The FinnishProperty Market 2012

The Finnish Property Market 2012 1

The Finnish Property Market 2012

5. 4. 3. 2. 1. Preface Contents Key Terminology publication of this Sponsors The 6.

strong relatively remains competitiveness international Finland’s 2.4 2013? in growth to back economy: Finnish the for Outlook 2.3 challenges facing but strong, going –still finances public Finnish 2.2. 8 economy ofthe structure 2.1 The 4.3 Property investment market in 2012 in market investment Property 4.3 sector service estate Real 4.2 structure 4.1 Ownership practices and –market structure sectors Property market property Finnish the in players and Structure market property Finnish of the aspects Institutional economy Finnish The Finland about facts Basic Property markets in different regions – Outlook for 2012 for –Outlook regions different in markets Property Jyväskylä and Lahti Kuopio, Tampere, Turku, Oulu, centres: growth Other 6.2 area metropolitan 6.1 Helsinki 5.5 Hotels Hotels 5.5 market 5.4 Logistics sector residential 5.3 Rental marke retail The 5.2 market 5.1 office The investment property indirect for Legislation 3.5 TaxationFinland in 3.4 Planning 3.3 renting and investment ofproperty practices Market 3.2 ownership 3.1 Two of property forms 7 t 60 46 4 2 49 49 39 56 42 23 23 63 35 35 33 1 1 19 18 14 14 31 1 2 1 2 9 8 8 5 8

The Finnish Property Market 2012 5

Preface include CapMan Real Estate, Helaba, HYY Real Estate, Estate, Real HYY Helaba, Estate, Real CapMan include management and finance markets. The companies sponsoring development, investment, property Finnish the representing request. upon needs, specific for sub-markets individual the on analysis and information detailed more provide also can KTI Finland and practices. market structure Finnish property 2001. since annually report the published has Finland KTI market. property Finnish the in interested the satisfy to aims 2012 information needs of and investors international other players Market Property Finnish The This publication is sponsored by 11 companies companies 11 by sponsored is publication This the of overview comprehensive a provides report The satisfaction measures in the Finnish property market. Based on these databases, various kinds of benchmarking and analysis +358 www.kti.fi call analysis 7430 visit 20 130 or please and information, more For benchmarking of provided. be can kinds services various databases, these on Based market. property Finnish customer the and in costs measures operating satisfaction transactions, rents, returns, on databases extensive maintains KTI industry. estate real the for Finnish services research and information providing company service and organisation research independent an is Finland KTI Hanna Kaleva Hanna KTI Finland KTI We hope you find this worthwhile reading. worthwhile this We find you hope it at [email protected]. to subscribe please e-mail, via newsletter the covers Tomarket. this the receive Finnish property news from latest which Monthly, Property Finnish newsletter, sponsors. the thank to wishes KTI report. this for support financial provided have Finland, in Invest as well as Helsinki, of City the Clients, Construction and Owners and Banking – for the Merchant Property Finnish Association Also, RAKLI Skanska. SEB Corporation, Sato Ovenia, Newsec, NCC, Education, Estate Real KIINKO Polar, IVG The report is also available in PDF format at www.kti.fi. www.kti.fi. at format PDF in available also is report The electronic monthly a publishes also Finland KTI

The Finnish Property Market 2012 7 The Finnish Property Market 2012 8 1. Basic facts about Finland Parliament ofState Head governance and History Currency industries important Most capita per GDP Economy cities important Other city Capital Religions Languages Population People Distances Total area Geography Party (35) Party (39), 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 1.3.2012) from 2012, in (elected starting Niinistö Sauli ofRepublic, President 1995 since Union European ofthe Member 1917 since democracy Independent (since 2002) Euro goods electrotechnical and Electronics products industry Chemical products industry Forest products engineering and Metal (2010) €33,608 97,000 Kuopio, 102,000 Lahti, 132,000 Jyväskylä, 144,000 Oulu, Turku, 179,000 Vantaa, 203,000 Tampere, 215,000 252,000 Espoo, biggest the being Vantaa and –Espoo municipalities neighbouring comprising Helsinki and 13 inhabitants 1.35 million region, Helsinki inhabitants 595,000 Helsinki, 1.1%Orthodox 78.2% Lutheran 3.1% nationals: ofpopulation Foreign 5.4% by spoken Swedish, 90.0% by spoken Finnish, languages: Two official km2 2 per Finland): (northern region Lappi km2 per 222,6 Finland): (southern region Uusimaa kilometre square 17,6 per Density: inhabitants million 5.40 west to east km 540 south, to 1,160 north km kilometres square 338,000 engineer and other knowledge-intensive services. knowledge-intensive other and engineer includes which services, business is sector service exporting to amounted ca. €18.6 industries billion. services The biggest for exports of value 2010,the In goods. of that as pace same the at increased has exports service of share The survive. to order in reforms structural institute to corporations forced which 1990s, early the in recession was severe the by improved production industrial Finnish international the The of goods. competitiveness for demand the in changes on based fluctuates export-driven are that production industries those for consequence, the a in As economy. changes the the of to structure due decades few past the during on foreign trade, the share of which has increased significantly is or failure highly dependent success Finnish The economy’s competitiveness maintain sectors. to industrial these within order in required been has production value-added higher to transformation as well as specialisation, greater productivity, in increase comparison, international in competitiveness cost low relatively the to Due importance. in increasing are that sectors – industries and by and the the energy environmental industries chemical followed are industries main These economy. Finnish the in role important an play industries metal and electrotechnical both industries, forestry strong traditionally sectors. the with Along industrial main three by dominated are – exports of consists exports – as well production as Finnish Industrial products. Finnish industrial the of 75% ca. as economy, public 2010, In GDP. ofthe 20% almost for accounted services decreased. has industry and production primary of that while constantly increased has share Their currently services account for ca. 49% of Private the Finnish gross production. domestic countries. developed Western balanced. and competitive internationally now is economy the of structure the result, a As transformation. the to contributed 1990s, early the in recession deep the following made reforms as well as 1980s, in markets financial economies the of multifaceted deregulation The most world. the and in richest the of one to agriculture and production on primary based largely society a from itself transformed has Finland decades, few a Within economy 2.1 of the structure The 2. The Finnish economy Industrial production plays an important role in the the in role important an plays production Industrial most to akin is economy Finnish the of structure The “The Finnish“The exports industrial sectors” industrial are basedare on five for Finnish exports include Sweden, Germany and Russia. and Germany Sweden, include exports Finnish for The main the countries from target global turmoil. economic suffer to started exports Finnish 2011,the of year-end the Towards 2010. in 40% some to returned and 2009, in 37% ca. to decreased of exports share the recession, global the to Due 47%. to amounted share its in 2008, atpeak its whereas for only accounted In 22% 1990, exports of the Finnish GDP, ratings. ratings. governments sovereign eurozone for update recent Poor’s & Standard in rating “AAA” its maintains still that countries euro four the of one is Finland 50%. under government remains still debt general 2008, since growth rapid its Despite respectively. -2.5%, and -2.6% at 2010, stood and deficit budget 2009 the In deficit. budget government as well as debt government general the of terms in both Pact, Growth and Stability EU the of criteria the that fulfilled country constantly has euro only the Luxemburg, with together Finnish is, Finland well-balanced. countries, and strong very European are finances public other most to Compared challenges facing but strong, going –still finances public 2.2. Finnish Finnish economicstructure,% “Finnish are exports finances strong” are “The Finnish“The public suffering from the from suffering global economic turmoil” Public services ■Privateservices ■Publicservices ■ManufacturingConstruction production ■ Primary 1975 1980 1985 1990 1995 2000 2005 2010 0 20 40 municipalities, as well as outsourcing of services are used as as used are services of outsourcing as well as municipalities, government’s between co-operation current increased Mergers, the agenda. political in prioritized highly very are revenue. tax decreased and services municipal for demand increased both to currently due challenges are increasing facing finances government local The workforce. Finnish of for 20% the total account who workers, municipal 460,000 are In there total, of expenditure. 40% all public ca. for account Municipalities position. financial and structure economic size, their to from regard with differ significantly other each Municipalities Finland. in municipalities currently 336 are There municipalities. for support economic provides which also by the government, is regulated services these of level and availability The care. citizen’s senior and healthcare, education, including municipalities, by provided is services social Finnish comprehensive the of part major A services, are likely needed to balance public finances. finances. public balance to needed likely are services, social extensive in cuts as well as taxation, in changes both Therefore, stability. economic sustain to sufficient not are 2011 summer the in programme government’s current the in introduced actions balancing the that likely it seems now outlook, economic worsened the to fiscal Due support sustainability. and spending public reforms control to needed structural are population, ageing rapidly the to due mainly Also, finances. public Finnish put on pressure has increasing environment economic tightening the However, Reforms in the municipal structure and service provision provision and service in structure the Reforms municipal 60 the social services “A major of part are providedare by municipalities” 80 Source: StatisticsFinland 100 %

The Finnish Property Market 2012 9 The Finnish Property Market 2012 10 merger procedures. merger of effective more of use the execution necessitate will the mergers municipal suggests also group working Ministry’s the The is reforms. structural municipal for pressure driver powerful most financial Therefore, measures. any of coercive enforcement the prevent might pressures autonomy, political local strong the to Due challenges. increasing the with cope to applied being are strategies varied thus and taxes, levy to right the and decision-making local on based However, Finnish have municipalities self-government strong environment. economic changing the in flexibility their improving and finances municipal strengthening at aimed are also restructuring for government local proposals group’s working The present. at than lives daily people’s of nature match the and scope also should better They services. public basic of provision the safeguard better can and efficient and that is robust structure on for the a need based municipal are should be to decreased ca. 70.. The working group’s proposals municipalities of number the that suggested 2012, February the discuss municipal reform, which in its published report, in to group working a nominated specialist Governement Local and of Administration Minister Public The provision. service potential means to the increase of scale and local productivity “Reforms in“Reforms municipal structure discussed discussed structure actively” ageing, states the OECD. the states ageing, would soon to be with needed deal consolidation the of costs fiscal challenges. further significant reforms, long-term retirement major Without these address to sufficiently costs for early-retirement lower fiscal could and supply labour increase would schemes tightening work further to and incentives individuals older improving age, retirement the Raising population. ageing the to related challenges future fiscal with deal to enough ambitious not are policy programme government’s the in plans current the that Finland workers. older for retirement and of postponing education generations younger the up speed to means for looking by both pursued is This services. of public sustainability the support to means one as of the working-life is duration discussed lengthening actively Therefore, increasing. is services welfare and social for need the time, same the at and, decreasing, started has workforce the population, the of ageing the to Due population. the of expectancy life increasing the as well as II, War World the after born generations baby-boom the of retirement the of level of 17% to 23%. The ratio is rapidly deteriorating because current its from increase will 15–64) aged those to over and 2020, the old-age ratio dependency (the ratio of those aged 65 By EU. the within unfavourable age most the of one Finnish is pyramid The economy. Finnish the facing challenges The OECD stated in its recent economic survey on on survey economic recent its in stated OECD The main the of one is population the of ageing rapid The “Retirement reforms are needed to deal with the challenge of an ageing population”

Photo: Skanska / Pauliina Munukka global economy. global the in developments on dependent the highly is but growth of pace again, increase to forecasted are exports 2013, In year. previous the to compared 2012 in slightly decrease to the total volume is of most forecasts, recent expected exports the In 1970s. early the in crisis oil the since deficit biggest the showed trade foreign 11%, Finnish by grew imports And, as 2006–2008. in years peak the of level the reach however, still not, did It 2011. in 8% ca. by increased exports of volume the total, in and, end, year the towards suffer to started exports Finnish the year, the the of half first by positive a After pressured services. and goods most exported for demand decreasing currently is economy Finnish exports. Finnish of countries target the of recovery economic as well as sector, banking of the health good finances, public strong relatively the to thanks area, euro the in average the exceed hopefully will growth GDP end years, the coming the towards In 2012. of growth moderate but stable a to return hopefully will economy The 1.0%. and -1.0 between vary forecasts growth GDP the 2012, For 2011. in 2.5% ca. by the grew Finnish economy forecasts, to economic According been have below, even 2012 zero. to, maybe close to lowered for expectations positive previously the 2011, and of end the towards down slow to started growth Economic turmoil. financial European the by affected been again however, has, which path, growth slow relatively but stable a to returned economy the 2010, In 2009. in 8% ca. by decreased GDP the exports, in collapse the to due and, economy. Finland was hit badly by the crisis financial in 2008, economy is to highly exposed the in developments the global at €24,400. stood which average, total EU27 the above well is This 2010. in €33,608 to amounted capita per production domestic The gross Europe. Finnish in countries wealthiest the of one is Finland 2013? in growth to back economy: Finnish the for 2.3 Outlook Of the main contributors for economic growth, the the growth, economic for contributors main the Of Finnish the trade, foreign of dependence the to Due “Modest growth for growth “Modest exports expected” exports “Modest or no“Modest GDP growth in 2012”growth employment. Unemployment currently stands at slightly slightly in at stands improvements currently Unemployment significant employment. for conditions create favourable not does environment economic uncertain the However, current unemployment. of growth the limited also has which generations, baby-boom the of retirement the to due decrease to started has workforce total the time, same the At improve. willl economy the that employees expectation their the in retain to want Companies significantly. the increase not and did unemployment GDP, 2008 to caused in it collapse started that crisis financial the Despite downwards, now standing at ca. 1-2% at ca. 2012. for standing now downwards, adjusted been have forecasts consumption private outlook, deteriorating the to 2011.Due spring since declining been have which figures, confidence in be consumer seen also can This income. disposable in decrease the to contributing are that factors – tightening is taxation time, same the at inflation, and, increasing the by diluted are wages in increases modest stop, to expected is unemployment in decrease The positive. less now is outlook the However, economy. the of of the impact in negative has volatility softened other sectors and environment economic challenging the despite grow to Euro area GDP growth inFinlandandthe -8 -6 -4 -2 % 0 2 4 6 8 Source: StatisticsFinland,OECD,BankofMinistryFinance,IMF In the past few years, private consumption has continued has continued In consumption the private few past years, 1990 1991 1992 “ Decrease in consumer“ Decrease Finland

confidence will affect 1993 1994 1995 1996 Euro area retail sales” 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

