Rental “Outlook for retail sales remains sluggish” remains project. redevelopment amajor undergoing isalso Lappeenranta in centre Kristiina Iso Ilmarinen’s and Citycon’s Pori. in centre Puuvilla the well as as of Hämeenlinnakeskus those include projects centre shopping new ongoing largest the region, Helsinki the Outside underway. still are Forum and Itis Omena, ofIso those while completed, were Kluuvi and Kaari Ainoa, Ruoholahti, ofCityCenter, projects redevelopment extension/ the area, metropolitan Helsinki the In properties. ofexisting projects extension and redevelopment major by year. previous the to compared points 3percentage ofsome of2013,end adecrease showing 93 %at the at some stood premises ofretail rate occupancy database, rental KTI the to 2013. in According cities major all in increase to started vacancies demand, consumer softening the with However, together years. past the during low level extremely at an remained have markets property CBD. the in than sqm per lower €20 about are centres shopping area metropolitan Helsinki in rents monthly average The month. per sqm per €200 exceeding rents top that, with above clearly are rents locations, and premises best very the In average. on month per at €120 sqm per stood rents In 2013, retail property development was characterised characterised was development property 2013,In retail ofretail rates vacancy demand, rental healthy the to Due

Photo: NCC / Sini Pennanen 2000-2013 Total return onretail investments, Net income increased to 6.6 %(6.4 2012). %in 6.6 to increased income Net %. -0.6 was 5.9 %(5.8 growth 2012), %in capital the where to amounted sector retail the on 2013, In return total types. property main ofother those than volatility greater shown 2013. in transacted were properties ofretail million €500 some total, In Redito. and Estate Real Allianz by out carried 10 12 14 16 % -4 -2 0 2 4 6 8 Total returns on retail properties have, in recent years, years, have, recent in properties retail on Total returns were transactions biggest the market, transactions the In 2000 Total return

2001

2002

2003 being are centres “Major shopping shopping “Major Capital growth

2004 redeveloped” Prime retail rent intheHelsinkiCBD

2005 eur/sqm/month

2006 100 110 120 130 40 50 60 70 80 90 2007 Income return 1995 2008 1996

2009 1997

2010 1998 1999 2011

Source: KTI 2000 2012 2001

2013 2002

2003

2004

2005 Helsinki region. In Helsinki, the housing density is somewhat issomewhat density housing the Helsinki, In region. Helsinki %. 50 to is close households person of single share the example, for Helsinki, In locations. urban in especially steadily, increased has dwellings smaller for demand the Therefore, persons. two ofonly 33 %consists another and households, person single are 41 households Finnish Some %ofthe 2.1 persons. iscurrently and constantly decreased has household Finnish ofa size average The buildings. apartment in are dwellings % of the 44 than More homes. single-family % are 40 about these, Of Finland. in dwellings million 2.6 some are There Stock sector 4.4 residential Rental 2006

Some one fourth of all dwellings are located in the the in located are dwellings ofall fourth one Some 2007 Source: RAKLI-KTIPropertyBarometer 2008

2009

2010

2011

2012

2013

(autumn 2014)

Photo: NCC / Timo Pylvänäinen

The Finnish Property Market 2014 49 The Finnish Property Market 2014 50 occupied housing. housing. occupied owner- and rented for both provided be can support This 2013. in support housing received households 190,000 Some support. housing public through subsidised be also Tenants may cost-based. are rents stock, subsidised of the majority the in and, selection tenant for rules strict specific have Some forms. different between significantly vary subsidy ofpublic types ofdifferent regulation and terms The disabled. the or people elderly students, like groups specific for housing offer who charities or foundations by isowned stock subsidised the -of third one –about rest The stock. housing subsidised total %ofthe 20 about – own – eg. VVO, SATO Avara and status utility public specific with companies sector Private companies. daughter their or municipalities by owned are dwellings ofsubsidised half than More housing. ofrental development for subsidy interest an or loans state-guaranteed as such subsidy, ofpublic kind some with provided been have 390,000 some apartments, these Of apartments. rental 810,000 some are There dwellings. rented rented. are dwellings % ofall 47 some and average, on country the in than common more is housing rented Helsinki, In houses. terraced and detached well as as apartments including of housing, forms all in iswidespread ownership home and homes, owner-occupied awhole. as country the in person per sqm 40 around to compared area, metropolitan Helsinki the in person per 35 sqm at some country, whole the in than higher In total, some 31 % of the Finnish households live in in live 31 households some Finnish %ofthe total, In of consists stock housing ofFinland’s thirds two Some Housing mortgagesandinterest rates

Housing mortgages, EUR million 100,000 20,000 40,000 60,000 80,000 0 Housing mortgages toFinnishhouseholds ■ Housingmortgages 1-1995 7-1995 1-1996 7-1996 1-1997 7-1997 1-1998 7-1998 1-1999 7-1999 1-2000 7-2000 1-2001 7-2001 1-2002 7-2002 1-2003 7-2003

1-2004 Euribor 12months 7-2004 housing loans stood at 2.30 %. at 2.30 stood loans housing new for rate interest 2013, In billion. average €88 the some at stands it currently and years, recent in rapidly increased has loans housing ofoutstanding amount total The area. metropolitan Helsinki the in €120,000 some and country, whole the in is€92,000 loan ofahousing size average The hand. other the on housing, occupied owner- in rates low mortgage relatively the and hand, one on population, income lower among housing of rental emphasis the illustrates at 27 This %. greater, is significantly dwellings rented in living households for share The income. 18 some %oftotal to amounts household ofaFinnish cost 1-2005 total estimate229EURbn Ownership oftheFinnishhousingstock, 7-2005 190; 84% Some 34 % of all dwellings are financed with mortgages. mortgages. with financed are dwellings %ofall 34 Some housing net average the Finland, Statistics to According

1-2006 12; 5% 7-2006 1-2007 17; 7% 7-2007 1-2008 7-2008

1-2009 10; 4% 7-2009 1-2010 7-2010 1-2011 Source: KTI,Kansanvarallisuustutkimus,ROTI 7-2011 1-2012 Source: BankofFinland 7-2012 1-2013 7-2013 1-2014 ■ municipalities ■ smallinvestors ■ professional ■ homeowners % 0 1 2 3 4 5 6 7 8 investors has remained low. Foreign players’ market entry has been been has entry market players’ low. Foreign remained has investors. most attracted Ålandsbanken by managed fund the ofthese, and, launched, were investors at private targeted funds residential 2013, In first the institutions. at domestic targeted by managed Funds investment. property residential in specialised database. 16 total some %ofthe represent properties residential Index, KTI the In investment. residential to exposure indirect asignificant have also thus and Avara, and ofVVO, Sato shares of the owners significant also are Elo and Ilmarinen Varma, as such funds pension Large portfolios. their in dwellings ofrental thousands several have all instance, for LocalTapiola, and Keva Ilmarinen, Varma, and market, investment institutional the in sector recognised a are properties Residential market. this in players significant also are funds pension Many companies. investment property ofplayers. professionalism the and levels rental practices, market in differences great in results and markets rental the affects ownership scattered The dwellings. 170,000 ofsome consists currently market investment residential professional so-called The individuals. mainly investors, small by is owned market residential rental citizens. senior and students as such groups at special istargeted stock housing subsidised the %of 25 Some Avara. and VVO, Sato include segment this in players significant most The companies. non-profit private, by is owned stock subsidised of the rest The apartments. 43,000 around with segment this in player biggest isthe of Helsinki, city the by owned Oy, Heka acompany municipalities. Finnish the by isowned stock housing subsidised ofthe majority The Players for instance ICECAPITAL, and LocalTapiola Real Estate are are Estate Real LocalTapiola and ICECAPITAL, instance for Foreign investor interest in the Finnish residential market market residential Finnish the in interest investor Foreign funds property non-listed some also are there Currently, residential specialised biggest the are Avara and VVO, Sato free non-subsidised %,ofthe 60 some majority, The Metropolitan Area, pieces Residential constructionactivityinHelsinki pieces 1 000 1 500 2 000 2 500 3 000 3 500 500 0

2004/1 2004/2 2004/3 2004/4 ––

2005/1 –– permits 2005/2 2005/3 2005/4 2006/1 2006/2

2006/3 –– starts 2006/4 2007/1 2007/2 2007/3 2007/4 2008/1 completions 2008/2 2008/3 2008/4 instance, and the state’s interest subsidy is not significant in in significant is not subsidy interest state’s the and instance, for periods, of restriction of length terms in restrictive very are terms as conditions, current in players other interest not does housing Subsidised groups. special for housing providing organisations and municipalities by mainly produced currently construction. residential in isexpected 2014, For decrease aslight housing. subsidised were 2013, in dwellings 7,000 some starts all Of year. previous the to compared units of 1,800 a decrease 2013, in represents which started was dwellings 27,000 some of construction the Industries, Construction Finnish of the construction. rental residential for cost construction arising as results This housing. owner-occupied of production the on resources their concentrate to tend they markets, rising the in and, markets, residential the in developers major are companies construction Finnish conditions. market on dependent is highly housing rental and owner-occupied particular. in region Helsinki the in housing priced moderately for need the increases migration Internal cities. major other and region Helsinki the in needed be would production new total % ofthe 30 than More years. 20 next the within dwellings 500,000 to close total in year, and, per dwellings 24,000–29,000 around be to isestimated dwellings new for need long-term the ofFinland, Centre Research Technical the VTT, to According Housing construction 2009/1 Patrizia. fund German the well as as A/S, Project KE company development property ofDanish asubsidiary WH-Asunnot, include market residential Finnish the in investors foreign The portfolios. residential to related issues management some by as well as investments, residential for low yields the by slowed both 2009/2 2009/3 2009/4 is cost-based, are rents where housing, Subsidised ofRT, Confederation the estimations the to According between construction housing new on emphasis The 2010/1 2010/2 2010/3 2010/4 2011/1 2011/2 2011/3 2011/4