**forecasts 2010* *estimate 2011** 2012** 2013**

The Finnish Property Market 2012 11 The Finnish Property Market 2012 12 investments for 2012. for investments in growth on of pressure negative availability put to expected is tightened finance, economic the The with 5%. together some uncertainty, to amounted machinery equipment and estate and real commercial in investments in growth the whereas year, previous the to compared 3%, ca. 5%. by increased in Investments only construction residential particular. in people, of young unemployment the control to required are actions Specific also and is expenses social a of increases driver segregation. social Unemployment growth. economic for opportunities the is preventing of resources economy, as underexploitation the of problems key the of one considered is unemployment figures, low relatively the Despite 2012. in slightly or increase level current its at remain to expected is and 8% under Key Figures – Finnish Economy Key –Finnish Figures Interest rates Interest Unemployment rate Unemployment Change in exports in Change vol) in (change GDP Inflation Retail salesandconsumers'expectations 12 15 -6 -3 0 3 6 9 In 2011, the total volume of investments increased by ca. In 2011, increased of volume investments the total 3 months 10 years Retail sales,3month´smovingaverage 01-1996 time theirowneconomyin12month´s Consumers' expectationsconcerning 11-1996 09-1997 07-1998 05-1999 03-2000 01-2001

2004 11-2001 8,2 8,8 0,2 2,1 4,1 4,1 09-2002 07-2003 05-2004

2005 03-2005 2,2 8,4 3,4 2,9 0,9 7,0 01-2006 Source: StatisticsFinland 09-2007 07-2008 2006 12,2 3,8 3,1 4,4 1,6

7,7 05-2009 03-2010 01-2011

2007 11-2011 8,2 4,3 4,3 6,9 2,5 5,3 Source: Bank of Finland, Statistics Finland, Ministry of Finance, Nordea Bank Bank Nordea Finance, of Ministry Finland, Statistics Finland, of Bank Source: strong relatively remains competitiveness international 2.4 Finland’s groundwork for economic success. success. economic for groundwork solid creates environment macroeconomic Finnish fairly healthy the deficit, public in increase slight the despite that notes also report The strengths. Finland’s as training, mentioned are and education higher in as position top the institutions, as well public transparent and Well-functioning Sweden. and Singapore Switzerland, by preceded only was Finland year. previous the in than higher positions three – Competitiveness fourth 2011, Global Finland ranked September in published Report, Forum’s Economic World The Unemployment rateFinland–Euro area 2008 10 12 14 16 4 6 8 4,3 5,8 6,4 0,3 4,6 4,1 % 07-1997 Euro area Euro

-21,5* 07-1998 “The Finnish“The economy’s 2009 -8,4* 8,2 1,2 0,0 3,7 07-1999 improved in 2011”

competitiveness 07-2000 Source: Eurostat,BankofFinlandandStatistics Finland

2010 07-2001 3,7* 7,8* 1,2 8,4 3,0 0,8 07-2002

07-2003 2011** -1,5** 2,6** 07-2004 3,4 3,0 1,4 7,8 07-2005

07-2006 2012**

07-2007 1,2 2,9 8,1 0,4 0,6 2,7 07-2008 ** forecasts * estimate

2013** 07-2009

07-2010 3,2 2,2 8,0 1,4 3,1 1,7 07-2011 government to substantial tax increases and spending cuts. cuts. spending and increases tax substantial to government the force will in with the this and, decline exports, combined crisis, debt sovereign the of impact the escape to unlikely is Finland that states report The prospects. investment “fair” with capitals, European among twelfth ranked only Helsinki 2012, February from report latest the In Europe. Estate Real in Trends Emerging report ULI’s and WaterhouseCooper’s most regulations. labour restrictive and rates the tax high with Forum, do to Economic have Finland in business doing for factors Worldproblematic the to market. the of According size small the with not-so-positive deal mostly in The particular, perspective, business a living. from Finland, of and characteristics business for support favourable provide healthcare and education high-quality and framework, regulatory transparent stability, economical and political the where economy welfare Nordic respected with together index. this in Zealand New was, after second ranked Denmark, Finland 2011, In Index. Perceptions Corruption Global has International’s well done is Transparency Finland where ranking international Another same the criteria. on based mainly in, live to country best world’s the as Finland ranked magazine Newsweek 2010, In scene. cultural active an and education healthcare, infrastructure, well-functioning security, living overall by of enhanced is Helsinki in quality The live. to city best sixth world’s the as In recent years, Helsinki has in held Helsinki In years, positions Price good recent a as reputation Finland’s illustrate rankings These In 2011,Helsinki ranked Unit Intelligence the Economic The mostcompetitivenationaleconomiesof2012(ranking in2011) several international high rankings in “Finland holds comparisons” United Kingdom(12.) United States(4.) Netherlands (8.) Switzerland (1.) Singapore (3.) Singapore Denmark (9.) Germany (5.) Germany Sweden (2.) Finland (7.) Japan (6.) 5,0 5,1 5,2 5,3 In this survey, retail and offices are considered the most most the sectors. property considered interesting are offices and retail survey, this In assessed. are investments property indirect for preferences investor when 2012, January in published Investment Study, Intentions INREV the in also high ranked were Nordics The to hold well expected turmoil. are in remain the financial global to expected economies is Nordic strong relatively The 2012. in markets favourable property Nordic the in 5,4 interest investor uncertainty, increasing the Despite 5,5 5,6 GCI 2012score Source: World EconomicForum 5,7 5,8

Photo: NCC / Sini Pennanen

The Finnish Property Market 2012 13 The Finnish Property Market 2012 14

Photo: NCC / Sini Pennanen of ownership is commonly used in both residential and and residential both properties. in commercial used commonly is ownership of form This kiinteistöyhtiö). (keskinäinen real companies mutual estate called are company of these types of These occupancy premises. and control physical to the entitling shareholder property, the in space of specific a apartment/amount to connected be may shares The shareholders. real the of owner is the company,limited estate may which have legal one or several the cases, these In property. the owning of purpose sole the for founded company) housing estate/ real (a company limited a through organised be to right. this apply seldom they but transactions, property real to right emptive pre- a have municipalities legislation, in defined cases some In Finland. of Survey Land National the by published and registered are and nature in public are transactions These procedure. specified a to according out carried be to have courts. local by maintained Register Land the with registered are agreements lease land and ownership Direct the municipality. typically landowner, the with agreement lease long-term a have and only building the own to possible also is It ownership. property of form direct basic the is This it. on buildings the and land the owning in means Finland owning property terms, In juridical 3.1 Two ownership formsof property Finnish market property 3. Institutional aspectsof the In practice, it is very common for property ownership ownership property for common very is it practice, In legal are acts official that Transactions with real property and its shareholders, on the other. the on shareholders, its and and hand, one the roles on company, the housing the of clarify responsibilities to aim They mostly buildings. affect residential changes These investments. refurbishment as such in major situations, specific in certain of shareholders responsibilities and procedures decision-making some in also changes were There shareholders. the to plans those of communication the and do repairs to of planning have long-term with legislation the in changes main The 2010. in company. the for framework regulatory the as the normal legislation for limited companies (Osakeyhtiölaki) or Act Companies Housing the apply either to choose can shareholders property, commercial for company estate real mutual a establishing When use. residential for designated is building the of area the of 50% than always more when applied are regulations These (asunto-osakeyhtiö). housing the sector in operate that companies estate real mutual The Housing Companies Act and Decree was revised revised was Decree and Act Companies Housing The regulate Decree and Act Companies Housing The through a mutual real real through amutual estate company” typically owned “Properties are are “Properties dividends to its shareholders. shareholders. its to dividends out pay can company estate real The costs. operating and maintenance covering for responsible is it income this with specific any to The premises. company collects rents from the connected and occupiers, not are shares the companies, In these the properties. or property a certain of owning for purpose founded (kiinteistöosakeyhtiö), company limited loans. own their for collateral as company the in shares their use also can Shareholders lender. to the original the loan covers then a to pay company, the (rahoitusvastike) mutual charge finance who shareholders the cases, these In collateral. as estate for example, for real and building the use and loan, modernisation, and renovation a out take also can company The may be specified in the company’s articles. articles. company’s the in specified be may these shareholders its of and company the division between The responsibilities shareholder. each for designated area floor typically being basis the – association of articles company the in defined is which of basis the shareholders, the from fee maintenance a collects it joint which of for upkeep facilities, and property the of management the for shareholder. the to directly goes and tenant, the and cash flow shareholder the rental between made are agreements rental companies, estate real In mutual In practice, the majority of commercial property transactions property commercialofmajoritypractice, the In property.managementof andownership the organise to way ownership, unless otherwise inagreed the company by-laws. individual owner’s of degree control depends on their share of set by law. requirements which have certain articles, An to fulfil company’s the in defined are company estate real mutual a estate. real of ownership direct to compared complicated less also are Transactions property. 4% on direct versus company limited the of shares the lower: 1.6%on also is rate tax transfer The of owners. the a among ownership is several building divided where for in of example, cases ownership, form flexible more a is company estate real mutual a through property Owning market on practices Impact The other type of real estate company is a standard standard a is company estate real of type other The The mutual real The estate or mutual housing company is responsible A mutual real estate company is a flexible and common common and flexible a is company estate real mutual A of procedures management and decision-making The “In mutual real estate real mutual “In go directly to the companies, rents shareholder” even there the legislation has few restrictions. few has legislation the there even but tenant, the protect to exist restrictions some do market residential the and in Only agreed. if renewal possible, are for clauses break rights automatic no are there regulated, not is indexation terms, lease maximum or There minimum no are parties. two between agreement of freedom full of idea the on based is and world the in liberal most the among registers. company’s estate/housing real the in shares the of as the owner be registered can the purchaser settled, been and simple. As soon have taxes are as straightforward transfer transactions. property into entering when lawyers or brokers estate real use to it is advisable provisions, certain to subject are transactions estate real as but estate, real selling or buying on restrictions no are there principle, In liberal. and simple is system legal Finnish the speaking, Generally transactions and renting concerning Legislation dependent on market cycles. During the most active years of years the active most During on cycles. market dependent market. the in services these of supply increased as resulted has This together. working – tax and financial technical, legal, – typically experts of with types several processes, these to approaches new brought about has This procedures. diligence due stringent and formal more use investors as foreign in importance increased transactions in as parties. domestic two well between out carried as limited, more typically is advisors’ role the assets, developed newly asset in single and In transactions, expertise. finance corporate and extensive use advisory typically parties the transactions, large portfolio In involved. companies of type also and asset the characteristics of situation, the on depending varies process transactions in have involved. are players international where especially processes approaches, diligence standard become due property in Thorough services transactions. specialist for demand resulted increased also has as This practices processes. new investment in property resulted in have – analysis more and sophisticated professionalism players, internationalisation, new of increased emergence the includes which – market property Finnish the in decade last the over Developments investment Property renting investment and of property 3.2 Market practices estate companies. These transactions are not public by law. by public not are transactions These companies. estate of real the shares by made in transacting are the market Finnish ins lgsain euaig etl gemns is agreements rental regulating legislation Finnish shares company estate or real housing with Transactions The development of investment processes is also also is processes investment of development The rapidly have services analysis and diligence Due The role of the advisor or agent property in the investment

The Finnish Property Market 2012 15 The Finnish Property Market 2012 16

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With regards to cleaning and electricity, the owner is typically responsible for the public areas of the building, and tenants have their own own their have tenants and building, the of wear normal by areas caused if costs public the replacement and for repair for tear. and responsible also is responsible waste owner and The and use. they space water the typically management heating, is regarding that with owner agreements means case cleaning the and the This also is electricity owner. electricity, This the and by responsibility. cleaning paid to owner’s are the are regards expenses With building the operational of disposal. and areas taxes outdoor and indoor property both for insurance, costs rent, maintenance land the where are rents Gross 1 which includes net rent plus a service charge covering covering charge repairs. minor and service costs operating a typical plus rent net includes which of exercised. are that variety options different a however, are, There renewal. lease a to statutory no right has tenant a example, for – market property regulation the for unsure. schedule remains final being the currently and are contents renegotiated, the reached, been not has standard new the of terms the on sheet. balance agreement as the However, in capitalised be to have would leases 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 Sector Finland in practices Typical leasing repairs External term Lease insurance Building repairs Internal review Rent Indexation payments Rental rent for Basis taxes Property Traditionally, rental agreements are for “gross rent”, rent”, “gross for are agreements rental Traditionally, commercial the in limited quite are rights Tenants’ Space area / area Space living of Cost Shopping Landlord Landlord Landlord Tenant / Tenant Annually turnover landlord Monthly centres centres 5-15

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living of Cost area Space markets Annually Monthly Tenant Tenant Tenant Tenant Super- 10-15

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further notice further 1 year /until 1 year Cost of living of Cost Residential Residential Space area Space Landlord Landlord Landlord Landlord Annually Monthly

Photo: Skanska / Tiina Ollikainen

The Finnish Property Market 2012 17 The Finnish Property Market 2012 18 authorities, but needs to of but needs follow the the regional guidelines authorities, local by produced is It level. general a at use land ordinating co- and guiding for instrument an is plan master local The Regional by approved and Councils, by and confirmed the of Ministry the Environment. up drawn are considerations. plans Regional environmental and functional structural, in of plans, the land which regional embrace use are reflected are by defined the of Council State. national These principles Decree. the Building and Use in Land 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 detailed and the complement that plan guidelines and Regulations plans. master local local plan, land-use regional a including plans, of land-use levels three has system The Act. Land use in Finland is by regulated the Land Use and Building 3.3 Planning applied. are things, other among improvements, tenant and increases rent stepped periods, rent-free of use the levels, in rent a decrease Besides years. in recent markets office area metropolitan Helsinki the in instance, for seen, can tenants means be to applied. attract This has been clearly cash-flow. their for base stable a secure to wants landlord the as low, typically quite is rent the of turnover. part of turnover-based share the However, agreed an by supplemented rent minimum a in base of consist common usually they more and centres, becoming shopping are rents Turnover-based Consumer Price Index is the most commonly used index. index. used commonly most isthe Index Price Consumer The years. three exceeds term the where leases period fixed yet. applied widely very not but currently, of terms are “green” being contracts rental developed actively Otherwise, savings. energy towards both parties to motivate as well as landlord, the and tenant the between fairly cost energy things, other among of, risks and benefits the share leases”, as to as of the they attempt form basic “green popular more becoming are agreements of kind This rent”. “shared a called sometimes is agreement of kind This tenant. the from the building, the costs of which are separately then recharged of maintenance and management the of care takes landlord National principles for land-use and regional structure structure regional and land-use for principles National various situations, over-supply and downturns In market Rents can be indexed freely in all indefinite leases and in and leases in indefinite all freely indexed be can Rents In some cases, is the rental agreement for net rent, but the “Green leases not are “Green widely applied yet” decisions. decisions. planning their impact sometimes can which employers, and – residents and companies both – taxpayers land-use attract to issues and planning using by other each with compete Municipalities and things. other among sustainability issues, to structure approach urban criticised holistic of been lack have their they for and actively, discussed been obtain. to difficult increasingly becoming are these although granted, be also can space of planned the use the or change exceed to permits for. applied Special is that being of building size and type the allows plan the if granted be may permit building area. the in businesses and of in residents all planning: those concerned landowners, local planning is process aimed at the facilitating involvement The planning. to approach interactive and open an adopt to common. more becoming of plans kinds are these of the municipalities, and integration co-operation increased the with Together of Environment. the Ministry the of approval the require These plans master area. joint urban homogenous a forming between plans municipalities master joint on agree to possible also is It matters. planning in land-use decisions independent to make needs. local to according is defined which has its the own ordinance, authority local content building of every addition, In townscape. physical the of formation and building the regulate to used are plans local Detailed plans. Planning and building permit practices have recently recently have practices permit building and Planning A municipalities. by approved are permits Building municipalities oblige Act Building and Use Land The In the act, have current local authorities powers extensive controls the location of large retail units” “New legislation“New

Photo: Skanska / Pauliina Munukka Photo: Skanska / Pauliina Munukka 16.5% and 21.75%.16.5% and between vary 2012 for rates tax Municipal income. earned worldwide income. Residents are taxed according to to ones. municipal for according rates flat taxed and purposes tax national for rates are tax progressive Residents income. worldwide income capital euros. the 50,000 exceeding for 32% to increases rate tax the and progressive, partly became tax the of time, same the beginning At 2012. the in 30% to 28% from increased was rate tax gains Capital profits. sales and dividend, income, rental interests, example, for on, levied is tax income Capital rate. state at rate a and progressive to the at municipalities a flat tax the to paid is tax Income income. capital and income earned revenue. tax total 36% of the ca. for accounted taxes income 2009, In other. the on services, and taxes goods on and hand, one on gains, capital and profits income, on taxes categories: two from derived is Finland in taxation of bulk The statistics. OECD’s the in taxes are as classified not Churches Orthodox and Evangelical-Lutheran the of some under communities local the to Payments headings. funds different forty security social Insurance various and Social Institution the government), (local government, the municipalities of behalf on levied are Finland in Taxes 3.4 Taxation Finland in 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 for they if income period a24-month 35% of during 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 In Finland, resident individuals are taxed on their their on taxed are individuals resident Finland, In taxpayer income Individual is divided into two categories: be developed in locations with good public traffic traffic public good with only can locations and only connections, if units they would in not harm the economic retail developed large be city-centres, the strengthened. is Outside units retail for location preferred a as position City-centres’ pursued. being is units retail of large location the over control more legislation, new the In region. the of areas other the in Helsinki the in sqm 5,000 than sqm more of units for and area, 10,000 metropolitan than for more applied of is units units retail “large” concerning legislation the instance, for plan, regional Uusimaa the In plan. regional the in defined is unit retail significant a of the size minimum of quality the that the requires law The things. also other among unit, and retail question in region the on depending vary, may “large” of definition The large units. retail for permits building and plans the over ordination co- and control regional increased with deal legislation in of planning in 2011. Changes into force came spring units retail large and land-use regarding legislation new The 2011 in changed units retail large regarding planning and forLegislation land-use 2 The highest state tax rate is 29.75% of 29.75% is rate tax state highest The currently working on this guidance document, to be be to document, 2012. in guidance later published this on working currently specialists, industry the the with of together is, Ministry The Environment legislation. the of application the to unify guidance by to detailed more needs be specified regulation the Therefore, interpretation. for possibilities leaves and general quite is legislation the nature, its By years. four of period the units, a transition after will only be applied fully new legislation retail of kind this For importance. crucial of are connections traffic Here, it. allows plan regional the and centres, – provided centres the city outside located be thus can the they in units retail the with compete do kinds of These units. not large retail retailers typically of regulation overall the in included also are equipment) unit- large and construction size special, furniture (for goods cars, example, trading units retail law, new the In plan. regional the in included be to has units of of this kind possibility The networks distances. reasonable with service of development the enhance should use land the In addition, centre. city of the development transfer taxes, corporate taxes and value-added tax (VAT). tax value-added and taxes corporate taxes, transfer taxes, gains capital taxes, property are investment property agenda. the political the on issues of discussed vividly one most is taxation of structure the Therefore, budget. state the balance to order in increased be to needs revenue tax that likely seems it contrary, the On cuts. tax likelihood further of the decreased have deficit public resulting the and downturn economic the However, Finland. in burden in the to actions taxation total order reduce has serious taken Spain. and Italy, Belgium Denmark, was 43.1%. In 2009 the EU, in is this figure only GDP by exceeded Sweden, to taxes total of ratio The countries. OECD employer. ofthe sector business and size the on of partly depend level contributions The these scheme. unemployment as well as schemes, pension occupational and national scheme, insurance health contributions national security the to payments include employers Finnish by Social paid statistics. comparison tax taxpayers, by paid international in OECD’s as taxes included of some are which are that contributions security social 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 clearly is taxation of level The some obligatory are there taxes, to In the addition actual

The Finnish Property Market 2012 19 The Finnish Property Market 2012 20 direct investment, and the beneficiary company fulfils the the fulfils company beneficiary the and investment, direct of category the into fall shares the If tax. this for percentage lower a set normally which countries, several with treaties Finland tax has special countries. and non-EU non-tax-treaty to disbursement the on applied For is rate tax tax. 30% a dividends, source final a withholds payer the Finland, from royalties or interests dividends, receive they If Finland. in years. following five year, that in during possible in gains the of year the capital loss, or, from if not deductible is investment on made loss Capital deductible. are income, as that expenses interest are related income directly to the investment Capital 28%. been will be taxed at €50,000 exceeding 32%. costs, such Financial previously having 30%, to increased gains) was capital and income rental net (interests, income investment on tax the 2012, of beginning the Since taxes gains Capital specific region, metropolitan place. in are tax this for rates minimum Helsinki the In levied. is of properties. those residential of 5% some and properties, commercial of costs permanent for rates 0.75%. 0.32% and between Tax vary and lower are residences annum. per value taxable the of 0.6% and 1.35% between this range. Currently, rates vary tax within rates the decide municipalities and parliament, the by real from exempt is agriculture property tax. Minimum and maximum or tax rates are regulated forestry in used Land situated. is property real the where municipality the to goes revenue The property. the of value market the of 70% about The property. taxable value the is defined of by local value tax authorities and is taxable generally the on based is that tax property real a to subject is Finland in situated property Real Tax property real on 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 There to home. due is permanent transfer owner-occupied first her or his acquires 39 18and between aged aperson if imposed is tax No 3 Non-residents have a on liability gains Non-residents limited tax capital 1–3% of tax specific a sites, construction non-built For operational the of 17% some represent typically Taxes Share ofthepropertytaxesfromoperatingcosts in2010 costs 83% Other operating Office buildings Property taxes17% costs 95% Other operating the operation of the trade or business is divided between between divided is business to or trade the of attributable operation the income taxable The the of owner-shareholder. income as taxable fully are profits the partnership, limited or general a or entrepreneur business self-employed company. ofthe wealth net the on dependent also is dividends of company,taxation the instance, or is listed the not. company In publicly whether a for non-listed on, depending rules, specific by provided as taxed be will shareholder-beneficiaries the shareholders, its to dividend distributes company liability limited a If 26%. at stood previously having 24.5%, to reduced was rate income tax corporate the 2012, of beginning entity the the Since to itself. attributable income as taxed are profits societies, the co-operative and companies limited of case the In entity. corporate of form organisation the by or determined largely company are the of obligations Income-tax taxation Corporate price. transfer the of 1.6% is tax transfer the company, estate real or housing a in shares buying by made is transaction transfer the the When of price. 4% is property real of transfer the on Tax Transfer taxes non-listed companies, on the net assets of the company. of the assets net the on companies, non-listed it – whether is or listed publicly notthe andalso, dividend for pays that company of type the on depend consequences tax islevied. source at tax no Directive, Parent-Subsidiary the of requirements Transfer tax is usually imposed on the purchaser. the on imposed isusually tax Transfer tax. transfer to subject always nevertheless, are, company in Shares and a seller or are estate non-residents. real housing buyer the both if or exchange stock the through place takes In the case of a self-employed professional individual, a individual, professional self-employed a of case the In Dividend income is partially double-taxed in Finland. The in The Finland. double-taxed is income partially Dividend The transfer of securities is tax exempt if the transaction if exempt the transaction is tax of securities transfer The Apartment buildings 3 Property taxes5% Source: KTI therefore, typically domiciled outside Finland. Finland. outside domiciled typically therefore, for applied are, funds, of kinds These investors. beneficially foreign at targeted funds be cannot structures partnership Finnish However, up. set is structure fund the when consulted be should the authorities tax or income. Therefore, as business can business either be taxed to according income rules taxation fund. Taxation ofthe of a partnership’s incomeactivities of generated by type property the and organisation the on depend income. investment their on taxes any pay not do and in taxation, treatment have a who special funds, pension Finnish the for instance, for important, very is This status. tax own investor’s the to and according taxed income are and gains view,capital of point taxation a from structure most are structures commonly applied. In is principle, partnership a pass-through partnership targeted investors, funds estate domestic real for In structuring in structures. fund importance estate great real of are issues Taxation structures Taxation of partnership structure. or ofbuilding type the on depending 25%, to up 4% from varying rate maximum a with separately, calculated is building each for Depreciation method balance structures. and other of buildings to applies the depreciation declining The taxation. in depreciation services. or (not ofgoods payment) ofdelivery year the in registered are costs and income rules, accounting Finnish to or acquiring maintaining a in business are According deductible. incurred expenses All assets. financial in investing from profits the and services or work for compensation and fees income, types, rental merchandise, income selling from several proceeds as covers such it because broad rather is establishment. permanent ofany regardless tax, to In liable is country Finland. non-tax-treaty a from in company a principle, establishment permanent a to attributable income all and Finland from derived income are their on taxed companies Non-resident income. worldwide their on scale. progressive the using assessed portion. is income Earned 28%at the rate. is assessed income earned-income Capital an and portion capital-income a 23%, which is calculated on the total charge for goods and and goods for charge total the on calculated is currently which 23%, is rate VAT standard The investment. for relevant property is that tax another is (VAT) tax added Value tax Value added The interpretation of a partnership’s tax status might might status tax partnership’s a of interpretation The by deducted are assets fixed acquiring for Costs taxation in corporate of considered income concept The tax pay to liable are Finland in resident Companies “Corporate tax rate“Corporate was tax decreased indecreased 2012” deductions as a higher rent. rent. ahigher as deductions VAT of “lost” the impact to compensate need liable typically for the owner. Tenants not who importance VATare of great period. aten-year to period five-year a from extended been also has period revision The period. revision the under lapsed time the to proportionate and with accordance in amount decreased a only but – rules previous the under case the was as – revision to subject be not VATwill deducted of amount full the that time. means of This lapse the to proportionate is lead which also revision, a could to use taxable of increase an circumstances, some In period. revision set a within transferred is property the of ownership the if or decreases deduction a to entitling if will then the be of revised use the property deduction This activity. business taxable VAT a of use the for property intended is relevant the that provided building, existing an of restoration the as well as building new a the of for construction costs the in included VAT deduct to entitled also property. ofthe ofservices VAT cost the in included the deduct can owner property VAT. The final tenant’s the from deductible is rent the VATin the included cases, these the concerning VAT be met also must tenant The liable. In tenants. and premises are requirements certain that given granted is liability The rents. VAT collecting for for liability services. and of goods lower some VATare groups There for specific rates services. Central tax rates in Finland in rates tax Central securities tax, Transfer property real tax, Transfer property Tax onreal VAT tax rate Capital gains rate Corporate tax Due to the regulation, the VAT liability of the tenant is tenant the of VAT the liability regulation, the to Due is entity taxable a legislation, VAT Finnish Under apply to owner property a for optional is it Finland, In 1.6% 4% 0.5–1.0% 23% €50,000) exceeding on income 30% (32% 24.5% Tax rate Source: Finnish Tax Administration, www.vero.fi Tax Administration, Finnish Source: transfer tax. alwayssubjectto company are inahousing Shares residents. non- are and thepurchaser exchange orifboththeseller the stock place through exempt ifthetransfertakes Transfer ofsecuritiesistax- is 1.6%. company, whenthetransfertax of a(mutual)limitedreal-estate outbysellingtheshares carried The majorityoftransactionsare building andtheland. defined separatelyforthe Taxabletype ofproperty. value Depends onmunicipalityand periodicals (0%). etc. (9%);andnewspapers culturalevents, transportation, (13%); medicine,books, andcateringservices restaurant Special ratesforfood, listed companies,etc. in shares company shares, securities suchashousing buildings, property, real selling from Levied onprofits Note

The Finnish Property Market 2012 21 The Finnish Property Market 2012 22 not expected to become significant. significant. become to expected not is vehicles of kind this of volume the legislation, the by set in 240 apartments its Due portfolio. to the limiting provisions residential some has currently it and 2010, late in founded was Asuntorahasto, Orava status, this for applying at aiming company first The foundation. its from years three within to be listed needs company The rules. accounting strict with comply to and dividends, as of profit the 90% out pay sheet, balance the of 80% of maximum a to capital debt its limit to properties, residential rental in only invest to companies the the by require provisions accepted The 2010. May in Commission finally European were companies of kind this for transparency tax for provisions The in properties. investing residential companies for only given been companies currently property has listed tax-exempt for possibility the However, years. several for legislation REIT of introduction perspective. institutions’ from favourable not thus and taxation, to subject is property in investing companies limited from income Investment status. tax investors’ the to according taxed is income investment and structures transparent tax are partnerships limited met, are conditions certain that provided as, structures, these in drivers major are Taxissues partner. general the is typically company management fund the where partnership, limited is investment property indirect for the structure view,common most of point investor institutional Finnish the From investment property indirect for 3.5 Legislation The Finnish property industry has lobbied for the the for lobbied has industry property Finnish The profit distribution, primarily aimed for institutional and and institutional investors. for professional aimed primarily distribution, profit stable with funds leveraged moderately that introduce it will announced has Oy) Rahastoyhtiö (Finnreit ltd. Management Company Fund Finnreit established newly early This in 2012. granted only was company management fund kind of this has for concession funds first the years, these several for for existed tax legislation Finnish the for Although transparent purposes. fully as considered are and entities taxable not are funds of These 50% fund. to the of value restricted the is funds these of level long- the gearing Also term applied. relatively be may and periods redemption frequency, long subscription and redemption the on limitations include may rules The stipulated rules. as fund the made in be can funds these from and a in redemptions by Investments company. managed management fund structures separate open-ended are funds These Authorities. Supervisory and Financial Finnish by sijoitusrahastolaki) regulated are Finnish Finnish, the (in Act by Funds stipulated Common are funds investment special These property. in invest which funds, investment special The Finnish legislation also enables the establishment of establishment the enables also legislation Finnish The