Source: StatisticsFinland 2012/1 2012/2 2012/3 2012/4 2013/1 2013/2 2013/3

The Finnish Property Market 2014 51 The Finnish Property Market 2014 52 the subsidy system. develop to order in ministry the with discussing currently are participants Market environment. financial current the restrictions are related to the holding period of the buildings. buildings. ofthe period holding the to related are restrictions only the dwellings, these In levels. rental or selection tenant for restrictions no are there sector, construction the in employment and supply housing both stimulate to was which of aim the 2009–2010, in subsidy interest specific the with market-oriented typically are rents but selection, tenant for conditions varying be might there subsidy, interest with produced dwellings some In cost-based. are rents used, are subsidies or loans housing state where stock, ARA-housing so-called In selection. tenant and levels rental both to related restrictions be might –there of subsidy buildings. and areas different in conditions market prevailing to increases rental adjust to landlord the allows of indexation kind This cent. 5 per of 3 or minimum a instance for increases, ofrental level ahigher on agree to common it isalso conditions, current In used. most the being period. rental of the length the on depends also period the but months, three isminimum period notice the landlord, the For conditions. specific certain under contract the terminate only can landlord The month. one typically period, notice agreed further notice. until continues agreement the a year, afterwards as and such period, fixed a on certain agree to possible It is also period. 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 In the subsidised housing stock – depending on the form form the on –depending stock housing subsidised the In index of living cost the with indexed, typically are Rents an after contract the terminate to right the has tenant The indefinite an for made typically are agreements Rental Area (index1983=100) Prices ofdwellings,HelsinkiMetropolitan 100 200 300 400 500

1990 produced dwellings . In 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 In the model, earned income, inflation and interest rates rates interest and inflation income, earned model, the In 2014 2%for 2015. ofsome and increase annual an estimates rents residential for model forecasting KTI The areas. many in increases rental for ability tenants’ the limit earnings, in increase non-existing or moderate economy, well as as overall the in uncertainty continuing the cities, major in strong remains apartments rental for demand the While uncertain. average. % on 3.6 by more, slightly rising continued have rents cities, major other In %. of3.3 increase annual an showing index rental KTI the area, metropolitan Helsinki in extent some to down average. on annum per % 2.5-3.5 to slower, amounting somewhat been has increase the cities, major other In average. 4%on some by annually increased have area metropolitan Helsinki in rents nominal decade, past the During cities. major the in apartments small 3%). 2and (between cities %) main (some 4.0 other in and Helsinki in strongest be to is estimated increase The average. 2014 %in 2.5 on some by increase will prices housing PTT, areas. all in slightly decreased prices year ofthe end the towards year, ofthe whereas half first the during increased prices year, Within the %. 2.3 was increase the area, metropolitan Helsinki the In average. on country whole the 2013 across %in 0.7 by increased dwellings old residential for prices Finland, ofStatistics statistics preliminary the to According market 2014 in residential The 2004 applied. are prices rental and income tenant’s the both to related criteria 2005 The outlook for rental development looks slightly more more slightly looks development rental for outlook The slowed has year, increase the past the However, during for especially strong, remains housing rental for Demand Research Economic ofPellervo forecasts the to According In cases where the tenant receives a housing subsidy, set set subsidy, ahousing receives tenant the where cases In 2006 2007 2008

Source: StatisticsFinland 2009 2010 2011 2011 2012 2013 investing in residential funds or companies. companies. or funds residential in investing by and directly both allocations residential their increased have funds pension many and years, recent in investors owner-occupiers. for –apartments larger –typically remaining the sell to aiming is developer the where buildings in apartments individual acquiring by even dwellings, developed newly in invested have funds 2009-2011.in 2013,launched In newly some apartments rental new develop to players new some attracted subsidy stimulus state’s The dwellings. ofrental quality the of improvement gradual isthe years recent in markets rental markets. rental the in development strongest the showing still Helsinki in areas best the with submarkets, between differences significant are However, there rents. for variables explanatory best the be to out proven have index 2000=100 inflation,Helsinki Metropolitan Area, Residential rents, operationalcostsand 100 110 120 130 140 150 160 170 90 The residential sector has attracted institutional institutional attracted has sector residential The residential the affected has that phenomenon Another KTI Residentialrent index,Helsinki metropolitan area andothermajor cities

2000 Rent index

2001

2002

2003 Operational costindex 10 12 % -4 -2 2004 0 2 4 6 8 spring 2001

2005 area Helsinki metropolitan autumn 2001 2006 spring 2002 autumn 2002

Source: KTIandStatistics Finland 2007 spring 2003 autumn 2003 2008 spring 2004 Inflation autumn 2004 2009 spring 2005 autumn 2005 2010 spring 2006 autumn 2006

2011 spring 2007 Other majorcities

autumn 2007 2012 spirng 2008 autumn 2008 spring 2009 autumn 2009 spring 2010

since the introduction of KTI Index in 1998. 1998. in Index ofKTI introduction the since year every in territory positive the in been has properties ofresidential growth Capital 9.0 %,respectively. 9.3 and of returns total with periods, investment 10 years’ 5 and both in clearly sectors property commercial all outperforms Residential of5.4 %. income net %,and of2.6 growth capital ofa %,consisting 8.2 to amounted properties residential on 2013, In return total years. several for sector performing year. the during transactions several in developers instance, newly developed acquired residential dwellings from for ICECAPITAL, and Ålandsbanken by managed Funds quarter. SATO to fourth the in portfolio residential million ofa€41.5 sale Varma’s the was transactions biggest ofthe One 2012). in million (€240 transactions 24 %of all representing million, €570 some to 2013,in amounting markedly increased autumn 2010 investments, 2000-2013 Total return onresidential property 10 12 14

% spring 2011 0 2 4 6 8

In the KTI Index, residential has been the best best the been has residential Index, KTI the In transactions property ofresidential volume The autumn 2011 spring 2012

2000 Total return autumn 2012 2001 spring 2013 autumn 2013 2002 spring 2014 autumn 2014 2003 spring 2015 Capital growth autumn 2015 2004 Market rents, newagreements Market rents, Annual changeandforecast 2005

2006

2007 Income return

2008

2009 Source: KTI

2010

2011 Source: KTI 2012

2013

The Finnish Property Market 2014 53 The Finnish Property Market 2014 54 authorities, which also means that the operators need to to need operators the that means also which authorities, from alicence for apply to have operators the sectors, service most In municipalities. the to services their provide typically who operators, private to rented are investors private by owned properties care ofhealth majority The practices Market 2014.February in Hemsö Swedish the to sold was portfolio fund’s year. The the during actively portfolio its increased also which fund, I Care Trevian launched Management 2013, Asset Trevian 2013. In during capital investors’ alot ofprivate attracted fund This Bank. eQ by managed and Hoivakiinteistöt eQ as known currently fund investment special its launched Management Fund 2012, In Finnreit Management. Asset BPT by managed iscurrently fund The investors. institutional at 2007, in is targeted and founded was I, Healthcare EPI sector, this in fund first The ofproperties. kinds different of selection a in wider invest that funds specialised some currently are there addition, In people. elderly for facilities living at assisted mainly targeted been typically sector. this in investors property and providers service both for opportunities new up opened has This strategies. traditional their for solutions alternative for search to them force finances weak municipalities’ cases, many In sectors. these in provision service the in change structural the with well as as population, ofthe ageing the with together is increasing properties sector social other and healthcare for demand The Players 11.6 some to sqm. million amounts facilities healthcare the facilities. operate and services social provide also which organisations, sector public other and municipalities by owned been traditionally have facilities ofthese most context, Finnish the In properties. hospital even and facilities medical well as as facilities care day patients), children’s mental and patients dementia people, (eg. elderly groups target different for homes nursing and facilities living ofassisted consisting segment market adiversified are properties Healthcare Stock properties 4.5 Healthcare Pension funds’ investments in healthcare sector have have sector healthcare in investments funds’ Pension of stock total the Finland, Statistics to According attractiveness in 2013” in attractiveness “Healthcare property property “Healthcare sector increased its in rather small assets. assets. small rather in invests typically fund The million. €60 some to amounting volume year, atotal the with throughout investments several made fund property Healthcare eQ fund. the in investors main the also were who Etera, and Varma funds pension from portfolio million a€100 acquired fund The volume. total ofthe half about for accounted transactions 2013. in million fund’s Trevian’s €200 almost to amounted 2013. in market investment the in attractiveness their increased properties healthcare sectors, property other most in uncertainty continuing the well as as sector, property healthcare the for outlook positive the both to Due Market 2014 in by net driven income.strongly are investments sense, this In refurbishments. for even cases, many in and, insurances, and tax property maintenance, the for isresponsible tenant the where leases, net commonly most are agreements Lease 10-15 years. instance for operator. aprivate to further premises the leases or itself services the provides either which municipality, investors. and developers property the for demands certain set also requirements These property. the of use specific the on depending vary which requirements, technical strict fulfil and authorities the by approved be to need facilities the Even companies. solid financially be The volume of healthcare property transactions transactions property ofhealthcare volume The long, typically are properties care ofhealth Leases a to rented directly be can properties cases, some In