Photo: HYY Kiinteistöt / Kuvatoimisto Kuvio Photo: HYY Kiinteistöt / Kuvatoimisto Kuvio investment market(€42,9bill.) The structur players in the market, with a share of ca. 36% of the total total the of 36% universe. investment ca. of share a significant with market, most the the in players remain – particular in funds, pension domestic investment – investors Institutional property billion. €42.9 ca. is professional market Finnish the of size The 4.1 structure Ownership Finnishmarketthe property 4. Structure players and in (fair valuesoftheproperties attheendof2011,EURbillions) Direct property holdingsofthebiggestproperty investorsinFinland Ilmarinen MutualPensionInsuranceCompany companies 15% pr Non-listed Varma MutualPensionInsuranceCompany oper Etera MutualPensionInsuranceCompany Aberdeen's funds'investmentsinFinland Aberdeen's companies 12% Listed pr ty Forum FastighetsRealEstatefund Forum Source: KTI(Annualreports,queryforinvestors,estimates) Nordea LifeAssuranceFinlandLtd Nordea Tapiola andTapiola’s Group Funds Pohjola Property ManagementLtd Pohjola Property Cornerstone RealEstateAdvisers Cornerstone funds 13% Real estate oper ty e oftheFinnishpr Sponda real estatefunds Sponda real investors 21% Inter Genesta Property Nordic Genesta Property NV Property FundIKy NV Property ICECAPITAL REAMLtd RBS Nordisk Renting RBS Nordisk CapMan RealEstate national Technopolis Plc Pension Fennia and other3% Charities, tr Wereldhave Sponda Plc Citycon Plc Avara Ltd NIAM SATO Keva VVO usts 0,0 Non-listed property companies/funds ■ Non-listedproperty ■ Institutionalinvestors operty investors 36% Institutional 0,5 1,0 1,5 to ca. €27 and 12 billion, respectively. 12 and respectively. €27 billion, ca. to amount companies insurance other and funds life of assets total 2011, the in behalf INREV’s on KTI by survey out a carried to According TELA. Alliance Pension Finnish the to according €133 billion, some to pension amounted schemes occupational statutory the administering and funds companies insurance pension of investments the of companies. insurance other and funds life include markets institutional the in Other participants portfolios. investment institutions’ in assets total the of three-quarters for account they total, In universe. investment institutional Finnish the of majority the form schemes pension other and companies insurance Pension investors Institutional International investors ■ International companies ■ Listedproperty At the end of the third quarter of 2011, the total value 2011,of value total the quarter third the of end the At 2,0 institutional investment dominate the Finnish “Pension institutions 2,5 Source: AnnualReports, QueryforInvestors universe” 3,0 3,5 4,0

The Finnish Property Market 2012 23 The Finnish Property Market 2012 24 pension funds. funds. pension specific industry or company 21 and workers, sector public for systems pension specific are there addition, In players. which are the companies the seven biggest pension insurance investments. the on return real annual of a3.5% on the assumption based are flows money pension long-term the on on Calculations future. the in pressures investments on return the the increases which reserves, to transferred amount the exceeded now has out paid being pensions of amount the 1940s, in born generations big the the of retirement to Due assets. investment institutional Finnish the of the form basis reserves These pensions. for future to reserves the ofpensions the and is insured another portion transferred the in role significant system. pension Finnish a have not do insurance, pension individual or agreements market labour pension on based systems, Supplementary employees. and employers foundations both and by paid are contributions funds Pension employers. by organised pension companies, insurance by pension and is administered contributions pension annual the of bulk the receives scheme pension occupational The insurance. pension employment-based and regime pension In In total, there are 37 in pension providers Finland, among pay to used is contributions pension annual the of Part of a public basic is a system mixture Finnish pension The “Some 11%“Some of pension assets invested are in Alliance TELA Property holdingsofthemembersFinnishPension institutions’ total EUR billion property” 10 12 14 0 2 4 6 8

1997

1998

1999

2000

2001

2002

2003

2004 between funds. funds. between investments’ estate of however,markedly the investment, total varies proportion Real investments. total their of share 13.1%a 2011,representing of quarter third the at of end billion the €10.9 to amounted investments property system. Their pension Finnish the in participants private-sector funds. property non-listed through done mainly are billion €1.6was invested within the some euro area. investments Foreign this, Of 2010). of end the at billion (€1.82011 of quarter third the of end the by billion €2.2 invstments to increased property foreign of amount The 85%. almost to amounts portfolios property in investments domestic of share the 36%, ca. is portolfios investment total the of share property investments’ Finnish institutions’ the While pension Finland. in are all investments of majority vast The in the value of the equity investments. equity ofthe value the in decrease the to due increased property of share relative the €14.9 to 2011, also amounting 2010).During of end the (€14.1 in 11.2%, billion. billion was portfolios institutions’ portfolios. the in class asset biggest the be to used past, the in which, bonds, in invested 35.1% Some was 38.7%. to amounted investments equity of share the investments, fund hedge and equity private with Together 2011. of end the in shares listed in invested was The seven pension insurance companies are the biggest biggest the are companies insurance pension seven The 2005 in investments the The share of Finnish property pension 28.8% some assets, total institutions’ pension the Of

2006 invest abroad through

Source: TheFinnishPensionAllianceTELA 2007 “Finnish institutions non-listed property

2008

2009 funds” 2010

2011/ Q3 Photo: Skanska / Pauliina Munukka management functions are kept in-house. In the organisation In kept are the in-house. organisation portfolio functions management thus and themselves, institutions by made be to SATO. and VVO companies, investment property residential biggest two the in shareholders major instance, for are, They listed companies. both property of non-listed and shares of ownership the through property funds. property listed non- Finnish major in all investors major are also institutions indirect pension domestic of althought abroad, majority made are The investments larger. somewhat is share the ca is portfolios, in Pohjola’s, Keva’s, 10%,Ilmarinen’s and whereas investments indirect of Varma’s share In the indirectly. porfolio, property property in invests only that one only the is Fund Pension State the institutions, large the Of institutions, portfolios. property the pension dominate clearly investments direct most For funds. between markedly property. in to of €29.6, amounted which some 8.2% is portfolio invested investment Keva’s 2011, of end the At Finland. of Church Lutheran Evangelical the and state governments, in local the employed persons of matters pension the handles who Institution), Pensions Government Local (formerly Keva is the sector in pension the player of 2011.end at significant Another billion €2.7 of portfolio property domestic direct a had of billion. Ilmarinen €4.0 some portfolio domestic direct turmoil. economic global the by caused shares listed of values the of decrease the 2011,to due mainly during portfolio investmentthe in value total thein decrease a reported companiesbillion, Bothrespectively. €27 €31 and ca. of portfolios investment total with Finland, in companies Finnish legislation requires the investment decisions decisions investment the requires legislation Finnish to exposure have also companies insurance Pension varies investments property indirect of share The a with Finland in investor property biggest the is Varma insurance pension biggest wo t the are Ilmarinen and ma Var of 6.8% for its property portfolio, and Ilmarinen a 6.0% 6.0% a investments. property direct its for Ilmarinen return and portfolio, property its for 6.8% of return total a reported Keva instance, For were strong. relatively returns property Also, investments. bond although for also, lower, and equity private for reported been have markets, -10 between and -20%. varied returns Positive have typically equity equities in listed on Returns decrease market. Finnish the the in especially of result a mainly are negative 2011. for returns Poor portfolios investment their reported on returns have institutions pension Finnish The services to other clients. clients. other to services management offer also might launched and funds have property unlisted companies These property portfolios. their investment manage to companies management for asset institutions, fund/ Some separate founded have Tapiola, and Pohjola management. instance, asset in-house of importance the emphasise tenant thus and their particular, in on interface, control retain to want Others providers. their large in-house outsourced traditionally units management to service have institutions Some pursued. are strategies differing some functions, management asset and of property for pension institutions’ “Year 2011 difficult was delivered strongreturns asset classes, property “Compared to other investments” in 2011”

The Finnish Property Market 2012 25 The Finnish Property Market 2012 26 the past few years, Sponda has expanded its business into into business its expanded has Sponda years, few past the in area Helsinki and metropolitan in other main cities. During logistics and In retail properties. Finland, Sponda’s are investments concentrated office, of consisting 2010) of end at the billion (€2.9 billion €3.2 of portfolio a with companies 30%. by -21% 2011, decreasing index during overall the with of change a as resulting Index overperformance, Sector however, showed, Investment Property OMX the Index, OMX markets. the by financial illustrated performance share global overall the to Compared the in turmoil the from suffered €1.7 at ca. billion. stood companies three of these value market combined 2011, the of end the At Technopolis. and Sponda Citycon, in Helsinki: Exchange Nordic OMX of the list main the on listed companies property recognised three only with small, remains sector property listed Finnish The sector Listed Sponda is the biggest of the Finnish listed property property listed Finnish the of biggest the is Sponda companies property listed of prices share the 2011, In below the targets, whereas life insurance and other other and insurance life whereas targets, the below companies allocations insurance current reported schemes Pension pension other and 12%. ca. of property allocation target a reported institutions the study, the In vehicles. property other or shares property listed in is invested proportion The small remaining non-domestic. are of and, ca. two-thirds these, investments, all property for ca. 18% of account currently funds investments. property Non-listed direct domestic are investments property majority, The portfolios. investment total their of 11% some representing billion, institutions’ property investments amount to ca. ca. to amount investments property The studied. institutions’ were institutions Finnish the of Universe strategies total Investor the INREV investment in by out 2011, property KTI the of carried the Study 74% In ca. universe. for investment account schemes pension The total Finnish institutional investment universe universe investment institutional ca. to Finnish amounts total The in property to allocation their increasing interested institutions pension Finnish The Finnishinstitutionalrealestateinvestmentuniverse 3.7 funds offunds) estate (including Non-listed real € € 15.9 billion, of institutions’ current current institutions’ of billion, 15.9 180 billion. Pension funds and other other and funds Pension billion. 180 estate 0.3 Listed real estate 0.2 Other real 15.9 (incl. jointventures) Direct realestate € 20 20 Non-domestic 2.4 would lead to an overall increase of almost almost of increase overall an to lead changes would these realised, If portfolios. investment their in total increase the to due and allocation target total their their increase to to exposure real likely estate by some 20% – both are by increasing institutions Finnish targets. their to overexposed slightly currently are companies insurance investments. leveraged and expertise management markets, new to access diversification, international is investment fund non-listed for motivation primary the The of market. domestic knowleddge in-depth and investments property of tradition long the by motivated mostly is investments property direct in emphasis strong institutions’ Finnish in both grow to expected abroad. and Finland are investments. investments non-listed to Indirect targeted be to total reported is in increase the some growth, total the Of from volume. investment rest the and allocations, in target increases from result would growth of this 40% Some investments. estate real institutional total the in investments so far. so investments any not has published company The million. €300 reach will capacity investment company’s new the total, In Petersburg. St and Moscow in investing company investing company new SRV,a development and investors institutional Finnish some with together 2011,In million. €594 launched, Sponda co-investor and/or manager of with funds a total GAV of some is unit, a business which currently management fund separate a also has Sponda billion. €224.6 to amounted investments At the regions. end of 2011, the of fair value Russian Sponda’s Petersburg St and Moscow the in operates it where Russia, Source: INREVInvestorUniverseFinlandSurvey2011 their portfolios in 2011” companies increased “All Finnish listed Domestic 17.7 € € 4 billion billion 4 1 billion 1 billion of business support services for their clients. clients. their for services support of business selection a wide Technopolisoffer also premises, to addition In development. under assets of worth million €61.7 had it 2010), in and million (€727 million €843 at stood completed properties of portfolio investment fair Technopolis’s the 2011, of of value end the At Estonia. and Russia Finland, sector. that in growth on focus astrong with and strategy business in new the properties concentration shopping emphasising centre a released Citycon 2011, early In countries. Baltic the in four and Sweden in nine Finland, in in one and Tallinn Of 35 22 Citycon’s Stockholm. are located shopping centres, in centre shopping one acquiring by 2011 of portfolio its end increased 2011, Citycon 2010). During the in (€2.4 at billion €2.5 some of portfolio a has It in and properties. retail shopping specialises centres Citycon organisations. organisations. companies, market VVO’s labour Finnish major some include owners. also insurance shareholders largest VVO’s pension are Ilmarinen, and largest Varma two Finland’s cities. Finnish larger in mainly locations, 45 in apartments residential subsidised portfolios. market major well as as portfolios, significant hold companies These Avara. and SATO VVO, estate: real residential in investing companies are major three There Finnish non-listed property companies property Non-listed OMX HelsinkiIndexandRealEstate-index(index,7/2000=100) property companies Share performanceof the Finnishlisted 100 200 300 400 500 600 0 Technopolis concentrates on technology centres in in centres technology on concentrates Technopolis VVO’s portfolio consists of ca. 39,000 rental residential residential rental 39,000 ca. of consists portfolio VVO’s 07-2000 01-2001 07-2001

01-2002 OMX HelsinkiRealEstate-index OMX HelsinkiIndex 07-2002 01-2003 07-2003 01-2004 07-2004 01-2005 07-2005 01-2006 07-2006 01-2007 07-2007 01-2008 07-2008 Source: NasdaqOMX 01-2009 07-2009 01-2010 07-2010 01-2011 07-2011 01-2012 listed property companies Market capitalisationsoftheFinnish 1000 1200 domestic specialised property investment companies. companies. investment property of specialised domestic example an is Estate Real HYY Wereldhave. and Polar IVG Genesta, include These organisation. existing an with have that a in or company Finnish Finland bought an office established investors foreign major some include property owners. biggest the as funds insurance pension and life Group’s Pohjola Avara’s OP and Fennia Also Pension with – cities. institutions Finnish major larger are shareholders the in concentrated apartments rental mainly 8,000 ca. manages and owns currently companies Suomi. insurance fund life well as as Ilmarinen, and Varma pension as such institutions, major 93 include owners main SATO’s million.. €80 has ca. of value total currently of with SATO construction, under 128 and apartments Petersburg, completed St In owner- for occupiers. sold be SATO to properties buildings, residential develops residential also rental of management development the and Besides 2011. of end the at ca at billion €1.9 stood portfolio investment the of value market The Petersburg. St in and cities Finnish major the in apartments 200 400 600 800 EUR million 0 Non-listed property companies investing in commercial commercial in investing companies property Non-listed Oy, Avara owner, property residential major third The 23,000 nearly comprise holdings current SATO’s ■ 2005200620072008200920102011 pna Ctcn Technopolis Sponda Citycon Source: NasdaqOMX

The Finnish Property Market 2012 27 The Finnish Property Market 2012 28

Photo: NCC / Sini Pennanen property funds for their clients as one alternative asset class. class. asset alternative one as clients their for funds offer property currently that management and banking investment of abroad. fund investing a funds as well as properties, Finnish in investing two funds manages Pohjola strategies. differing with funds four to Tapiola launched has investors. funds other and shareholders their offer They business. management fund the into have expanded also companies These companies. in separate management investment property their investors organised have that institutional Finnish traditional are Tapiola and company. Pohjola management investment global a is funds, Finnish three manages which Management, Asset Aberdeen areas. business the of one is investment property whom for is funds, property a originally Finnish private company equity major three manages which currently CapMan, significantly. strategies their affects also which backgrounds, divergent institutions. Finnish the for funds non-listed in investing for motivations main the domestic are investments, for property leveraged to as well view as management, specialist of third-party to point Access institutions. taxation from favourable a is structure which partnerships, limited as structured started. been have funds new 25 some Finnish major was by launched fund in CapMan first Since 2005. then, property The investors. institutional fund domestic Finnish significant 13 mainly for funds non-listed offering companies some management currently are There companies management fund estate Real ICECAPITAL, Auratum and of Evli examples are Finnish Auratum ICECAPITAL, have companies management fund property Finnish are funds property non-listed Finnish the of Most European Property Fund being the only newcomer in 2011. in newcomer only the being Fund Property European M&G PRUPIM’s with market, the entered investors foreign new five only however, 2009–2011, During years. both in market the entering investors new of dozens with 2007 and 2006 in level highest its at was Finland to capital foreign of inflow The market. property Finnish property the entered foreign investors 70 than more 2011, and 2003 Between investors International operation with their investors. investors. their with operation co- close in operate typically and organisations small companies relatively have management These Fund. Property PE and Capita Forum AB Investment, Property NV Exilion, include arrangements of kinds these of Examples purposes. specific for fund aproperty establish to forces join investors of a where number limited like arrangements or joint venture potential. redevelopment with properties office of acquisitions through recently portfolios its increased has Auratum 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. in residential specialised are funds estate real ICECAPITAL’s Many Many of the Finnish can funds be as considered club-deal- activity slowedactivity down “Foreign investors’“Foreign again in 2011” Photo: HYY Kiinteistöt / Kuvatoimisto Kuvio decreased by nearly 30%. 30%. nearly by decreased volume investment investors’ foreign the year, previous to the Compared transactions. this all of market, share quiet 25% a the represented In million. €450 ca. to amounted and Genesta Finland. in players significant also are NIAM Sveafastigheter, managers fund originated Swedish- portfolio. their in asset centre shopping major a have which of both Fund, Wereldhave Retail Nordic company Cornerstone’s and listed Dutch the significant include Other investors agreements. lease assets triple-net of long type with sale-and-leaseback in invested mainly has who Renting, Nordisk RBS is million, €900 ca of portfolio counterparts. Finnish their as acting Citycon and Sponda as such companies with representatives, as local co-investors Finnish have some whereas Genesta), Sveafastighteter, IVG, instance, (for Finland in offices own their established have of them Some practices. management and strategies varying properties. Finnish of billion €9 some hold currently investors foreign total, In In 2011, foreign investors’ total investment volume only only volume investment total investors’ 2011, In foreign total a with Finland, in investor foreign biggest The of form group investors a Foreign players with diversified including a major reform in the Finnish Army announced announced Army Finnish the in reform major operations, a and including administration state the of unit. Restructuring estate” real “corporate internal state’s the as strategy its strengthening currently is and Finance of Ministry the of the control under operates by Army. Senate the Finnish used prisons as and ministries, buildings, cultural well as properties and agencies state by used offices of consists portfolio a sqm with million 6 Finland, diversified Its in billion. €4.6 owner some of sheet balance property largest the far by is Senate authorities. state by needed longer no properties the and let the It holdings. state’s also property sells or redevelops manage develop, to is task whose Properties, Senate called enterprise government-owned a in holdings property its of most concentrated has state Finnish The market. property Public sector entities are very players important in the Finnish sector Public are newly built, in the Helsinki metropolitan area. area. metropolitan Helsinki the in built, newly are which of many buildings, office single in invested typically who funds, of German consisted group major investor Other acquired worth Finnish more than properties €150 million 2011.during transactions, several in who, Sveafastigheter, by The most significant investments in 2011 were done done were 2011 in investments significant most The

The Finnish Property Market 2012 29 The Finnish Property Market 2012 30 finance market has enabled the execution of these strategies. strategies. of these execution the enabled has market finance and investment property the of development and broadening The management. estate real their to regard with strategies Europe. throughout below 60% and somewhere is thus close to found the average be to estimated currently is owner-occupancy of proportion The owner-occupied. been traditionally has commercial stock of property majority The portfolios. property large of ownership their through market property Finnish the in role significant a played have occupiers property Traditionally, Corporations ofproperties. management and on the need have an impact also will strategies provision potential future, the service and/or In structure in the municipal changes significant situation. financial tight due the challenges to considerable facing ownership are property management and Municipalities’ occupiers. the from rents internal charging by instance, for policy; management market-oriented a apply to tend and functions management years. recent in municipalities most estate in development considerable Real through gone has management players. market private to lets it that space of amount significant have also particular, in Helsinki, of City 90% of all they premises use. such Some as municipalities, the own some It they currently is estimated buildings. as cultural well as centres, healthcare and nurseries schools, offices, as properties of majority for and required provision, the public such service administration own and markets regional in players significant highly typically are Finnish municipalities state the third. remaining the owning with companies, these of shares the two-third’s of a majority (University own Universities Finland ltd). Finland in of Properties elsewhere one and Properties), University Aalto and Properties University (Helsinki area in and buildings manage the university Helsinki metropolitan own companies the of Two buildings. university managing and owning of purpose sole which the for 2010 companies, in founded limited were three by owned currently are years. few coming the in properties Senate for challenges increasing create will 2012, early in Major Finnish corporations have adopted different different adopted have corporations Finnish Major estate real their have centralised major All municipalities properties university Finnish the of majority The property managementproperty facing increasing “Public sector’s“Public challenges” financial issues. issues. financial and ownership for preferences the impacts also approach of kind This market. to office the led in development new has abundant which issues, environmental with along occupier view, and efficiency space globally. emphasise strategies strategies These these executing increasingly also are IT/ and companies International strategies. workplace increasingly media sophisticated pursuing services, are companies, professional telecommunication as such space, 2012. in area & Young same the in Ernst and KPMG for projects office start will and Helsinki, downtown of area Töölönlahti the in Media Alma company media for company headquarters new a developing insurance currently is Etera pension and 2011, in Insurance Life Nordea by completed was Silja Tallink of office head new a instance, For investors. by developed typically are offices head ownership investments, new In applied. are varied strategies finance and more properties, office For properties. market. retail the in landlords significant also are They investors. other from balance premises rent also but sheets, their in portfolios property significant hold They both strategy. business their in development property of role the emphasise and market in property the players active 2011. early in Renting Nordisk from sale-and- the the property of and purchased of its office, deal head leaseback option break a pursued Plc Pöyry hand, other the On of deals. kind in this unsecurity increase might agreements of rental principles in accounting changes future potential also situation, market Together the with tightening out. carried were transactions sale-and-leaseback no 2011,significant During leases. long relatively through buildings these in tenants as remained companies the cases, many In properties. of worth €1.0 billion approximately sold total, in Companies using dominantly office or light production production light or office dominantly using Companies own their production typically still companies Industrial are chains, retail Finnish major two the Kesko, and SOK have, corporations Finnish years, five past the During

Photo: Skanska / Pauliina Munukka also a significant player in the services market and has some some has and market services the in player significant a also selected in Oy. investors isRealco segments institutional some domestic servicing small player Another clients. as investors domestic major institutional some has It services. leasing offers also it although management, technical and property in specialises area. metropolitan Kiinteistöjohto, in the Helsinki park properties who business mainly manages KJ and management, centre shopping in some niche market are segments who Realprojekti, specialises investment and services. management asset offering provider service another is Oy. Advice Newsec and Oy Valuation three Oy, Asset Management companies: Newsec separate into Newsec activities its investors organised has property It corporations. international and and domestic services both valuation for and of advisory spectrum management, wide estate a real offers Newsec property sector. and asset management the in player major another is group, services. advisory and valuation offers also property Management Realia commercial management. into services its expanded recently has company The investors. property residential private for property services management offers as residential well as portfolios, residential owner-occupied investors’ major some manages also It market. the management in player sqm. 10 million than more to manages company the of and amount increased management space the residential property in foothold Ovenia’s strengthened transaction a acquired Oy. The Arenna company management Ovenia property 2011,residential late In corporations. as well investors, as international Oy’s and Finnish Ovenia major Management. include clients Realia and Ovenia include companies major service management The property and asset companies. Finnish international by and offered domestic are both services management property and Asset services management property and Asset players. of new entry market as well as strategies, management different of adoption the enabling thus available, and are services transaction brokerage advisory, management, of variety Currently, wide decade. a past the during development rapid of a phase undergone has sector service estate real Finnish The sector 4.2 service estate Real YIT, one of Finland’s largest construction companies, is companies, construction largest Finland’s of one YIT, that company management Finnish a is Oy Corbel on concentrating companies management of Examples Group, Catella the of part Management, Asset Amplion Stronghold- Swedish-originated the of part Newsec, major a is Group, Realia of part Management, Realia on transactions. In property valuatios, Peltola & co is an an is provider. co service specialised & ofalocal example Peltola valuatios, property In transactions. on concentrates which Oy, Finadvice is provider service local Another Oy. Tuloskiinteistöt company service leasing and transaction local a with agreement collaboration a through Swedish-originated Finland. in Tenzing offices have and the Leimdörfer advisors Also Oy. Premises NAI through Finland in represented is Global NAI services. management collaboration well as project as brokerage, leasing and transaction offering through office Finnish local a has represented International Colliers agreements. been previously having 2010, in Helsinki in office own its established Ellis Richard CB brokerage. and consultancy leasing valuation, transactions, in players major the of one become to grown since market the 2004. entered Jones Lang market LaSalle in and 2007 has Finnish the in present been has and market, the enter to major first the among the was DTZ Of firms, market. international in property services commercial brokerage Finnish the and advisory valuation, in player services. transaction and advisory valuation, offer also Management Realia and global big Newsec companies, and management major the Of firms companies. entrepreneurial domestic small mixture of colourful a includes market service advisory The services transaction and Advisory, valuation a separate real estate unit in Finland. Moreover, global global Moreover, Finland. in unit estate real separate a Real established Finance Corporate Aventum 2011,Enskilda In SEB Estate. and Finance Corporate Advium including companies, domestic some by offered are services finance corporate firms, services In to addition transaction the actual only concentrating on services management. management. services on concentrating only Service Coor SOL. on the is hand, other Management, an and of example a company Tikanoja & Lassila ISS, include services management offering also in currently maintenance) background and catering with cleaning, as (such provision service companies traditional Service chain. whole service the offer to expanded have that companies service traditional and companies management specialist both by area. this in internationally is expanding also It management. technical and property in clients major Cushman and Wakefield is represented in the market market the in represented is Wakefield and Cushman major a is Group Property Catella Swedish-originated Facilities management services to occupiers are offered offered are occupiers to services management Facilities “A colourful mixture of “A mixture colourful the specialist services companies operate in market”

The Finnish Property Market 2012 31 The Finnish Property Market 2012 32 Property development Property conditions. market changed the to adaptation to of require values The are expected these assets challenges. more face to expected is portfolios and assets non-core of refinancing However, past. the in than lower significantly are ratios loan-to-value the though even problems, any face to expected investors, therefore, not, is equity assets core of find refinancing and to easier also is it assets, these For investors. solvent and cash-flow stable with assets core in tend to In lenders market conditions, concentrate the current years. few next the in billion €6–7 around be to estimated and significant, is terminations approaching debt estate real terminating of amount total the However, years. across distributed evenly more markets, to other many compared are, debt the of terminations the Therefore, periods. loan long rather applied particular, in banks, local also in the Finnish market. In the early years of increasing debt, topic discussed a widely become has debt of this refinancing and Due 2008. to the recent changes in market circumstances, 2005 between markedly increased investments estate real in Bank. Aareal and Hessen-Thüringen) (Landesbank Helaba Banking, Merchant SEB include market estate real offices. local their closed have others, among Nordbank, HSH and Eurohypo markedly. 2008, downsize to in had have crisis newcomers these of financial some the of start the since However, lenders. estate real specialised foreign some attracted also OP-Pohjola Bank, the the market peak, market Nordea During Bank. and Sampo Group including banks, local the major by provided is financing estate real of part major The services Financing Finland. in services specific estate real offer also PricewaterhouseCoopers, and Young & Ernst KPMG, as such firms, consultancy business a separate arm that specialises in commercial property property development, new commercial in players active in are They development. specialises that arm separate a have typically who companies construction by is dominated market development property commercial Finnish The As in most European markets, the use of debt financing financing debt of use the markets, European most in As the Finnish the in active currently players International billion of estate real debt approaching “Some €6–7 €6–7 “Some termination” strategy. strategy. their in development property include funds property some Additionally, premises. industrial old of redevelopment on concentrates which Renor, is example One markets. niche in development their in active property and companies funds property non-listed their smaller some in also are included There strategies. countries other in and Finland areas in core both own their in development active property are in players Technopolis and own their Citycon to Sponda, assets portfolios. increasing on focus that developers risky. less is considered which development, residential in strategies active more slightly pursue typically Institutions for properties. look vacant for uses new instance, for can, they where portfolios, their in of the assets the emphasise redevelopment existing strategies development Their pre-let. are premises the of majority the when project the enter only typically property They development. commercial concerning strategies conservative to revenues tax bring they municipalities. and because employment issues increase planning both in authorities local power with bargaining strong have property typically professional They and developers. significant are – Kesko, particular and in SOK retailers large – owner-occupiers Some in the Helsinki metropolitan area and other major cities. major other and area metropolitan Helsinki the in especially as an active developer of its business park concepts known is Development Property NCC develops. it buildings also as remain investor in the circumstances, can, certain under which Nordic, Development Property Commercial Skanska through developmentits organised Nordics theinoperations has Skanska investors. international and domestic both with co-operated have and all years recent in field have this in active been companies These Peab. and SRV Lemminkäinen, Hartela, YIT, Skanska, NCC, include development property mostly is owners. their by handled buildings existing of development the whereas Finnish property investment companies are also active active also are companies investment property Finnish quite have traditionally investors Institutional Major construction companies involved in commercial commercial in involved companies construction Major property developmentproperty companies dominate “Construction “Construction markets” Sponda, who acquired the Fennia-block in the Helsinki Helsinki the in in for late €122ca. April centre major single million. Another Fennia-block the acquired who Sponda, million. €390 to increased volume quarterly the and year-end, the before just finalised were transactions some when quarter, last the active more summer. followed quiet, by was very again the a slightly third quarter The after crisis quickly debt sentiment market European the the changed of acceleration the However, quarter. second the in recorded was million, €820 volume, transaction highest year’s the quarter, first slow a After situation. this change to thought were demand for increasing expectations strong but percpective, pricing from meet not did demand and supply of supply this kind in of assets, the assets In market. non-core low the was increasing from reason volumes transaction only preventing at the where locations, targeting good in mainly properties core were Investors market. property investment the for outlook the to regard with positive very 2011 2010. in of30% level its in from 25% ca. to decreased transactions all of investors of foreign share The billion. €2.4 to amounted which figure, year’s previous the to compared decrease clear a represents in low very 2011, €1.8 of only in 2011. volume billion remained total the with This transactions major of volume The 4.3 Property investment market in 2012 The biggest single transaction in 2011 was made by by made was 2011 in transaction single biggest The were players market 2011, of half first the During crisis turned thecrisis market turned “The European debt European “The sentiment negative” Transactions volumeintheFinnishproperty market 1000 MEUR 0 1 2 3 4 5 6 7 8 01 02 03 0420 20 0720 20 2010 2011 2009 2008 2007 2006 2004 2005 2003 2002 2001 international buyer ■ domesticbuyerinternational properties. properties. Union office and developed newly in invested mainly Management who Investment, Asset IVG SEB Estate, Real Funds, Catella Institutional including funds, Finland German in investments was its increasing group investor one 2011, In year. the throughout partners its several with in transactions million €150–200 some invested total, in who, million. The most active investor in 2011 was Sveafastigheter, €85 of price a for fund Exilion’s by Helsinki Ruoholahti, in Tower Sitra so-called the of acquisition the was transaction Finnish property market(quarterly) Transactions volumeinthe 1000 MEUR 0,0 0,5 1,0 1,5 2,0 2,5