Photo: NCC / Sini Pennanen

Photo: NCC / Mikael Linden property funds and foreign players. Of the total stock of stock total the Of players. foreign and funds property institutions, domestic including investors new is attracting sector emerging This years. recent in slightly changed has situation this well, as but market logistics the in common investors. of examples as municipalities and investors, individual companies, insurance and pension companies, property occupiers, with diverse, ismore structure ownership the market, property manufacturing light the In properties. manufacturing large in common isvery Owner-occupation Players space. logistics efficient modern towards demand space the reshaping and increasing are systems logistics and chains supply of reorganisations well as as sales, ofretail restructuring trade, foreign well. Increasing as markets investment the in sector ofthis emergence an in recently, resulting quite emerged has players other from demand and market, the dominated have players major These systems. logistics and warehousing in-house centralised pursued traditionally connections. traffic new and demand space in changes ofboth aresult as years recent in rapidly developed has particular, in properties, oflogistics stock the these, Of sector. this in categories sub- main the are properties logistics and warehousing modern and properties, manufacturing light properties, manufacturing corporations’ industrial Large basis. customer and investor a heterogeneous well as as practices, and structures market varying with sub-categories various cities. major the outside located typically are particular in properties 15 Industrial %. some for accounts area metropolitan Helsinki the this, Of metres. square million 67 some to amounts stock property logistics and Industrial Stock market 4.6 /logistics Industrial Owner-occupation was, up until very recently, relatively recently, relatively very until up was, Owner-occupation have chains retail major the context, Finnish the In into divided be can market property industrial The rating. rating. tenant’s the by determined partly are levels rental of leases, kinds these In years. fifteen or ten istypically period the contracts, fixed-term In buildings. multi-tenant in premises smaller for used only are leases gross Finnish Traditional rents. triple-net or net typically are Rents markets. logistics and industrial the in vary practices rental needs, user and stock available the ofboth heterogeneity ofthe Because practices Market Estate Fund, for example also invests in logistics properties. properties. logistics in invests also example for Fund, Estate Pohjola’s Real funds, domestic Of portfolios. institutional in also represented typically are properties industrial and Logistics facilities. self-storage ofPelican achain including assets, warehousing and oflogistics types different in invest also NREP by managed Funds sector. this in sqm 370,000 some owns currently 2013. in company The acquisitions its it continued and properties, /manufacturing logistics Group. Indoor company furniture for centre logistics major a instance, for it owns, where Lahti, in holdings significant It has sector. logistics the in operations its is increasing termination. their until funds existing the managing continue will but business, management fund its up give it will that announced also company the strategy, new the In investors. as institutions domestic have that funds non-listed three through market this in acts also Sponda of 2013. end year %at the 25 some to amounting rate, vacancy high from suffers portfolio logistics Sponda’s areas. airport and harbour Vuosaari the in player, instance, for isastrong company The area. Helsinki the in mainly located properties warehousing and oflogistics portfolio million a€426 has currently company The portfolio. logistics its divest it will that it announced strategy, new its publishing However, 2013, late in market. when logistics the in Estate. Real Itella well as as Kesko, and SGroup instance, for include, owner-occupiers Big owner-occupied. be to 85 % is estimated about properties, warehouse and industrial Of the foreign investors, AB Sagax has invested in the the in invested has Sagax AB investors, foreign the Of Renor company investment and development Property investor and developer domestic isasignificant Sponda

The Finnish Property Market 2014 55 The Finnish Property Market 2014 56

Photo: NCC / Mikael Linden 190,000 sqm. In total, the group will have some 260,000 260,000 some have will group the total, In sqm. 190,000 almost to amount will project whole the and sqm, 77,000 comprises phase first The Sipoo. Bastukärr, in project logistics Freeway ofits phase first the construct to started S Group Estate. Real Itella by Lahti near completed was centre logistics sqm 2013, In active. a65,000 be to continues Renor, instance. for and fund logistics Sponda’s by out carried were transaction 2014. Other early 2013 in and acquisitions several with portfolio its expand 2013 in million (€140 to 2012). in continued million Sagax low, rather €190 at some remained volume transactions costs. construction high by explained partly are rents High sqm. €12 at some per stand area metropolitan Helsinki in areas logistics best the for levels rental quartile upper the database, KTI the In high. relatively are premises logistics modern for levels rental comparison, international In development. the leading premises modern with years recent in slightly of 2013. end the in area metropolitan at 6.1 Helsinki the %in stood properties warehousing and manufacturing for rate vacancy the Property, Catella to 2013. According during increase to started they low, relatively although remained have properties logistics and industrial modern for rates Vacancy market 2014 in industrial/logistics The New development of logistics and warehouse properties properties warehouse and oflogistics development New total in properties industrial and oflogistics share The increased have or stable fairly remained have Rents -4.1 %, and income return remained stable at 8.1 %. stable remained return income %,and -4.1 was %(5.2 of3.7 2012). %in growth Capital return total mid-2014. in completion to due Mäntsälä, in centre data sqm is Yandex’s 36,000 sector this in project major Another area. the in ofpremises sqm investments, 2000-2013 Total return onindustrialproperty 10 12 14 % -6 -4 -2 0 2 4 6 8 In 2013, the industrial / warehouse sector produced a produced sector / warehouse 2013,In industrial the

2000 Total return

2001

2002

2003 Capital growth 2004

2005

2006

2007 Income return

2008

2009

2010 Source: KTIIndex 2011

2012

2013 with 27 hotels each, as well as Best Western with 17 with hotels. Western Best well as as 27each, hotels with Hotels Scandic and Hotels Finlandia include operators hotel major Other chains. its in hotels 49 has currently instance, for Inn, Holiday and Rantasipi Cumulus, brands the under hotels operates who Restel, country. the across hotels 54 properties. hotel some own also particular, in SGroup operators, Some portfolios. their in properties hotel some hold also institutions biggest of the Most centre. of14conference one and hotels aportfolio with – Pandox Swedish ofthe –part Hotels Norgani and Finland, in properties hotel 39 owns which fund, hotel CapMan’s are Finland in owners property hotel biggest two The Players %. 52.6 at stood rooms of hotel rate 2012, In occupancy the rooms. 50,000 some comprising 635 Finland, in hotels are there MaRa, Association Hospitality Finnish the to According Stock 4.7 Hotels S Group is the biggest hotel operator in Finland, with with Finland, in operator hotel biggest is the S Group total return of6.1 2013 %in (5.7 2012). %in return total tourists. Russian of number the in increase an by compensated was general in guests foreign and domestic ofboth amount the in decrease year. The previous the to compared unchanged almost remained ofhotels rate of2013. occupancy The quarters three first the 2%during some by decreased hotels Finnish of the sales total statistics, preliminary the to According market 2013 in Hotels landlord and tenant might be allocated differently. allocated be might tenant and landlord the between responsibilities use, retail in example, for space, ofother amount isasignificant there where centres city in properties some In costs. operational and maintenance all for isresponsible operator The agreements. net long, triple According to the KTI Index, hotel properties delivered a delivered properties hotel Index, KTI the to According Rental agreements in hotel properties are typically typically are properties hotel in agreements Rental

Photo: SRV

The Finnish Property Market 2014 57 The Finnish Property Market 2014 58

Photo: SRV retail, which are driven by consumer markets. markets. consumer by driven are which retail, or residential as such sectors select certain on concentrate typically but cities, smaller in invest players domestic major Some owner-occupiers. and investors local by dominated strategies. investment their in markets target as centres” “growth these and area Helsinki the define investors large Many areas. market these in only operate that players local some are there cities, these In mid-2000s. the since capital international some attracted also have but institutions, domestic among popular traditionally are – Jyväskylä and ofTampere, Turku, Oulu centres growth region. capital the in invest only ofwhom many investors, foreign among iswell-recognised area metropolitan Helsinki The area. metropolitan Helsinki the in made were 2013, transactions in %ofall 69 market: some transactions the in seen be also can dominance Its area. metropolitan Helsinki the in %islocated 64 some Index, KTI the in included properties the all Of area. metropolitan Helsinki the in concentrated isalso market investment property institutional The %. 60 exceeds share its value, by Measured area. metropolitan Helsinki the in islocated Finland in stock office total %ofthe 45 Some market. property Finnish the in region dominant Vantaa, is the and Kauniainen ofEspoo, cities neighbouring immediate the and Helsinki of City ofthe consisting area, metropolitan Helsinki The 2014 for different regions –outlook markets5 Property in Property markets in smaller city regions are traditionally traditionally are regions city smaller in markets Property regional the –typically markets second-tier The number is some 2 % lower than before the financial crisis. crisis. financial the before than 2%lower issome number the country, whole the in whereas 2008, as level same the to returned now has region Helsinki in ofjobs number The decrease. to continued sales retail well as as production ofindustrial amount the hand, other the On of population. increase continuing the by isenhanced services local for Demand services. consumer and business both for demand increased the on based was growth The continued. decrease the country entire the in whereas, increased, slightly of jobs 2013, In awhole. as number the country the than economy the in fluctuations cyclical to sensitive ismore region Helsinki the development, international to exposure greater the to as (23 %). country (16 islower %) occupations entire the in than of industrial proportion The region. Helsinki the in role astronger have businesses logistics and trade wholesale industries, tech high- well as as services, professional Specialist country. entire the 33 to %across compared sectors, service private the in are region the in 43 jobs %ofthe Some region. Helsinki the in higher issignificantly sector service private the in ofjobs proportion the country, ofthe rest the to Compared awhole. as country of the that from significantly differs region Helsinki ofthe structure economic The base: Economic Population: cities. these in concentrated are region Helsinki ofthe population ofthe majority the and activities, administration Jobs, area. metropolitan Helsinki the in located are agencies, government well as as headquarters, company major of 1.1 Most people. million apopulation has Kauniainen, and Vantaa Espoo, of Helsinki, GDP. Finnish the 35 %of some delivers and jobs %of all 30 some for accounts population), Finnish ofthe (one-quarter 1.4 people million accommodates of14 municipalities, consists region Helsinki entire The perspective. market property the from significant isalso importance its that means which Finland, in position adominant has region Helsinki the respects, many In area 5.1 metropolitan Helsinki The Due to the emphasis on private sector businesses, as well as businesses, sector private on emphasis the to Due cities ofthe consisting area, metropolitan Helsinki The services sector public logistics, industries, information services, financial and Professional region: Helsinki Vantaa: Espoo: Helsinki: 1,393,000 261,000 207,000 613,000 behind this legislation is to control sub-optimisation caused caused sub-optimisation control isto legislation this behind idea main The policies. immigration and force labour well as policy, as trade and competitiveness transportation, housing, land-use, concerning issues include would governance of this tasks The governance. metropolitan specific for legislation for aproposal prepare to founded was committee a working 2013, policy. September In reform structural government’s current the in position aunique holds area metropolitan The structure oftheeconomy,percentage ofjobs,2012 As the most dominant city region, the Helsinki Helsinki the region, city dominant most the As governance in matters concerning land- concerning 15,7 % use, housing and possibilities for for possibilities transportation” is investigating investigating is “A committee metropolitan metropolitan 15,6 % HELSINKI REGION 24,9 % Office rent indexandinflation 100 120 140 160 180 200 0,4 % 80

03-1995 Rent index(Helsinki,CBD1993=100) 03-1996

03-1997 43,4 % 03-1998 03-1999

03-2000 andforestry ■ Agriculture ■ Retail ■ Manufacturing ■ Publicservices ■ Privateservices 03-2001 03-2002 03-2003 03-2004 of the total stock in the whole country. whole the in stock total of the 13 some % representing sqm, million 3.7 about to amounts stock space Retail stock. total 10 area’s %ofthe about Vantaa %and 20 about accommodates Espoo Helsinki. in islocated two-thirds than more area, metropolitan Helsinki CBD. Helsinki the in well as as areas, Matinkylä and Aviapolis Leppävaara, Itäkeskus, in located are centres shopping Main Vantaa. in Tikkurila and Espoo ofTapiola in centres regional include areas retail Important Vantaa. in area airport the and Espoo in areas Leppävaara and Keilaniemi Helsinki, in Ruoholahti include areas office prime other CBD, the Outside location. market retail prime a as and location office an as both position undisputable an (CBD) has district business central Helsinki the markets, 2014. September in ends committee of the term The competitiveness. international its enhance to well as as region, the in development sustainable environmentally and socially, economically ensure is to legislation ofthe objective The region. whole the concern eventually that matters in decision-making municipal by Source: KTIandStatistics Finland 03-2005 22,6 %