08/Q1 08/Q2 started quietlystarted in the transactions market” 08/Q3 08/Q4 “Year 2012 has

09/Q1 09/Q2 09/Q3 09/Q4

Source: KTI 10/Q1 10/Q2 10/Q3 10/Q4

11/Q1 11/Q2 Source: KTI 11/Q3 11/Q4

The Finnish Property Market 2012 33 The Finnish Property Market 2012 34 Finnish cities Prime office yieldsinmajor indicating a 5.75% yield for a prime office property in the the in property office prime a for yield 5.75% a indicating October in 2011, out were well carried in line with the Barometer, few published yield quotations, Property the KTI-RAKLI of results The properties. non-core and core between gaps yield increasing by characterised properties, prime on focus investors’ to due still, is market The transactions. few very on published been only has information this as opaque, mid-February. by few with a a transactions, total volume of only ca. 200 million, published with quietly started again, has, 2012 year The 10 % 4 6 8 In the quiet market, the yield levels have remained remained have levels yield the market, quiet the In

autumn 1995 Jyväskylä Tampere Oulu Vantaa Espoo Turku Helsinki

autumn 1996

autumn 1997

autumn 1998

autumn 1999

autumn 2000

autumn 2001

autumn 2002

autumn 2003 Source: RAKLI-KTIbarometersurvey autumn 2004

autumn 2005

autumn 2006

autumn 2007

autumn 2008

autumn 2009

autumn 2010

autumn 2011

(autumn 2012) 2001-2011 Total returns byproperty sector by increasing divergence between property sectors. property between divergence increasing by characterised was return total The -0.2%. of growth capital negative slightly and of 6.2% income of net consisted return Total 2011. in 6.0% to amounted market property Finnish year. next the within increase to expected opaqueness, also were and and divergence greater showed areas other market all in yields However, future. near the in also levels yield stable show and attractiveness its retain to expected also was centre Helsinki district. business central Helsinki 10 15 20 % 0 5 Measured by the KTI Index, the total return on the the on return total the Index, KTI the by Measured 2001 200220032004 2005 20062007 2008200920102011 nutil Residential Office Industrial All property eal Retail Source: KTIIndex

Photo: NCC / Sini Pennanen area office market. market. office area metropolitan Helsinki the for problem major a remain rates high by vacancy caused the challenges turbulence, economic as well as stock, in increase to due However, space. office redeveloped or newly of completions through years in recent significantly increased has region Helsinki Office the in size. stock same the of centres European other many in than greater is market property commercial and economy Finnish the in which of dominance the area, metropolitan Helsinki the in located is metres square million more eight this, than Of cities metres. major square million 11 Finland’s some in to amounts space office of stock total The Stock 5.1 market office The structure practices and market – sectors Property 5. Main office areas in the Helsinki metropolitan area metropolitan Helsinki the in areas office Main office premises in business parks, in particular, has been been has particular, in parks, business in of supply premises The office area. connections, metropolitan traffic Helsinki the good in mainly near located properties type business-park- is category office third The investors. with together developed typically are offices development, new of case the in and, investors, to properties headquarter their sold have any companies several case years, recent the the During more. necessarily not typically is this were but properties owner-occupied, headquarter past, the In area. metropolitan Helsinki the in areas other some in and (CBD) district business central Helsinki the in both found be can These headquarters. company by typically used buildings is single-tenant category second The areas. office recognised and centres city in located typically buildings, office tenant Helsinki the in located area. metropolitan is this of 80% Almost database. for total the Index, of 36% some KTI represent currently the offices example, In portfolios. property Finnish in role institutional dominant a played typically have Offices Players The largest proportion of stock is office proportion investable The largest multi-

The Finnish Property Market 2012 35 The Finnish Property Market 2012 36 between €2.50 and €3.50 per square metre, depending on on depending metre, square per €3.50 and €2.50 between thus tenants, savings. cost for to separately motivation tenants’ and rents of charged transparency the increasing be also can costs Operating investor. the by carried is risk cost the as crucial, is management property effective of kinds these agreements, and companies In some in pension funds, property particular. as such players, market active by favoured are These rents. sub-categories. office different between significantly differ agreements rental of terms The varied. are market office the in practices Rental practices Rental Management. Asset Union SEB and Investment Catella Funds, Institutional IVG Sveafastigheter, Hansainvest, Estate, included Real 2011 in transactions office in involved investors Foreign funds). Aberdeen’s and Exilion’s CapMan’s, example, (for funds domestic non-listed specialised as well as Technopolis, and Sponda companies such as Finnish Varma, and institutions Ilmarinen Keva, listed strategies. focused more have to tend their funds and in companies property types whereas office portfolios, three all hold typically institutions Domestic appetite. investment solid and demand occupier strong both to due years recent in rapidly quite increasing Typical operating costs for office properties vary vary properties office for costs operating Typical gross typically are rents buildings, office In multi-tenant large include sector office the in investors biggest The “German funds invested funds “German in Finnish in offices Commercial property stock,31.12.2010 Helsinki Metropolitan Area Helsinki Metropolitan 2011” Jyväskylä Tampere Helsinki Vantaa Kuopio Espoo Turku Lahti Oulu 0 1 Office ■Industrialandwarehouse ■ RetailOffice 2 3 4 in Helsinki, the airport area in Vantaa and Leppävaara in in Leppävaara and Vantaa in area airport the Helsinki, in the to Ruoholahti include areas addition office well-performing other In CBD, CBD. Helsinki in locate is to it important companies, and businesses many for as, fluctuations, market to insensitive relatively and stable is demand rental area, market limited this In performance. strong shown has market office CBD Helsinki the uncertainty, economic the to due demand softening the Despite differently. somewhat perform submarkets office different market, current the In market 2012 in office The Index. Index. years. five to for three term a fixed normally are agreements Rental usage. actual the on based be can which charge, a service plus separate rent fixed a of consist typically facilities. rents security, park meeting Business and reception, services as postal catering, such cleaning, services, comprise business options Service typical supply. service extensive and 15 and years. five between varying lengths lease with deals, sale-and-leaseback in applied typically also are agreements of kinds These applied. commonly are rents net agreements, these In years. 20 and ten between long, quite usually are terms the buildings, single-tenant In occupier. certain a of needs the for developed often are which units, 12 or months. six three, be might which period, both notice agreed the within agreement, contract the of terminate can kind parties this In buildings. office tenant flow. cash gross the of proportion significant a represent might of the As building. such, the they and location characteristics Office rents are typically linked to the Cost of Living Living of Cost the to linked typically are rents Office agreements flexible offering by compete parks Business office larger in applied commonly are terms lease Fixed multi- in applied commonly are terms lease Indefinite 5 6 7 Source: StatisticsFinland 8 million sqm 9 10 problem. Premises are being redeveloped, alternative uses for for uses alternative redeveloped, being are Premises problem. this control to executed being are means various and market remain the most serious challenge faced by the Finnish property increase into again. High turn office vacancies to in the Helsinki metropolitan area expected are vacancies demand, to Due softening 70%. ca. to amount only database rental KTI the in rates occupancy the Lauttasaari, and Pitäjänmäki example for remains very moderate in the CBD, wheras in some other areas, In Espoo, it remained as low as 80%. In Helsinki, vacancy rate ofFinland. are, There however, big differences between areas. 2011all late for in 89% ca. at stood portfolios investors’ major clients. demanding of increasingly needs the to respond not do that buildings in especially decrease, to rents for pressures continuing are there hand, other the on areas, secondary In CBD. Helsinki for 4.1% of growth annual an showing index during rental KTI the with year, increased past the have rents prime areas, these In Espoo. In KTI’s database, the occupancy rate of office premises in in premises office of rate occupancy the database, KTI’s In Total returns byproperty sector2011 All Property 6,0% All Property Residential 9,2% Industrial 5,8% Offices 3,5% Offices December 2011,rentable area*, sqm Office projects underconstructionin Retail 7,1% 100 000 sqm 20 000 40 000 60 000 80 000 0 area has been estimated based on gross area information. area hasbeenestimated basedongross area hasn’tbeenavailable, rentable area onrentable * Ifinformation -3 Income return ■Incomereturn ■ CapitalGrowth Epo Helsinki Vantaa Espoo -2 -2,3 -2,0 -1 -0,2 0,7 0 1 affect the balance markedly. markedly. balance the affect may completions building or tenants major single even area, metropolitan the Helsinki outside However, in markets most levels. moderate at mainly remain rates vacancy and stable areas office in remain rents major cities office Prime two centres. city outside or one and centres city in concentrated typically are offices region, Helsinki the of outside cities In plots. land the for use better find to order in demolished being are buildings extreme office in cases, and, explored, being are buildings office vacant 3,6 2 5,4 7,9 6,4 5,9 6,2 Source: KTI,RPTDocuOy 3 Helsinki Metropolitan 4 rate remains high in “Office vacancy vacancy “Office 5 6 Source: KTIIndex Area” 7 8 %

The Finnish Property Market 2012 37 The Finnish Property Market 2012 38

Photo: IVG Polar and decrease in gross revenue. gross in decrease and costs in increase the both to due clearly, decreased income net Also, decreased. offices of values capital the when consecutive year fourth the was This -2.3%. of growth capital in 2010). of consisted This net income of 5.9% and a negative years, security. on focus investors’ previous reflecting partly to compared 2011 and 2010 in markedly some increased has share represented Their 2011. in transactions offices all of 37% markets, investment quiet In projects in Tampere and two redevelopment projects in in projects Turku. redevelopment two and Tampere in projects ongoing three to limited is construction other office In new cities, further. rate vacancy the increase to expected is in stock increase The projects. and extension redevelopment in rest the and buildings, new of was sqm 180,000 some which construction, under offices of sqm 225,000 were there 2008, in experienced of At end 2011,the completed. was sqm 250,000 was some when peak The area. metropolitan Helsinki the in completed was space office refurbished or Total returns for offices decreased to Total for 3.5% decreased offices in returns 2011 (4.7% During the past five years, some 740,000 sqm of new new of sqm 740,000 some years, five past the During “Significant differences “Significant differences of officemarkets in in the performance different areas” costs, driven by energy and labour prices, respectively. prices, labour and service energy by driven as costs, well as costs, energy in pronounced most been has the increase categories, cost Of the inflation. operational The exceeded clearly constantly has costs situation. in operational increase market tight to due possible be not might increases rental where sector, office the in critical most is pressure The income. net investors’ on pressures increased has costs operational in increase years, few past the During 2001-2011 Total returns onoffice investments, Helsinki metropolitan area Office gross take-up,sqm 10 12 14 % -4 -2 100 000 150 000 200 000 250 000 0 2 4 6 8 sqm 50 000

1998 Total return 0 1999

9/05-2/06 Helsinki 2000

2001 3/06-8/06 Capital growth 2002 9/06-2/07 Espoo

2003 3/07-8/07

2004 9/07-2/08 Vantaa

2005 3/08-8/08 Income return 2006 9/08-2/09 HMA total 2007 3/09-8/09

2008 9/09-2/10 Source: KTIIndex 2009 3/10-8/10

2010 Source: KTI 9/10-2/11 2011 3/11-8/11 the Helsinki CBD in the Finnish context. Finnish the in CBD Helsinki the of position undisputable the and offices for the demand by strong explained partly are centre city the smooth in Relatively fluctuations CBD. Helsinki the in especially rents, LaSalle. Lang Jones to for Stockholm, was instance, the 1.25%, In difference according percentages. 0.8 to amounted only Barometer Property KTI-RAKLI the in offices CBD Helsinki for quotation yield yield stable the past between five highest years, and the the lowest difference During more peers. European shows its of most than market development office Helsinki The and Helsinki capitals European other in yields and rents Office in Helsinkimetropolitan area Operational costsofoffice properties 10 20 30 40 50 60 % 0 The relative stability is also apparent in market market in apparent also is stability relative The

2000 rent) Operational costs(excl.ground andrepairs) rent Operational costs(excl.ground

2001

2002

Prime office rents, Q4/2011 2003 Copenhagen

Amsterdam 2004 Stockholm Budapest Brussels Moscow Helsinki Warsaw London Madrid Dublin Berlin Milan Paris

Oslo 2005

0 2006 Source: KTI,StatisticsFinland Cost ofLivingIndex 2007

300 2008

2009

2010 600 the transactions volume of offices exceeded that of retail retail of properties. that exceeded offices of volume transactions the However, in 2010 and 2011, 2006–2009. in volume the years transaction the biggest market, representing the transactions in sector popular a been also has Retail 2009. and 2008 in except year delivered every offices also to compared has returns total sector higher retail decade, past the rents. prime During of terms in especially years, recent in strong 2010. in sales retail 13.8% some oftotal represented sales Their sqm. 1.49million ca. of area leasable total a with are 74there for Shopping Centers, Council shopping centres Finnish the to According area. cities metropolitan Helsinki the in Finnish major in located is half almost space this, Of sqm. million 7 ca. to retail amounts of stock total The Stock market 5.2 retail The Development ofprimeoffice yields 900 0 1 2 3 4 5 6 7 8 % odn ai tchl Hlik Oslo London ParisStockholmHelsinki The performance of retail sector has been relatively relatively been has sector retail of performance The ■ Q4/2009Q220102011 ■ Q2/2007Q420082009 Source: JonesLangLaSalle,KTI(Helsinki) 1200 1500 Source: JonesLangLaSalle,KTI(Helsinki) e/sqm/year

The Finnish Property Market 2012 39 The Finnish Property Market 2012 40 Center Finland in TOP 10 centres Shopping GIC and Estate Real Cornerstone Investors, Global CBRE Rodamco-Unibail, Wereldhave, as such investors, foreign owner-occupiers. and company property fund, foreign pension domestic a of consisting group a by owned is Vantaa in centre shopping Jumbo the while – Etera and Fennia Pension Keva, – institutions pension three by jointly owned is Espoo in centre shopping Sello the example, For centres. in bigger investors other with investments joint into of cities Tornio also Pension enter often funds and Hyvinkää. the in centres shopping new in invested years recent in has Varma example, For development. the of phases early quite in invest typically typically they which whole,in centres shopping regional, own institutions pension Finnish Some owns 23 who Citycon, currently in shopping centres Finland. investment. and development property in retail players major also are S-Group, and Kesko retailers, Finnish major two The properties. retail smaller or centres shopping in either retail, in concentrated also have investors retail, in international Some group. this in specialising biggest the being Citycon players major some portfolios. also are investment There fund pension in Index, represented KTI well typically the is Retail in database. the of sector 22% some biggest representing second the is Retail Players JUMBO IDEAPARK SELLO ITÄKESKUS KARISMA KAMPPI TRIO HANSA MYLLY OMENA ISO the market. market. the in absorbed well been however, out-of-town has, supply in New locations. and centres city in have both developed, properties been supermarket and hypermarket centres, as shopping well major as Both 2000s. of decade first the The Finnish shopping centre market has also attracted attracted also has market centre shopping Finnish The by dominated is market centre shopping Finnish The The retail space stock increased in all major during cities increased stock space retail The GLA Retail 144 115 000 85 48 500 500 48 600 34 688 36 500 33 849 45 97 900 34 079 34 91 71291 Owners Main investors Private Fennia Pension Etera, KEVA, Ltd Finland Wereldhave Plc Kesko HOK-Elanto, Fennia, Pension Unibail-Rodamco, Ltd Ruokakesko Fund Retail Nordic Cornerstone Päijät-Häme of bank Co-operative Plc, Citycon companies property fund, non-profit institutions, owners: Several Ltd Mylly Kauppakeskus GIC Plc, Citycon although it has announced that, in the future, it will will it future, the in centres. shopping on that, increasingly concentrate announced has it although properties, retail smaller in player major a also is Citycon of in 2006–2009. investors Portfolios foreign attracted units retail smaller buildings. supermarket owners and major hypermarket remain of particular, in Kesko, and S-Group operators, Retail recently. investors foreign attracted also has sector This flow. cash the secure and to leases long due typically institutions Finnish by favoured traditionally locations. prime in space retail class high- modern the by attracted market, Finnish the entered have chains retail international new several years, few past the During facilities. parking the in increase an through and areas, pedestrian of extension supply, space the through to facelifts increased been has centres city of attractiveness the cities, regional many In with centres. shopping consumers out-of-town for compete typically shops owners. street retail High significant also are Ilmarinen, as and such Sponda investors, office major result, a as and, buildings, Lahti. in center Karisma sqm 33,500 ofthe completion the through increased supply center 2011, shopping the During and schemes. development properties major shopping centre and some ones larger in other Also, owns cities. Sponda some in area the Helsinki centres in smaller concentrating centres, shopping in invested also have CapMan, and Aberdeen by such as funds, those Real property managed Estate. Domestic Hypermarket and supermarket investments are are investments supermarket and Hypermarket office CBD in located typically are shops street High Source: Finnish Council of Shopping Centres Shopping of Council Finnish Source: Location LEMPÄÄLÄ ESPOO HELSINKI VANTAA LAHTI HELSINKI LAHTI TURKU RAISIO ESPOO in the retail property markets. markets. property retail the in also the outlook affect probably will This sector. in the retail jobs of number and sales retail both for zero expected is or growth low very year, this For confidence. consumer the in reflected also was outlook economic worsening the end, year- the towards year,but the of half first the in sales retail supported confidence consumer Strong 5.3%. to amounting growth the 2011,with in increasing continued sales Retail market 2012 in retail The centres. shopping in increasing gradually is leases turnover of use The leases. applied in leases. Other shorter tenants have shorter typically five to ten and even 15 years, with options renewal sometimes rent. net with contracts long-term relatively typically are agreements and driven, cash-flow increasingly street high in especially. shops applied typically are terms of kinds These period. time infinite an for continued then are and period fixed a for made first are agreements cases, many In years. agreements. with this ensure to want tenants and market, the as is location retail a key in factor trade, the retail applied in more commonly are terms Fixed market. the office tenants. and investors the significantly vary of preferences the and unit market retail of type both to retail according the in practices Rental practices Rental In shopping centres, anchor tenants often have leases of leases have often tenants anchor centres, shopping In In investors are and properties, hypermarket supermarket three is space retail for term fixed minimum typical The in than retail in longer normally are agreements Rental Prime retail rent intheHelsinkiCBD eur/sqm/month 100 110 120 130 40 50 60 70 80 90

spring 1995 autumn 1995 spring 1996 autumn 1996 spring 1997 autumn 1997 spring 1998 autumn 1998 spring 1999 autumn 1999 spring 2000 autumn 2000 spring 2001 autumn 2001 spring 2002 autumn 2002 spring 2003 autumn 2003 spring 2004 autumn 2004 retail centres in Kuopio, shopping centre Willa in Hyvinkää, Willa in in Hyvinkää, centre shopping Kuopio, centres retail Ikano and Ikea include projects development retail ongoing significant the most area, areas. metropolitan the Helsinki Outside station metro new the in mainly Espoo, in being planned projects major several are there However, projects. redevelopment few at limited currently is area metropolitan Kouvola. and Tampere in centres Prisma as well as Jyväskylä, phase in second Palokankeskus of the Mikkeli, in Stella and Lahti in Karisma centres shopping include 2011 in completed projects retail 2011. autumn in centres shopping area metropolitan at rents stood €102 / sqm for CBD, and €70 / sqm for Helsinki of retail In upper quartiles locations. the database, rental KTI centers, shopping best the in best especially increasing, continued the have rents retail in and CBD the In markets. retail the in position strong CBD’s the increase further will centres of these uplifts The project. Center City of Sponda’s redevelopment the as well as centre, Kluuvi of phase second the of completions the by further increase will supply space retail the 2012, In market. Finnish new the enter to chains attract retail to able were centres Both completed. were Galleria – Kämp and Kluuvi of those – centres shopping of refurbishments 2011, major late In two markets. retail the in also performance strong very shown has CBD Helsinki The spring 2005 autumn 2005 spring 2006 Helsinki the in space retail new of Construction major the area, metropolitan Helsinki the Outside autumn 2006 Source: RAKLI-KTIbarometersurvey spring 2007 autumn 2007 spring 2008 “ properties remainproperties low autumn 2008 Vacancy rates for retail spring 2009 autumn 2009 spring 2010 autumn 2010 spring 2011 autumn 2011 (autumn 2012) ”

The Finnish Property Market 2012 41 The Finnish Property Market 2012 42 person households, and another 33% consists of only two two only of consists 33% another and households, person single are households Finnish 41% the of Some persons. 2.1 currently is and constantly decreased has household Finnish a of size average The buildings. apartment in are dwellings the of 44% than More homes. single-family are 40% about these, Of Finland. in dwellings million 2.5 some are There Stock sector 5.3 residential Rental at 6.4%. year, stood and previous the to compared clearly decreased income Net 0.69%. at positive slightly up ended 7.1%, growth to capital the amounted where sector retail on In than 2011,those types. of other main property total return volatility greater shown in yields, fluctuations to greater due 2012. in completed be all will which Kouvola, in Veturi centre shopping as well as 2001-2011 Total return onretail investments, 10 12 14 16 % -4 -2 0 2 4 6 8 n eet er, h rtrs n eal rpris have, properties retail on returns the years, recent In

2001 Total return

2002

2003 Capital growth 2004

2005

2006 Income return 2007

2008

2009 Source: KTIIndex

2010

2011 billion in the end of2011. end the in billion €80 almost to 2002 in billion €27 ca from decade, past the during rapidly increased has mortgages housing of amount The hand. other the on housing, owner-occupied in rates mortgage low relatively the and hand, one on population, the illustrates emphasis of rental housing among lower income This dwellings. in rented living 27%, for households greater, amounts to 14% of the total income. The share is significantly publicthrough housing support. subsidised be also Tenants may applied. are rents market where pure approach market-oriented more a allow subsidies of forms other whereas regulated, are rents and selection for tenant rules strict specific have Some forms. different between and terms regulation of The different types of housing. public subsidy rental vary significantly of development for subsidy interest an or loans state-guaranteed as such subsidy, public of kind some with provided been have 50% ca. apartments, Of these apartments. rental are some There 750,000–800,000 In total, 29% of the Finnish households live in rented dwellings. and terraced houses. The share of home ownership has has ownership home steadily. of increased share The houses. terraced and detached as well as apartments including housing, of forms all in widespread is ownership home and homes, occupied locations. urban in especially steadily, has increased dwellings smaller for demand the Therefore, persons. The average housing cost of a Finnish household household Finnish a of cost housing average The Some 68% of Finland’s housing stock consists of owner- of consists stock housing Finland’s of 68% Some decrease in thedecrease average residential dwellings increase to due the “Demand for“Demand small household size”

Photo: NCC / Sini Pennanen Photo: SATO / Antonin Halas ins rsdnil akt n 08 we W-sno, a WH-Asunnot, when 2008, in market residential Finnish the entered investor foreign first The portfolios. residential to related issues management some as well as investments, residential for yields low the both by slowed been has entry market their However, years. recent in increased has market investors. as institutions have domestic typically funds These instance. including investment, and Tapiolamanaged by funds ICECAPITAL, Real Estate, for property residential in specialised residential to exposure indirect investment. significant a thus and have Avara, and also Sato VVO, of shares the of significant owners also are Fennia Pension and Ilmarinen as Varma, such funds pension rental Large portfolios. their 3,000–4,000 in dwellings some have and all Keva instance, Ilmarinen, for Tapiola, Varma, markets. residential rental and levels ofplayers. professionalism rental practices, market in differences great results in and markets rental the affects ownership scattered The dwellings. 150,000 some of consists currently market investment residential professional The so-called individuals. mainly investors, small by owned is market residential rental as such citizens. senior or students groups, special some at targeted is stock housing subsidised the of 15% segment Some Avara. and this Sato VVO, include in players significant most The companies. non-profit private, The by owned is stock apartments. subsidised the of 43,000 rest ca. with segment this in player biggest the is Helsinki of City The municipalities. Finnish the by owned is stock housing subsidised the of 60% Some Players Foreign investor interest in the Finnish residential residential Finnish the in interest investor Foreign funds property non-listed some also currently is There the in also players significant are funds pension Many free non-subsidised the of 60%, some majority, The Helsinki metropolitan area Residential constructionactivityin the construction companies’ stock of unsold apartments apartments unsold of stock companies’ construction and the collapsed, housing owner-occupied for developed demand the newly 2008, in crisis financial the of result a As residential rental for also cost construction. construction rising results a This as housing. owner-occupied of production the in resources their the concentrate in to tend and, they markets, markets, rising residential the in developers major are companies construction Finnish dependent conditions. highly market on is housing rental and owner-occupied particular. in region Helsinki the in housing cities. priced moderately major for need the other increases migration and Internal region Helsinki the in needed is production new total the of one-third About stock., older housing the of loss the replace would need total one- the of Ca. third years. 20 next the within dwellings 500,000 ca. year, per dwellings and, in total 24,000–29,000 to be around of Center estimated is dwellings new for Research need long-term the Technical Finland, VTT, the to According construction Housing in Vantaa, Espoo and Tampere. and Vantaa, Espoo in buildings residential three in invested Patrizia fund German UPM. 2010,in when seen only was of investment foreign second The properties residential the acquired A/S, KE Project company development property Danish of subsidiary 1 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 The division of new housing construction between between construction housing new of division The kem 2 1990 construction volumesconstruction fluctuate with marketfluctuate 1991

1992 permits 1993 “Residential

conditions” 1994 1995 1996 1997 1998 starts 1999 2000 2001 2002 2003 Source: StatisticsFinland 2004 completions 2005 2006 2007 2008 2009 2010 1...9/2011