03-2006 the in of offices stock total sqm million 8.5 around Of property area metropolitan Helsinki Within the 12,2 % 03-2007 Inflation (1995=100) 03-2008 WHOLE COUNTRY 03-2009 03-2010 03-2011 4,4 % 03-2012 28,3 % 03-2013 Source: HelsinkiChamberofCommerce 32,5 %

The Finnish Property Market 2014 59 The Finnish Property Market 2014 60 Main office areas in the Helsinki metropolitan area metropolitan Helsinki the in areas office Main Commercial property stock,31.12.2012 Jyväskylä Tampere Helsinki Vantaa Kuopio Espoo Turku Lahti Oulu

0

500 000 Office ■Industrialandwarehouse ■ RetailOffice

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

4 500 000 Source: StatisticsFinland

5 000 000

5 500 000

6 000 000 sqm well as the Kampin Huippu project. project. Huippu Kampin the well as as centres, shopping Forum and ofCitycenter extensions and refurbishments the through completed be also will or have premises office New centre. city ofthe attractiveness of the proof isanother offices ofthese leasing successful The firms. service ofprofessional kinds different to rented mostly be will or have premises former Their CBD. Helsinki the in oftenants turnover amajor started companies of these relocation year. this The later follow will EY and area, the to moved already have KPMG and UPM Media, of Alma offices head of2014. half The second the in completed when sqm 40,000 of some area floor office an accommodate will which ofTöölönlahti area, development the through CBD, Helsinki the in expanding iscurrently supply office The conditions. market fluctuating in stable and sustainable more be to out proven also has CBD Helsinki ofthe position the submarkets, office other all to Compared region. the in location office preferred most the remains and attractiveness its maintained has CBD Helsinki the area, Helsinki the in areas other in of occupiers. needs the well to responds and refurbished, and well maintained ismostly yet 1900s early and 1800s late the in built was CBD the in stock office ofthe majority The offices. ministries’ and headquarters company some with –together etc banks, investment law firms, consultancies, –business services business-to-business offering centre. the in locations shopping important most the around area pedestrian extensive an owners, property the with together 2015. in developing, It is also construction the of starting aim the with Töölönlahti the in area underway is library central new ofthe planning The place. market and square Senate the between area Torikortteli the instance, actively, for developing iscurrently city The leisure. and living business, for environment attractive an as CBD of the competitiveness the maintain and enhance to wants which ofHelsinki, City the by identified areas development key ofthe one is also centre city The buildings. cultural several and functions administrative sector public important most the accommodates It also Finland. in trade ofretail centre undisputed the well as as location office attractive most isthe area small geographically This Finland. in submarket property single important most isthe CBD Helsinki The District Business Central Helsinki Helsinki 5.1.1 Despite the increase of supply of modern office stock stock office ofmodern ofsupply increase the Despite companies mostly are centre city the in users Office continues attracting attracting continues “Helsinki CBD tenants” in 2013.in newcomers of the examples as King Burger and Starbucks with brands, retail international attracting continued also has CBD The higher. significantly be can rent the locations, best very €110 the in atnow and some month, per sqm per stands rents ofretail quartile upper the database, rental KTI the In premises. high-street in and centres shopping in both found be now 2013. in slightly can Vacant space it increased December. in Estate Real Allianz by centre shopping Kamppi %ofthe of50 acquisition the 2013 in news was biggest the market, transactions property retail 2015. in CBD’s the In completed be will of Forum 2013 that spring and in completed was of Citycenter project extension and redevelopment major The station. railway main the to next Citycenter and area, Kluuvi the in Kluuvi and Esplanad Galleria area, Kamppi the in Forum zero. to close to decreased offices of central 2013, In growth however, years. capital the recent in offices CBD Helsinki in values market in increase the maintained have yields decreasing and growth rental Healthy million. €74 for Investment Union by purchased was which area, Töölönlahti the in office head completed recently of UPM’s acquisition the was transaction 2013,In significant most the years. recent in out carried been have transactions many not at ofsupply, 5.4 2013. late %in lack to stable However, due remained CBD Helsinki the for yields office prime survey, future. near the in stable remain to expected are levels rental and positive, less slightly turned now has development rental for outlook the conditions, economic uncertain and supply increased the to Due database. rental KTI the to according sqm, per €26 at some stable remained has rent market median the and month, per sqm per €30 well above of3.1 level Top %. remained year’s rents previous the from slightly slowed down 2013. %in increase of2.4 The increase an showed offices CBD Helsinki for index rental KTI’s Catella Property. Catella to according area, Helsinki whole 12.4 %the to in compared -at 5.3 % moderate remained has centre Helsinki in offices The amount of vacant retail space remains low, although low, remains although space retail ofvacant amount The and Kamppi include CBD the in centres shopping Main Barometer Property RAKLI-KTI the to According Despite the active new development, the vacancy rate of rate vacancy the development, new active the Despite down in Helsinki CBD” “Rental growth slowing growth “Rental

The Finnish Property Market 2014 61 The Finnish Property Market 2014 62 – Kalasatama –Ruskeasuo –Vallila –Sörnäinen Pasila area. the for plans ofthe confirmation the on dependent is development The developed. be would properties hotel and commercial residential, where area, land Telakkaranta sqm 8,200 ofthe development the negotiating currently are Skanska and ofHelsinki City The area. the in active iscurrently development Residential Vuosaari. to operations its moved harbour the after use alternative for freed was project. development office sqm 7,000 2013 in Sponda’s area was the in project development completed only The Etera. from property office sqm 8600 an acquired Life Fennia where institutions, domestic two between made was transaction office significant only the 2013, In balance. better in be will space ofoffice demand and supply the before started be to likely not are projects new although area, Salmisaari the in potential development new is also There funds. international some well as as companies property institutions, domestic include area the in Investors Property. Catella to according at of2013, 15.6 end %at the stood and decrease, to started has rate vacancy the ofmonths, couple past the During improve. conditions economic as soon as ease to expect they which vacancy, temporary suffer to preferring significantly, levels rental the decrease to willing been not have area the in supply, investors abundant the Despite centre. research Nokia major ofthe closing the instance, to, for due area, the in markedly increased has space ofvacant amount the ofyears, couple past the During month. per sqm €22-23 per at some standing currently rents average with CBD, the in business consultancies, banks and companies. insurance companies, industrial and high-tech as such of businesses, avariety accommodate area Salmisaari adjacent the and Ruoholahti route. radial western ofamajor point starting at the CBD the near area office isamodern Ruoholahti –Salmisaari Ruoholahti rates between the new and old property stock in these areas. areas. these in stock old property and new the between rates occupancy and levels rental in differences significant are supply. There office amultifaceted by characterised are areas Vallila. These and Sörnäinen Pasila, include centre city the Next to Ruoholahti is the growing Jätkäsaari area, which which area, Jätkäsaari growing isthe Ruoholahti to Next 10-15 than %lower about are Ruoholahti in rents Office Pasila is an important railway hub and multifaceted multifaceted and hub railway important is an Pasila of out somewhat situated areas office traditional Other “Ruoholahti are offices suffering from cyclical from suffering vacancy” new development project for its head office in Vallila. When Vallila. in When office head its for project development new and extension refurbishment, a major out carrying currently is Pohjola OP Group companies. telecommunications and banks example, for accommodating, currently Pasila, to next 2015. late in completed be to isestimated construction The Sweco. group engineering consulting for let are premises ofthe majority The Ilmala. in sqm, 15,000 some totaling buildings office of three construction the start it will that 2013, late In announced however, years. Sponda recent 2014 late in made earliest. at be the will line of this construction the for Decisions Pasila. to back and Hakaniemi centre, Töölö, city via Helsinki atunnel in run and Pasila in start would railway loop-shaped The centre. city Helsinki the under trains commuter for line railway urban an be will which (Pisararata), project Loop Rail City called aso planning isalso 2015.City in The completed be will Road Rail Ring the when airport, the to connection train direct the through properties. office and residential both accommodate will areas These station. railway ofthe north areas Pasila Northern and Ilmala 2015. in started be to expected is construction The ahotel. and arena amulti-purpose as well as terminal transport apublic development, residential offices, high-quality centre, shopping sqm of a60,000 consists Tripla project, YIT’s proposal, winning the and area, ofthe development the for competition adesign organised Properties Senate state’s the and 2013, ofHelsinki City the In station. railway Pasila current ofthe surroundings the in area, Pasila Central the in started be will area of the Renovation respectively. 10,000, and of23,000 figures current to compared residents, 23,000 and jobs 60,000 some accommodate would area the plans, long-term City’s the In significantly. area the in stock property residential and commercial the both increase to plans city the and Helsinki, of City ofthe development future the in role abig has Pasila media companies. and service business and companies insurance agencies, city and government including users, of office mixture acolourful accommodates currently Pasila station. of the south area machinery old railroad the and areas Pasila Upper and Northern Ilmala, developing the Pasila, Western and ofEastern submarkets traditional including areas, of several consists Pasila centre. city ofthe north area market property Vallila is a traditional office and light industrial area area industrial light and office Vallila is a traditional in quiet been has area Pasila the in development New further enhanced be will Pasila to connections traffic The the instance, develop, for to plans major also are There “Major development development “Major plans in Pasila” in plans accommodate a relatively modern office stock. stock. office modern arelatively accommodate station railway Käpylä of the surroundings The Käpylä. up. picks demand as soon as phases new with extended be to planned are 2013.Both concepts spring in completed was Park Business Aitio Development’s Property ofNCC phase 2013.The first in Investment Union to sold was of which one project, Rasti Manskun ofSkanska’s phases two first the accommodates currently area supply. The space modern mostly with €20. above at well premises modern €13-15 for and month, per sqm per at standing premises older for rents average with space, the of location micro and quality the on depending significantly vary levels Rental stopped. have to seems increase rate vacancy the although area, Pasila-Vallila-Sörnäinen the area. the in construction under iscurrently office head Sport’s Amer Also employees. 3,000 about accommodate will campus The development. isnew ofwhich sqm 60,000 about space, office of sqm 132,000 comprise will 2015, in project completed the dependent on financing. financing. on dependent 2017, in is still completed be to start the but is estimated centre The transportation. private and public through areas residential eastern and centre city the both to well connected and towers, residential to adjacent be will centre The space. ofretail sqm of 58,000 consisting project, centre leisure and shopping Redi amajor SRV plans area, ofthe centre the In area. the in projects office planning are developers Several people. 20,000 some accommodate to is planned area the 2030, in completed when 2,000; around iscurrently residents of number The projects. residential on is concentrated area the in work construction moment, the At 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 isanother This Vuosaari. to operations its moved harbour the when released was land the where Kalasatama, is Sörnäinen to Adjacent buildings. office of refurbished plenty accommodates also currently which area, harbour and industrial atraditional Vallila to isSörnäinen, Next North of eastern Pasila is the traditional residential area area residential traditional isthe Pasila ofeastern North area office Ruskeasuo developing is the Pasila to Next in high remains space office ofvacant supply The developing close area to “Kalasatama is a the city centre” city the Europe with a gross leasable area of 115,000 square metres. metres. of115,000 square area leasable a gross with Europe northern in centres shopping largest ofthe isone mall shopping Itis The living. and retail for area attractive an as development its line, supports metro eastern the by well as as route, radial eastern the Iand Road ofRing junction the Herttoniemi. in active remains development Residential sqm. 23,000 some to amounts only space vacant of amount absolute the although area, the characterised recently have rates vacancy office supply. High retail and office with area diversified amore into transformed gradually has that area old warehousing isan Herttoniemi line. metro the and route radial eastern the both to adjacent years. recent in area the in active been has construction Residential buildings. industrial old within developed been have ofwhich both Arabiakeskus, centre retail and office the and Arabia, centre shopping the accommodates also area The of students. thousands and jobs 8,000 residents, 10,000 about accommodates currently area The recently. rapidly developing been also has which area, isArabianranta area city central ofthe East Eastern Helsinki use. educational for developed be to property another bought centre education adult vocational Amiedu and €12 only to million, amounting aprice with Park Business Moveres sqm 10,000 the acquired SaKaHallikiinteistöt deals. both in seller as Pramerica TMW with area, the in recorded were transactions 2013, In office development. two residential in only concentrated years, recent in has, area the in 75 2013. late %in some construction at only New stood rate occupancy portfolios, investors’ major in and area, the in holdings significant have institutions Many Property. Catella to %,according at 16.5 standing rate vacancy the with area, the in high remains space of vacant amount the 2012-13, in rate vacancy the in decrease asignificant Despite 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 particular, in buildings older In Pitäjänmäki. in buildings and areas different the between markedly vary levels supply, rental space heterogeneous ofthe Because vacancies. and rents in volatility caused has which demand, fluctuating from suffered has that Helsinki in areas of the is one Pitäjänmäki parks. business modern some well as as properties type office head some and buildings office multi-tenant both comprising 1990–2000s, the in use office mainly into converted been had that area old industrial is an centre, city Helsinki of the north kilometres seven situated Pitäjänmäki, Pitäjänmäki Further east is the Itäkeskus area. The area’s location at location area’s The area. Itäkeskus isthe east Further CBD, ofthe east kilometres five area isan Herttoniemi

The Finnish Property Market 2014 63 The Finnish Property Market 2014 64

Photo: Sato extension have not been made yet. yet. made been not have extension the for decisions final 2018, the by but stations five another by extended be to planned 2016. in It isalso operations start will metro the estimations, current to According stations. new ofthe vicinity the in markets property the boosting Niittykumpu-Olari. and Leppävaara Keilaniemi, Mankkaa, Kilo- instance, for including, Espoo, in areas various in found be can premises 2013. late in Vacant office leased were investors large by owned premises 75 office %ofthe than less database, rental KTI the In year-end. at the construction under was sqm 14,000 another only and Espoo, in completed was space office ofnew sqm 27,000 however, some only 2013, In active. remained has development office new rates, vacancy high Despite years. few past the for Espoo in areas properties. and areas different in rates vacancy and levels ofrental development divergent the in seen be also can which ismultifaceted, stock property commercial city’s The centres. regional five within scattered stock city, property has biggest second Finland’s Espoo, 5.1.2 Espoo areas. residential developing rapidly also are areas Rastila adjacent the and Vuosaari Columbus. centre shopping sqm 21,000 isthe station metro Vuosaari the to Next stock. property logistics extensive an well as as jobs 2,000 about accommodates currently 2008, in opened was which harbour, The years. recent in rapidly developing been 2014.late in completed be to isestimated project The developed. will space retail ofnew 11,000 sqm some which through project, refurbishment amajor isundergoing centre shopping The The construction of the new western metro line is line metro western new ofthe construction The many for a problem been have rates vacancy Office has that area isanother area, harbour new the Vuosaari, Asset Management for €77.5 million. million. €77.5 for Management Asset Aberdeen by managed a fund from Park Business Falcon the acquiring by area the in holdings its Technopolis extended 2013, late In companies. at high-tech targeted parks business well as as institutes research several accommodates also area The buildings. ofexisting redevelopment and construction new both include will project campus The 2013. in competition design architectural an organised it which for area, the in campus main its centralise to decided has University The islocated. University Aalto significantly. improve conditions market rental the before started be to expected not are these but area, the in planned being projects development office major several are There stable. remain to expected are levels 2014, rental and in improve to isexpected 2013.late However, situation the %in 73 at only stood offices Keilaniemi for rate occupancy the database, rental KTI’s In years. recent in buildings office modern in vacancies high relatively from suffered also has area the Ruoholahti, to Similarly Ruoholahti. in than lower slightly typically are levels Rental concepts. park business modern some well as as Fortum, and Oil Neste Kone, Nokia, including properties, office head major several accommodating area office isamodern Keilaniemi areas. the in active been has development new this, Despite premises. ofoffice oversupply serious from suffered years, have, recent in areas ofthese Some stations. metro new accommodate -will Matinkylä and Niittykumpu Tapiola, Otaniemi, -Keilaniemi, Espoo southern in submarkets property commercial established five The -Matinkylä Niittykumpu Keilaniemi – Otaniemi – Tapiola – In late 2013, the first phase of the shopping centre Ainoa was was Ainoa centre shopping ofthe phase 2013, late In first the stock. property new and existing in well as as infrastructure transportation both in investments major includes project The redevelopment. major undergoing is currently which area, residential and office retail, Tapiola isatraditional East of Keilaniemi is the Otaniemi area, where where area, Otaniemi isthe ofKeilaniemi East markets in southern is reshaping office office reshaping is undergoing major major undergoing “Tapiola centre is “New metro line metro “New redevelopment” Espoo” no projects are currently underway. underway. currently are projects no but concepts, of these several for planned being are phases New completed. were Park Business ofDerby phase second the and Park Business ofAlberga 2013, phase In newest the Park. Business Derby SRV’s and Quartetto Hartela’s Polaris, project joint Lemminkäinen’s and NCC’s Alberga, NCC’s including buildings, several with complexes park business by is characterised area supply. The residential modern some and mall shopping atraditional Sello, centre shopping stock, office expanding rapidly a diversified, comprising area, Leppävaara isthe railroad western the by Iand Road Ring Along Leppävaara shop. The construction is estimated to be completed in 2015. in completed be to is estimated construction The shop. outdoor and sports XXL to rented ismainly which property, retail sqm 8,200 an develop to started has Kiinteistöt Tallberg- Julius area. the in completed were Merituuli and Liila centres /retail ofshopping 2013, redevelopments the In properties. retail box big mainly accommodates currently area The is located. ofSuomenoja area manufacturing area. the in developed being is currently centre retail Suurpelto sqm A10,000 services. public for premises well as as offices ofresidential, construction the include area whole the for plans years 10–15 next the within but buildings, residential on isconcentrating construction phase, first the In developed. 2014. late in completed be will Garden Business 2013, in Eventes completed and was Safiiri Park ofBusiness phase second the IsoOmena, to Next apartments. of residential sqm 15,000 well as as space, retail of new sqm 25,000 some comprises redevelopment The station. metro Matinkylä the accommodate will and extended and redeveloped being iscurrently centre The Matinkylä. in islocated centre shopping IsoOmena area. office developing a well as as Espoo, in centres retail significant of the one also use. alternative some for redeveloped and demolished be will some and use, office modern for redeveloped been have buildings older Some redevelopment. amajor undergoing is also which stock, office a diversified accommodates also area The space. ofretail sqm 40,000 another well as as store department Stockmann for premises new the include to extended be to isplanned project The area. the in opened East of Matinkylä, the traditional retail and light light and retail traditional the ofMatinkylä, East being iscurrently area West ofTapiola, aSuurpelto line, is metro the along stations ofthe one Matinkylä, “Leppävaara offices offices “Leppävaara continue attracting attracting continue investors” accommodates about 1,100 companies and some 35,000 jobs. 35,000 some and 1,100 companies about accommodates it and area, the in 17,500 some inhabitants currently are There companies. property several and developers property major all Lentoasemakiinteistöt, LAK company daughter its and ofVantaa, Finavia City the include area the in players main The years. few past the during rapidly developed has Airport Helsinki-Vantaa the around area Aviapolis The Aviapolis properties. service and retail well as as projects residential abundant including areas, station the around opportunities development property 2015, in new up completion isopening for due Line, Rail Ring new of the development The centre. Tikkurila traditional the in well as as surroundings, its and airport the around concentrated are areas market property commercial important most Vantaa, the In 5.1.3 Vantaa hypermarkets. traditional in than premises smaller significantly to goods daily for space dedicate to possibilities the limits plan the that fact the despite centre the in shops grocery open to plan ofwhom both Kesko, and Elanto HOK by is led project centre shopping The sqm. 30,000 ofsome premises hotel and office retail, additional well as as centre, shopping sqm a 110,000 comprises plan The approved. was III, Road Ring and Turku motorway of the junction at the centre Espoo to area. the in planned being are projects hotel and residential new Additionally, terminal. bus new the to well as as other each to centres shopping two these connect to plans currently are There centre. Espoo in located route. railway western the alongside and Turku motorway the to close situated is buildings, retail various well as as city of the buildings administrational the accommodating area an centre, Espoo centre Espoo expected to be confirmed in 2014. in confirmed be to expected is plan The area. the in centre entertainment Birds Angry an planning isalso Rovio offices. head new their develop to planning are Entertainment Rovio company game and concept. of the phases two first the in invested earlier having C-building, Park’s Business Alberga acquired Investment 2014, early in Union instance, for investors; attract also buildings 2013. in Modern stopped space ofvacant amount the in increase the Property, Catella to According premises. modern in well, held have especially levels rental and tenants, attracting continued has Leppävaara conditions, economic challenging However, despite years. past the during In early 2014, the plan for the Lommila area, situated next next situated area, 2014, Lommila the for plan early In the are Entresse and Espoontori centres shopping The In the Perkkaa area adjacent to Leppävaara, Tieto Oyj Oyj Tieto Leppävaara, to adjacent area Perkkaa the In Leppävaara in increased has space ofvacant amount The

The Finnish Property Market 2014 65 The Finnish Property Market 2014 66 such as outlets for motor vehicles, furniture and gardening. gardening. and furniture vehicles, motor for outlets as such units retail big-box and park retail by favoured areas retail important also are Tammisto areas and Pakkala the Aviapolis, of vicinity the In hotel. the for planned isbeing extension Amajor premises. leisure and hotel, office comprising centre leisure Flamingo the isalso there neighbourhood immediate the In area. the in centre retail major is the Logistics. Itella and Schenker DB DHL, instance by, for accommodated and modern israther ofwhich most – premises logistics and ofwarehouse sqm 6,000,000 some with hub logistics important is an Aviapolis airport, the to related directly properties supply. Besides retail abundant and properties logistics premises, office modern includes area. station new the around properties commercial and residential developing for plans major has Lentoasemakiinteistöt connections. railway main and centre city the with area the linking thus Aviapolis, in well as as airport at the stations have will Line Rail Ring new The The 85,000 square metre Jumbo shopping centre centre shopping Jumbo metre square 85,000 The area Aviapolis the in stock property Commercial increasing in the airport development in Vantaa” in development “New Ring Rail Line Rail Ring “New “Office vacancy rate vacancy “Office is boosting property is boosting property Total returns indifferent regions, 2013 Jyväskylä andKuopio * Turku, Tampere, Oulu,Lahti, Helsinki Metropolitan area 4,3% area Helsinki Metropolitan area” Other majorcities*5,3% Rest ofFinland3,9% Whole Finland4,4% -4 Income return, % %■Incomereturn, ■ Capitalgrowth, -3 -3,7 -2,4 -2 -1,8 -1 -1,3 -1,5 0 Kivistö plan is estimated to be approved during 2014. during approved be to isestimated plan The underway. iscurrently process plan city the which for station, railway Kivistö new the to close centre shopping sqm isa110,000 area the in planned project individual biggest The area. the in accommodated be to planned being are jobs many as nearly and inhabitants new 30,000 Some Line. Rail Ring new the alongside motorway Hämeenlinna the and III Road Ring to isclose which project, Marja-Vantaa the called formerly Kivistö, is in area development Vantaa’s biggest have remained stable. stable. remained have rents Overall, Espoo. in areas best the in than lower slightly future. immediate the in started be to likely not are they but types, property commercial all in planned being projects several are 2014. There spring in completion for Tammisto, in scheduled XXL store sports Norwegian the for premises ofnew development isthe underway currently project significant most The area. the in limited were projects retail New underway. still are projects smaller 2013, in some completed and were premises logistics of new sqm 15,000 Some area. the in rate vacancy the in increase an in resulted has supply in 2013. increase The spring in Ilmarinen by completed was office head new Finnair’s of 2013. end the in Furthermore, projects Plaza Airport the acquired institutions Domestic parks. business Line Avia ofIVG’s phase third the and Plaza Airport ofNCC’s phases two including area, the in completed were buildings office 2013, In new III. four Road Ring by complexes park business several well as as area airport World the in the Trade Center including area, the in isabundant supply space office Modern 7,8 1 6,3 Office rents in the best premises in the Aviapolis area are are area Aviapolis the in premises best the in rents Office 5,8 5,4 7,9 6,6 2 3 4 5 6 Source: KTIIndex 7 8 % immediate vicinity, for both office and residential use. residential and office both for vicinity, immediate the and centre city the in properties industrial redeveloped its for known is also Tampere 15 10 and euros. between vary typically rents the stock older in whereas sqm, per €20 above are levels rental buildings, modern in locations office best the In University. Technical the alongside Hervanta in and hospital University the near Kauppi in centre the to close Tulli, and areas in ofHatanpää areas the in centre, W.P. by million. €38.5 for Campus Carey Cargotec ofthe acquisition the was area the in transaction 2013, In biggest the investors. estate real international and domestic both attracted has region The region. Helsinki the outside Finland in area market property active most area. the in environment business the developing in cooperation active pursuing municipalities ofeight consists region Tampere The technology. healthcare and automation and machinery technology, information include region Tampere the in areas expertise Technology companies. service well as as businesses technology high attracted recently has that city old industrial isan Tampere countries. Nordic the in city inland largest isthe Tampere Population: Location: Tampere Lahti Turku, and Oulu, Kuopio Jyväskylä, Tampere, centres: growth 5.2 Other premises. commercial and residential new well as as centre station anew includes plan the future, the In station. the to next hotel the for planned isbeing extension A major 2014. late in completed be will centre The Etera. to sold been has space, retail and ofoffice sqm 12,500 some comprising project, DIXI YIT’s instance, For area. the in investments new making are investors property several and infrastructure the isdeveloping ofVantaa City The redevelopment. major under iscurrently area The centre. Helsinki and trains long-distance airport, the between connections for hub a logistics as position Tikkurila’s enhance will Line Rail Ring of the completion The buildings. administration city’s ofthe 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 In Tampere, modern office space is found in the city city the in isfound space office Tampere,In modern the isalso Tampere region, city biggest second the As 360,000 total: in region Tampere 220,000 Tampere: countries Nordic the in city inland biggest the of Helsinki; 170 north km to be completed in late 2014. late in completed be to estimated and construction, under iscurrently project Hotel Tulli Elo’s vicinity, the In Tower project. of the financing and plan ofthe confirmation the on 2015,in depending started be will construction plans, current to According premises. residential and office includes also project deck Sori called so The station. railway Tampere of the vicinity Pirkkala. in Varma for Centre Retail Partola 11,000 sqm an well as as Keva, by developed isbeing Lielahtikeskus sqm 15,000 the Lielahti, In Hämeenkatu. in store department Stockmann ofthe extension the to due increase also will supply space Retail conditions. economic tight to due postponed been has ofwhich schedule the centre, shopping Ratina sqm a55,000 develop to plans Sponda Koskikeskus, of vicinity the In Hämeenkatu. to next centre shopping Koskikeskus the in and Hämeenkatu, street, main the along companies. for rented be to space office including Hervanta, in ofTechnology University the for campus a new is developing of Finland Properties University area. Sarankulma the in underway is still another and Ratina, in completed was building 2013, In office Nokia. new one of reorganisations supply, major well new as as both to due increased recently has space office of vacant amount The There are plans to build a major multi-use arena in the the in arena multi-use amajor build to plans are There is situated Tampere in space retail expensive most The “Vacancy rate increased in Tampere to due increase in office supply”

The Finnish Property Market 2014 67 The Finnish Property Market 2014 68 Prime office rents inmajorFinnishcities central area are the Linnanmaa area north of the city centre, centre, city ofthe north area Linnanmaa the are area central vicinity. the in property centre medical and office aretail, is developing Ilmarinen and centre shopping sqm a20,000 isbuilding Arina co-operative Local development. facility parking underground the by triggered projects quarter. first the in a€31 in deal million Peltola Campus Nokia the acquiring 2013 in by region the in transaction property significant only the out Technopolis carried market. office the in player important isan Oulu, in founded Technopolis, originally company property Listed strong. quite remained has market the in position whose funds, pension domestic years. recent in region the in decreased has jobs industrial of number The industries. chemical and paper, metal include sectors manufacturing biggest The region. ofthe specialities as regarded are sectors technology other and services technology Information services. ison structure economic region’s ofthe emphasis The country. entire ofthe area the of one-half –about Finland ofnorthern all covers of which city, influence the technology and science is auniversity, Oulu mid-1990s. the since Finland in regions city growing fastest ofthe one been has region Oulu The Oulu. with merged Yli-Ii and Oulunsalo Kiiminki, of Haukipudas, municipalities of2013, surrounding the as beginning the in Finland in city biggest fifth the became ofOulu City The Population: Location: Oulu 10 15 20 25 30 35 eur/sqm/month 5 The most important real estate markets outside the the outside markets estate real important most The development retail significant are there centre, city the In attract to enough islarge market estate real Oulu’s

1995 Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki 1996 1997 1998 1999 2000 235,000 total: in region Oulu 194,000 Oulu: ofHelsinki north km 600 2001 2002 2003

Source: RAKLI-KTIPropertyBarometer 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (autumn 2014) growth centres. growth Finnish other most in than ishigher Turku in region services ofprivate proportion The difficulties. severe experiencing iscurrently which but ofview point development economic region’s the from importance ofgreat been traditionally has which business, shipbuilding extensive an by supported are region the in industries Metal biotechnology. well as as cluster, sea the around businesses include areas competence current region’s The Finland. in university Swedish-language main the example, for city, accommodating, university traditional Turku is astrong of Finland. corner south-western the in municipalities of eleven consists Turku region The Population: Location: Turku Turku premises can mainly be found in the outskirts of the city. ofthe outskirts the in found be mainly can premises city. Vacant the in companies sector IT ofthe restructuring significant the to due increased recently has but years, several last the low for very remained has rate vacancy office The levels. rental affects which isdispersed, areas these in stock of the quality city. The ofthe south Limingantulli and University, Oulu and companies high-tech several accommodates which Prime office yieldsinmajorFinnishcities 10,0 5,0 5,5 6,0 6,5 7,0 7,5 8,0 8,5 9,0 9,5 %

1995 Turku Oulu Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki 1996

“Office vacancy rate vacancy “Office 1997 increasing in Oulu” in increasing 1998 1999

325,000 total: in Turku region 182,000 Turku: ofFinland corner south-western in ofHelsinki; west km 160 2000 2001 2002 2003

Source: RAKLI-KTIPropertyBarometer 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (autumn 2014) the Auriga Business Center near the harbour. harbour. the near Center Business Auriga the and station railway main the near premises office Logomo the centre, city ofthe west Park Business Nereis new the include area the in projects office completed recently Other 2013.late in completed was park business ofIntelligate phase second the station, Kupittaa the to Next there. holdings significant have also companies property and institutions domestic but area, the in investor biggest isthe Properties Technology Turku recently. area the in active been also has development Residential space. manufacturing high-quality and office of consists and companies, service business-to-business and biotechnology at high-tech, targeted ismainly area This area. Turku the in market office active most is the station, railway Turku. in holdings its all divest it will that announced has Sponda investor. alocal to centre city the near property old office an sold Sponda end, year the At Finland. in investment first Hemsö’s was This Sciences. ofApplied Turku University the by occupied building ofthe property the acquired Hemsö Swedish the area, same the in and building, office Electrocity ofthe majority the purchasing by area Kupittaa the in portfolio its expanded Properties Turku Technology area: the in recorded transactions three 2013 were there In players. local and domestic by dominated been years, Kupittaa, located near the university area and next to the the to next and area university the near located Kupittaa, recent in has, market investment Turku property The “Several officeprojects “Several completed in Turku in Value addedbyemployee(€)inparenthesis Value addedbysectorandregion 2011,% Jyväskylä region (58,118€) Jyväskylä region Tampere (65,140€) region Helsinki region (75,288€) Helsinki region Whole Finland(64,534€) Kuopio region (64,228€) Kuopio region Turku (63,730€) region 2013” Lahti region (57,254€) Lahti region Oulu region (64,483€) Oulu region 8090 40 70 30 5060 1020 100 0 % private services ■publicservices trade■privateservices ■ wholesaleandretail ■manufacturingconstruction andfishery forestry ■ agriculture, the city centre. centre. city the in premises retail existing the for plans redevelopment some also are There XXL. store sports the be will premises new the in tenant biggest 2014.in The centre shopping Mylly ofthe extension sqm 24,000 the start will TOK operative co- local the and SGroup area. Skanssi in park retail sqm ofa9,000 construction the to due increased recently has stock Retail area. the in increased has space retail of vacant amount the properties, box big ofnew completions recent to Due Raisio. in centre shopping Mylly ofthe surroundings the Turku in and areas Skanssi and Länsikeskus the as such city the outside centres regional some in and centre stock. older the in mainly areas, other in increased recently it has although area, the in level at a moderate is currently rate vacancy The future. the in development further its enabling area the in sites office several are There properties. leisure and educational housing, business, comprising campus innovation an create to area the within portfolio its extending for plans major has it and area, Kupittaa the in of space sqm 96,000 around owns company The area. Park Turku Science the in investors other of Turku and City the between venture ajoint Properties, isTurku Technology area Kupittaa the in player main The (12-14€ centre city the sqm). in per those -than average on month per sqm 15€ per –at about higher clearly are The retail market in Turku is concentrated in the city city the in Turku in isconcentrated market retail The rents area, Kupittaa the in space office modern the In Source: StatisticsFinland

The Finnish Property Market 2014 69 The Finnish Property Market 2014 70 rents are still found. found. still are rents retail highest the iswhere that and strong, remains position market district’s shopping pedestrian the development, new active Despite stable. remained have Rents levels. Tampere Turku and the to close are levels rental properties, prime In tenants. attracting continued have particular, in offices, low. rather Modern remains rate vacancy the although 2013. in Jyväskylä in reported were transactions planned. being are projects supermarket three or two and 2013 in completed Muurame, in was centre retail sqm A4,000 limited. iscurrently space ofnew development but years, few past the during significantly increased supply retail The investors. national some well as as retailers local include players major The centre. regional important is an 8%. around to increased has rate vacancy the and conditions, economic challenging to due decreased has demand Space use. office into redeveloped been have properties old industrial where Tourula, and area Ylästönniemi Mattilanniemi/ the include supply modern with areas office Other project. ofthe phase next the start to is planning 2013 late 4in Park and Business Innova the completed Technopolis where area, Lutakko the in concentrated been recently has development Office developed. been recently has stock however, new no where, region, the in roads. main national important ofseveral junction it isat the because isfavourable location Jyväskylä’s services. in currently are jobs region’s Two-thirds ofthe services. intensive knowledge- emphasises also region the strategy, regional its In industries. healthcare well as as ICT and materials construction and wood cover areas industry region’s Jyväskylä The technology. new and industries traditional Population: Location: Jyväskylä The amount of vacant retail space has increased slightly, increased has space retail ofvacant amount The major No area. low the in remains demand Investment centre city Jyväskylä’s market, property retail the In area market office important most isthe centre city The both emphasises that town isauniversity Jyväskylä total: in region Jyväskylä 135,000 Jyväskylä: ofFinland centre the in of Helsinki, north 270 km 177,000 ongoing commercial property development projects. projects. development property commercial ongoing other no are There underway. got hospital university the of /extension redevelopment and completed, was building office 2013, In space. state’s one retail of vacant amount the in increase an as resulted has supply However, new centre. the in properties retail ofsome refurbishment the and facility parking underground ofan completion the by supported been has attractiveness centre’s city city. The the outside 10 km some Center Retail Ikano of the completion recent the from positive. very isnot demand for outlook the and high, isrelatively space ofvacant amount The areas. hospital and university the to close areas, two Technopolis in Kuopio’s well as as centre 2013. in published transactions no were There investors. local and national ofboth consisting players domestic by is dominated market sectors. industry environmental bio, and and health food, emphasises city the strategy, its In cities. major other in than isgreater sector public the in ofoccupations proportion The industries. in 8%are some region, the in jobs 41,000 around Of area. the in employer biggest isthe sector service the moment, at the cities Finnish major most in As wood. to related mostly are areas industry Traditional Finland. eastern in Savo, issituated of province ofthe capital the and city auniversity Kuopio, Population: Location: Kuopio The retail space market in Kuopio city centre is suffering issuffering centre city Kuopio in market space retail The city the in isconcentrated stock office Kuopio The property Kuopio the in base investor property The

Kuopio region in total: total: in region Kuopio 106,000 Kuopio: ofHelsinki north-east km 400 132,000 nforma 2014. in started be also will centre Terminal ofanew construction the vicinity, the In Log. TS and Group Indoor to rented premises logistics acquiring things, other by, area the in among portfolio its 2014, expanded it has early In companies. service business for premises office instance, for redeveloped, it has where properties, industrial ofold developer and owner is amajor Oy Renor station, of 2013. half second the in Lahti, near Orimattila, sqm. of 34,000 area aleasable with centre isashopping there area, Karisto the In Toriparkki. project facility parking underground ongoing the through enhanced isbeing centre city of the position The street. main the in and Trio centre shopping use. residential for redeveloped be to planned are or been have properties office older Some 8%. at around iscurrently rate vacancy office The redevelopment. on concentrated iscurrently centre city the in development Property use. other into buildings industrial old transferred have that efforts ofredevelopment a result at 17.45 standing of2013. end %at the cities, big the among rates unemployment highest the from suffering currently are Jyväskylä, with together However, %. Lahti, 30 to decreased has share industry’s while region, the in jobs % of the 60 some represent currently occupations trade and Services region. the in operators logistics attracted has location favourable region’s The base. educational astrong isalso there where design, and tech clean in competence emphasises region The services. professional to transferred been have jobs more Recently, industries. plastics and furniture woodworking, metal, to is home that city industrial is atraditional Lahti Population: Location: Lahti railway the near area, Askonalue old industrial the In in completed was ofItella centre logistics major The the around concentrates centre city the in supply Retail as increased has centre city ofthe attractiveness The Lahti region in total: 200,000 total: in region Lahti 103,000 Lahti: ofHelsinki north-east km 104

The Finnish Property Market 2014 71 The Finnish Property Market 2014 72 publication publication The sponsors of this their businesses. their businesses. and customers ofits needs the into insight excellent Education Estate Real KIINKO gives This financiers. and investors providers, service developers, –end-users, industry the in players all together brings concept unique company’s The industries. construction and estate real the in operating leaders executive-level and management middle for services training and education professional www.hel.fi or http://en.uuttahelsinkia.fi projects. estate real for looking investors and developers for support We provide also location. a new for looking are that companies and investors to city ofthe conditions business the regarding consultation offers ofHelsinki City The Asia. and Europe between hub business important an increasingly are and Russia in business ofdoing We history along have Russia. and Scandinavia both with history We our people. million share hundred one than of more market developing is a rapidly which region, Sea Baltic ofthe heart at the we are Moreover, Finland. of capital cultural and political commercial, isthe Helsinki environment. stable and a green in infrastructure advanced by supported workforce educated highly most Europe’s businesses offers West,and Helsinki East of the crossroads at the located Strategically sizes. all of organisations welcomes Helsinki companies, innovative www.capman.com successfully. exited been 32 have of which out investments, 91 made has 31, Estate Real 2013,of December CapMan As Sweden. and Finland in particularly investments estate real in experience extensive has countries, Nordic the in networks excellent with professionals management asset and investment 25 comprising team, The developments. property and properties hotel and commercial in invest which funds, estate real equity private four manages Estate Real CapMan 2001. since Exchange Stock Helsinki the on listed been has 1989 and in established was CapMan Luxembourg. Oslo, Moscow, and Stockholm, Helsinki, in 105 people approx. employs CapMan Altogether, funds. and team investment dedicated own its has of which -each Estate Real CapMan and Market Public CapMan Credit, CapMan Russia, CapMan Buyout, - CapMan partnerships investment key five has of €3.1 CapMan billion. Russia, with assets under management management under assets with Russia, and countries Nordic the in firms equity private leading ofthe isone CapMan offering a wide range of higher ofhigher range awide offering company training leading Finland’s is Education Estate Real KIINKO As a prime location for for location aprime As business. international for hub isadynamic area Helsinki The occupiers. Newsec was founded in 1994 and is owned by its its by isowned and 1994 in founded was Newsec occupiers. and investors owners, property to Solutions Corporate and & Advisory Valuation Management, &Property Asset Leasing, Markets, Capital areas business the within services of range acomprehensive offers Newsec region. the in firm property commercial specialised largest the far –is by Europe Northern in House Property Service Full –The Newsec estate industry. real the within workplace best isthe and Finland in workplaces top the among time seventh the for nominated was Finland Newsec Finland, Work to Place Institute® 2014 Great the by out carried asurvey In corporations. and investors estate real international and Finnish leading the among are clients Its Oulu. and Hämeenlinna Tampere, Turku, Jyväskylä, Helsinki, in offices with Finland, in 180 employees about has Newsec Sweden. Stockholm, in isheadquartered which Group, Newsec of the is a part Finland 1989, in Newsec Founded solutions. corporate and management estate real corporate management, property and asset well as as services finance corporate and consultancy estate real analysis, and valuation brokerage, leasing and advisory transaction investment www.ncc.fi partner. Building Green EU’s it isalso and buildings office for Scandinavia in certifications Good Very BREEAM first gained has Development Property NCC Method. Assessment Environmental BREEAM international the to according out carried are projects All Euromoney. magazine financial international the by year consecutive sixth the for developer property best the as elected been has Development Property NCC projects. retail other and centres shopping headquarters, company parks, business are products main NCC’s housing. and office retail, combining construction, purpose multi-use for concepts business new developing in active been it has Recently, properties. ofthe lifecycle entire the for services provides and premises logistics and retail office, leases and sells develops, acquires, Development Property NCC persons. 2,900 employs it and million, at €990 stands turnover annual NCC’s Finland, In Roads. NCC and Development Property NCC Housing, NCC Construction, NCC are Finland in areas business company’s The ofinfrastructure. types other and structures engineering civil roads, housing, facilities, industrial offices, builds and projects property commercial and residential develops NCC billion. €6.68 totalled sales 2013,In annual employees. 18,000 has and region Nordic the in companies development and housing leading ofthe isone company www.kiinko.fi networking. extensive and seminars combining in Finland, convention estate real important most it isthe participants With 500 its Education. Estate Real ofKIINKO events main ofthe is one Prospects Investments ofProperty Convention Annual The professional advisory services comprising comprising services advisory professional ofintegrated range awide offers Newsec working, living and communication. The The communication. and living working, for environments future offers NCC assets have a fair value of roughly 2.3 billion euros. billion 2.3 ofroughly value afair have assets investment Its Petersburg. St and growth ofurban centres largest Finland’s in homes rentable 24,000 ofsome atotal owns www.rakli.fi. visit: information, more For procurement. and management asset finance, and investment coordinate committees The Infrastructure. and Development Urban and Properties, Public and Commercial Properties, Residential are branches The committees. three and branches three into divided are activities RAKLI’s professionals. construction and property together brings association The total. in 200 around number organisations member and sector, public the and private the both represent members The Finland. in providers service management and investors owners, infrastructure and building residential estate, real prominent most the representing association trade and group interest www.ovenia.fi locations. 23 in professionals 550 property than more employs company The 2013 million. for €43 over was turnover Group’s the and Finland across metres square 10 over million to amounting portfolio aproperty administers Group Ovenia The management. asset estate ofreal sub-areas all covers offering service comprehensive company’s The management. property for certification 9001 ISO receive to Finland in company first the was Ovenia work, ofits recognition In Finland. in field its in company oldest and largest isthe Ovenia management, estate real residential in ofexperience years 70 over and premises commercial and business in of experience years With 30 over parks). business (including management facility premises business and administration financial estate real housing, and maintenance (technical management services services), construction management, centre shopping development, property premises), office and (commercial leasing are services main Ovenia’s services. housing and management property residential management, premises business management, estate real commercial units: business strategic key four has Ovenia assets. estate ofreal value the developing and maintaining for portfolio service estate real customer-driven ranging wide www.newsec.com, www.newsec.fi market. estate real of the knowledge superior has Newsec operations, various ofits depth and breadth the with and volume, great this Through metres. square million 11 over with properties 1,500 over manages and assignments ofsuccessful hundreds out carries Newsec year Every offices. 20 over in professionals 600 over Today, employs Group the partners. management services. Ovenia provides a a provides Ovenia services. management facility and property ofasset, provider leading isFinland’s Group Ovenia The Owners and Construction Clients is an isan Clients Construction and Owners of Building Association Finnish The corporate investors in housing. SATO housing. in investors corporate leading SATO ofFinland’s isone company employed about 2,190 people. about employed company the and euros million 798 2013in approximately were operations Oy’s Skanska for sales combined The construction. environmental and civil and services, building construction, building include services Construction partnerships. private public- and development project commercial and residential services, construction cover Finland in operations Skanska’s 16 billion. EUR nearly 2013 in sales totalled Skanska’s Exchange, Stock Stockholm the on listed and Sweden Stockholm, in Headquartered America. Latin and US the Europe, in markets home selected in employees 57,000 has currently Group The Green solutions. for choice first clients’ the be to aims Skanska experience, green global its on Based partnerships. public-private and projects residential and ofcommercial development construction, in expertise with groups construction and www.seb.fi or www.sebgroup.com Poland. and Germany Denmark, Norway, Finland, Sweden, in clients estate real to finance andfinancing, other products SEB including structured offers and clients estate real for isresponsible division, Banking ofMerchant isapart which Estate, Real Commercial SEB Helsinki. central in based employees 350 has today and 1984, since Finland in present been has SEB employees. 16,000 about has Group The customers. as institutions and corporations 2,800 and customers SME 400,000 customers, private 4,000,000 has SEB worldwide. countries 20 some in presence its in is reflected business SEB’s of nature international The clients. institutional and corporate to offering afull-service on based banking investment and corporate on focus astrong have operations bank’s the Germany and Norway Finland, Denmark, In services. of other range awide and advice financial offers countries Baltic the and www.sato.fi 108.1 million. EUR was profit Operating million. 70.9 EUR was taxes 311.5 before EUR was profit and million 2013 in turnover Group’s The companies. insurance other and insurers pension Finnish are shareholders SATO’s biggest personnel. dedicated on and ofcustomers needs the forecasting renewal, constant on isbased edge competitive Our development. property in benefits synergy achieve to order in housing owner-occupied We work. produce repair and divestments investments, through property housing of our value the We increase connections. transport public to close environments urban in buildings apartment on housing our view. We a long-term with focus and We profitably operate initiative. encourage and development sustainable we promote work, our In experience. customer excellent an and housing rental in alternatives comprehensive offer is to SATO’s aim group. As a relationship bank, SEB in Sweden Sweden in SEB bank, arelationship As group. services financial Nordic isaleading SEB leading project development development project leading world’s of the is one Skanska

The Finnish Property Market 2014 73 The Finnish Property Market 2014 74 professionals based in Helsinki and Oulu. www.trevian.fi Oulu. and Helsinki in based professionals finance and estate 10 of over real iscomprised team Trevian’s management. under ofassets M€ 500 approximately has mandates management asset other with together and funds, estate real own oftheir three manages presently Trevian investors. professional other and banks investors, institutional investors, estate real for especially services its streamlines company The funds. estate real entire managing and developing to value, their enhancing and properties single renting from ranging investors, for products investment optimised produces company The management. asset and investments estate real commercial in specializes Trevian personnel. ofthe members key by isowned company The solutions. management and investments property structured company, delivering management asset and equity www.srv.fi/en Estonia. in wellMoscow, as as and Petersburg St. in SRV is active Finland, in operations our to addition In people. a thousand to close employ and million 700 EUR of approximately We revenue have company. listed 1987, in isapublicly Plc Founded SRV Group best results. the achieve to transparently cooperate parties project all that SRV management. customer-oriented Approach The ensures project effective and development project innovative on based is model operating Our needs. customers’ our to response in solutions new create and concepts We refined offer innovations. new generate we boldly environments business and ofresidential builder and developer www.facebook.com/skanskafinland www.skanska.fi, Finland. and Denmark Sweden, in locations strategic in is conducted properties retail volume and oflogistics development The Finland. in Helsinki and Norway in region Oslo the Denmark, in region Copenhagen the Sweden, in regions metropolitan three the in concentrated are operations company’s The buildings. commercial and premises business logistics, offices, in projects property develops and initiates which Nordic, Development Commercial Skanska of ispart Finland Development Commercial Skanska to live and for businesses to operate. As a a As operate. to businesses for and live to people for frameworks best the SRV provides independent estate private real isan Management Asset Trevian Building Kiinteistö Property Key terminology Useful Useful Rent pension fund company/ insurance Pension company investment estate Real company estate real Mutual company estate Real Housing company Limited company Transaction cost /maintenance Operating Investment Tax Landlord Tenant agreement Rental Yield Return Office (space)Office fund Property Site Residential Hotel Logistiikka Logistics Warehouse Manufacturing Industrial centre Shopping (space) Retail Vero Tontti

Tuottovaatimus Hotelli Tuotto Vuokralainen

Vuokranantaja Teollisuus Asunto

Varasto Kauppa

T Tuotanto stiStCoE

Property MarInforma Property Rakennus Eläkevakuutusyhtiö/ Kiinteistösijoitusyhtiö kiinteistöyhtiö Keskinäinen kiinteistöyhtiö Kiinteistöosakeyhtiö, Asunto-osakeyhtiö Osakeyhtiö hoitokustannus / Ylläpitokustannus Vuokrasopimus Vuokra Sijoitus Kiinteistörahasto eläkerahasto Kauppakeskus myymälä(tila) Liiketila, Toimisto(tila) Photos: Sponsor companies’ archives companies’ Sponsor Photos: 978-952-9833-47-4 ISBN +358Fax: 7430 20 131 Tel: +358 7430 20 130 28,Helsinki Eerikinkatu Finland KTI Publisher in co-operation with:

The Finnish Property Market 2014 75 The Finnish Property Market 2014 76 Ovenia Group, RAKLI, SATO, SEB Commercial Real Estate, Skanska, SRV and Trevian Asset Management. Asset Trevian SRV and Skanska, Estate, Real SATO, Commercial SEB RAKLI, Group, Ovenia Newsec, NCC, Education, Estate Real KIINKO ofHelsinki, City Estate, Real CapMan with: co-operation in Finland KTI