The Finnish Property Market 2012 43 The Finnish Property Market 2012 44 receives a housing subsidy, set criteria related to both the the both to tenant’s income and applied.are rental prices related criteria set subsidy, housing a receives tenant the where cases In levels. rental or selection tenant for restrictions no are there 2009–2010, in subsidy interest the with produced dwellings the in instance, For market-oriented. conditionsvarying for tenant selection, but rents are are typically there subsidy, interest with produced stock housing In the cost-based. are rents used, are loans housing state where stock, ARA-housing so-called In income. tenant’s and levels of subsidy – there might be restrictions related to both rental used. most the being index ofliving cost the with indexed Rents are conditions. typically specific under certain contract the terminate only can landlord The month. one to right terminate the contract after the an notice agreed has period, typically tenant the period, fixed the After period. indefinite an for valid usually Rental are afterwards, and, year, a levels. as rental or such period, fixed certain for made typically are periods agreements no rental are there for Currently, gradually restrictions 1990s. were the dwellings during rental deregulated market free for Rents practices Rental number. this to related uncertainty issignificant there although dwellings, 28,000 ca. to decrease to estimated is starts of number 2011. the 2012, in In started was dwellings 32,000 some of construction the total, In dwellings. 8,500 some to decreased stock subsidised the in starts of number 2011, the In region. Helsinki the in located are which 50% of some 2010, and 2009 in started new were 26,000 dwellings some rental of construction the total, in and, well, worked actions stimulus these costs, construction decreased the Together with the employment. sector’s impact construction the on crisis’ stimulate the soften both and housing to rental of order production in model subsidy interest attractive an quickly introduced government The increased. In the subsidised housing stock – depending on the form form the on depending – stock housing subsidised the In increasing residential production include improving the the improving include production residential in issues increasing critical most the committee, the to According mid- in work its February. most finalised the Helsinki committee are The the problems pronounced. to the where given area, is metropolitan attention Specific housing. priced moderately of production the enhance to how suggestions on with up come to a up committee set policy housing Environment the of Ministry the 2011, late In balance. market labour the impacts Lack and of negatively migration internal housing prevents market. housing Finnish the in problem serious most the area, is in considered especially the metropolitan Helsinki centres, growth in housing priced moderately of lack The centres growth in housing priced calls Government committee for moderately that it creates a solid groundwork for future housing housing future markets. housing the for improve that actions policy groundwork solid a creates stated it Minister that the Upon report, competitiveness. committee’s the economy’s force receiving the labour for the of critical use is the efficient at as targeted sector, subsidies housing public prevent not conditions economic should poor that stated committee The 2013. in million 200 of quality ca. cost would measures suggested the the total, in that, and estimates committee The efficient improved. construction more made be processes should construction addition, In homeless. the as such needs, special with groups of quality housing the improving to given be should attention Specific market. housing the in fluctuations cyclical the balance to order in needed are measures State infrastructure. urban of coherence the enhancing and plots land of availability after 2012. If the euro area’s crisis will be solved efficiently, efficiently, solved be will crisis area’s euro the If 2012. after outlook the to related uncertainty of lot a is there However, income. in household healthy slight wellincrease as as banks Finnish the by supported is market housing The 2012. in PTT, Pellervo will Research housing prices Economic decline by 1.8% of forecasts the to According migration. internal continuous and demand strong the to due cities, growth the in prices in increase clear a estimate however, others, markets. Some financial tight and outlook economic worsening the to due decrease to some likely are to prices housing specialists, According recently. presented been have views 3.3%. by rose prices area, metropolitan Helsinki the In dwellings. of in old the prices residential of recorded 2.7% was increase an year, whole the for However, 1.4%. by declined prices of 2011, In the again. quarter last markets housing residential impact to started uncertainty economic increased the when all in late 2011,until continued in prices increase increase The major cities. to started prices and volumes transactions again, strengthened confidence consumer and eased loans of housing availability the that, as After mid-2009. and 2008 mid- between crisis decrease slight a in prices financial housing the the turned period, growth solid and long a After market 2012 in residential The Regarding the outlook for housing prices, some differing some differing the for prices, outlook housing Regarding “Increased uncertainty uncertainty “Increased related to housing prices” € 180– situation being similar in all growth cities. Of being similar in cities. the all main situation growth cities, the believed majority vast a and area, metropolitan Helsinki the in increase to continue will apartments small for rents that expected 2011, in the autumn out respondents all nearly carried survey barometer Residential In the RAKLI on rents. rental dwellings, which will pressures in growth result further the to for is demand increase expected uncertainty economic 2–2.5%. ca. only was increase the areas, Oulu and Lahti Vantaa, in whereas 3.5%, ca to the amounted increase Jyväskylä, and Turku In 2011. in Tampere and Espoo most, rents increased by agreements, some 5-6%, in Helsinki, 3–4%. rental between residential new for index rental KTI the to been According has increase annual the Jyväskylä, and Turku Tampere, In average. on 4–5% some by annually increased have Vantaa and Espoo Helsinki, in rents nominal decade, the past During in the major cities. apartments small not are prices risks. include thus and sustainable housing that stated have specialists some that might the stimulate housing markets markedly. However, The outlook for rental development seems positive. The The positive. seems development rental for outlook The for especially strong, remains for Demand housing rental Helsinki metropolitan area Prices andrents ofdwellings,

Rent EUR/m2/month, HMA 10 11 12 13 14 15 4 5 6 7 8 9

1990 1991 Area Helsinki Metropolitan Prices ofDwellingsinOldBlocksFlats,index1983=100, Area dwellings,HelsinkiMetropolitan Rents ofnon-subsidisedrental 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 are being developed. being are apartments serviced of types different and for housing, demand senior increasing the by attracted also are Investors years. recent in residential to allocation their increased thus have institutions Many subsidies. state by supported also is residential in interest Investor sectors. property commercial of turbulence the with together increased has attractiveness point relative an of From investment sector’s view, residential average. on 98%, at high, typically remain portfolios residential Occupancy of rates weaker. slightly remains outlook Oulu’s only 2003 2004 2005 2006

residential expected to 2007 Source: StatisticsFinland

“Demand for“Demand rental 2008

increase further” 2009 2010 2011

0 50 100 150 200 250 300 350 400 450 Price 1983=100, HMA 1983=100, Price

The Finnish Property Market 2012 45 The Finnish Property Market 2012 46 investments, 2001-2011 Total return onresidential property Oulu from OP Pohjola Group’s funds in the second quarter. second the in funds Pohjola OP Group’s from Oulu Turku in and Helsinki, located 383 apartments who acquired SATO, by out carried was transaction portfolio residential were properties only The new significant development. mainly done through residential in investments 2011, During 10 12 14 % 0 2 4 6 8

2002 Total return

2003 property sector for theproperty “Residential has been the performing best 2004 past four years” Helsinki metropolitan area KTI Residentialrent index, Capital growth

2005 market rents, newagreements market rents, spring 2000=100 100 110 120 130 140 150 160 2006 studios & one bedroom studios &onebedroom spring 2000 2007 Income return autumn 2000 spring 2001 2008 autumn 2001 spring 2002 2009

autumn 2002 Source: KTIIndex spring 2003 2010 autumn 2003 2+ bedrooms spring 2004 2011 autumn 2004 spring 2005 autumn 2005

spring 2006 all neither space demand nor supply in the market. the in supply nor demand space neither been has there market, these the dominated As have players systems. major logistics and warehousing sophisticated companies’ centralised retail major by caused partly is demand investment significant of emergence late relatively This connections. traffic new and demand increasing both in properties, of as a years in result rapidly recent has developed particular, logistics in of stock sub-categories the these, main Of sector. the this are properties logistics warehousing and modern and properties, properties, manufacturing light manufacturing corporations’ basis. customer industrial and Large investor heterogeneous a as well as practices, and structures market varying with sub-categories 50%. than more for accounts area metropolitan Helsinki the this, Of cities. Finnish major in metres square 15million some to amounts stock property logistics and industrial The Stock market 5.4 Logistics autumn 2006 4%. over to amounting values, strong ofrental development the by supported again, was, growth capital 2011, In slightly. decreased growth capital year, previous the to Compared 5.4%. of income net and 3.6% of residential growth capital 2011,of consisting 9.2%, In of return total years. a produced investments consecutive four for sector The industrial property The market property industrial can be divided into various spring 2007 In the KTI Index, has residential been the best performing autumn 2007 spirng 2008 autumn 2008 spring 2009 autumn 2009 spring 2010 autumn 2010 spring 2011

Source: KTI autumn 2011 towards the end of 2011. Rents have remained fairly stable stable fairly remained have 2011.Rents of end the towards increase Index, by the KTI tracked in the portfolios instance for did, it although years, recent in low relatively been have properties logistics and industrial modern for rates Vacancy market 2012 in industrial/logistics The rating. tenant’s the by determined partly are levels rental leases, of kind this In 15years. or ten typically is period the contracts, fixed-term In buildings. smaller multi-tenant in for premises used only are leases gross Finnish Traditional rents. triple-net or net typically are Rents and markets. logistics industrial the in vary practices rental stock needs, available user and the both of heterogeneity the of Because Market practices Suomi Assurance. Life Mutual from Vantaa in property one as well as Invest, EU from properties warehouse three acquiring 2011by portfolio in also its increasing continued who Sagax, AB include and logistics space. in warehouse investors Foreign this sector of sqm 70,000 some comprises project PortGate its where area, harbour Vuosaari new the in player strong a is Sponda investors. as institutions that have domestic funds non-listed the Helsinki area. Sponda also acts in this market two through an in has of portfolio properties and extensive logistics warehousing It market. logistics the in active currently investor players. foreign and funds property institutions, domestic including investors new attracting is sector emerging This years. recent in slightly changed situation has this but well, as market logistics the in common of investors. examples individual as municipalities and investors, companies, insurance and pension companies, is more ownership structure diverse, with property occupiers, the market, property manufacturing light the In properties. manufacturing large in common very is Owner-occupation Players Major logistic projects under construction in Finland in construction under projects logistic Major Tiilitie Logistics, phase II, Vantaa II, phase Logistics, Tiilitie Vantaa center, logistics Cargo Flyway Nurmijärvi center, Logistics Sipoo center, Logistics Orimattila center, Logistics Project Sponda is the most significant domestic developer and and developer domestic significant most the is Sponda recently, relatively up very was, until Owner-occupation 17 000 000 23 25 300 75 000 77 000 Size YIT, UBS Euro Core Euro YIT, UBS Ilmarinen Schenker DB SOK Estate Real Itella Developer/Investor remained negative at -2.0%. Income return increased to to increased 7.9%. return Income -2.0%. at negative remained growth 2011,Capital 5.8%. of In return total that. a produced of sector the majority vast a representing logistics properties and warehouses with database, Index KTI the of Lahti. near Orimattila, in centre logistics 77,000 a developing is by out Itella, who is carried project logistics ongoing biggest the area, metropolitan Helsinki the Outside 2012. early in completion for due is Helsinki, of north-east in located Sipoo, centre logistics sqm 75,000 S-Group’s area. airport the in mainly Vantaa, in only out carried currently are projects area. metropolitan Helsinki the in properties logistics in investments new made Keva and funds Group’s Pohjola OP institutions, domestic the Of YIT. from Vantaa in property logistics built newly sqm 27,000 a acquired who The 2011. fund, was made Core by Euro UBS single transaction biggest in 15%, at low, remained volume transactions development. the leading premises modern the with years recent in slightly increased have or investments, 2001-2011 Total return onindustrialproperty 10 12 14 % -4 -2 0 2 4 6 8 nutil wrhue rpris con fr a 10% ca. for account properties warehouse / Industrial logistics new major area, metropolitan Helsinki the In total of properties industrial and logistics of share The

1998 Total return

1999

2000

2001 Capital growth 2002

2003

YIT Lemminkäinen Lemminkäinen Hartela Constructor 2004

2005 Income return

2006

2007

2008 Source: KTIIndex

Source: KTI Source: 2009

2010

2011

The Finnish Property Market 2012 47 The Finnish Property Market 2012 48 Western. Western. Best and Hotels Scandic Hotels, Finlandia include hotel operators major Other chains. their in hotels 47 has currently and Inn, Holiday Rantasipi for instance, the Cumulus, brands under hotels operates who Restel, country. the across hotels properties. hotel some own also particular, in S-Group operators, Some portfolios. their in properties hotel some hold also institutions biggest of the with a of portfolio 15 hotels Most and centre. one conference in properties hotel – Pandox Swedish ofthe –part Hotels Norgani and 39 Finland, owns who fund, hotel CapMan’s include Finland in owners property hotel biggest two The Players 53 hotels. major are there Helsinki, In beds. 106,000 ca. of capacity total a with rooms, 49,000 742are There hotel ca. units in / comprising Finland, lodging Stock 5.5 Hotels S-Group is the biggest hotel operator in Finland with 56 with in Finland operator hotel is biggest the S-Group 1.0%, and net income amounted to 6.2%. 6.2%. to amounted income net 1.0%, and by increased values 2011.Capital in 7.3% of return total a situation. economic negative the to due decrease to expected is accommodation hotel for Demand 2009. of level the reach not did sales the increase, the Despite side. foreigners’s from demand increased to due 2011, mainly of quarters three first the during 4.5% ca. by euros. 86 increased ca. services hotel of of turnover the 2010, to Compared price room average the with amounted 51.3%, hotels to of rate occupancy average the 2010, In market 2012 in Hotels landlord and tenant might be differently allocated. differently be might tenant and landlord the between responsibilities use, retail in example, for other space, of amount significant a are there where centres city in properties some In costs. operational and maintenance all for responsible is operator The agreements. net triple long, According to the KTI Index, hotel properties delivered delivered properties hotel Index, KTI the to According Rental agreements in hotel properties are typically typically are properties hotel in agreements Rental

Photo: NCC / Sini Pennanen many government agencies, are located in the Helsinki Helsinki the in located are agencies, as government well many as headquarters, company major all Nearly GDP. Finnish the of one-third than more 30% delivers and jobs, some all of population accommodates it region, Finnish Helsinki the the in 14lives of of consists One-quarter region municipalities. Helsinki entire The market perspective. property the from its outstanding that also is means importance which country, the in position dominant a has Finland, in region city significant only the Helsinki, area 6.1 metropolitan Helsinki markets. consumer by driven are which retail, or residential as such sectors, select certain on concentrate typically but cities, smaller in invest players major Some domestic owner-occupiers. and investors local by dominated strategies. investment their in markets target as investors centres” “growth these and area large Helsinki the define Many areas. market these in only operate that players local some are there cities, the these In mid-2000s. after capital international some attracted also they’ve but institutions, domestic among popular traditionally – are Jyväskylä and Oulu Turku, Tampere, of centres growth to amounted 64%. transactions all of share area’s metropolitan Helsinki 2011, the in and, area, market liquid most the also is It area. metropolitan Helsinki the in located is Finland in the in region stock office total of the dominant 50% Some market. property Finnish the is Vantaa, and Kauniainen Espoo, of cities neighbouring immediate the and of Helsinki City the of consisting area, metropolitan Helsinki The for 2012 different regions –Outlook 6. markets Property in The structure oftheeconomy,percentage ofjobs,2010 Property markets in smaller city regions are traditionally traditionally are in regions city markets smaller Property regional the typically – markets second-tier The 16,5% 24,1% 15,3% HELSINKI REGION 0,6% 43,6% andforestry ■ Agriculture ■ Retail ■ Manufacturing ■ Publicservices ■ Privateservices in 2012.in trend downward its continue to expected is jobs industrial of number the of development the Commerce, of Chamber Helsinki the to according and, country, whole the lagged of that recovery its Moreover, 2009. in economy Finnish the of collapse the from average on country the suffered than more region the jobs, industrial in decrease the to due However, mainly country. whole the of growth economic of (23%).(17%) country entire the in than lower is occupations industrial of proportion the Therefore, as an centre also administrative its affects economic structure. role Helsinki’s country. the of rest the to compared Helsinki in role and stronger a have activities, development industries and research high-tech as well as services, professional Specialist sectors. service private in are country) entire the across (32% 44% some region, the in jobs 742,000 the Of region. Helsinki the in higher significantly is sector service private the in jobs of proportion the country, the of rest the differs to region Compared country. whole Helsinki the of that from the significantly of structure economic The base: Economic Population: Kauniainen. and Vantaa Espoo, Helsinki, of cities the of consisting area, metropolitan Helsinki the in concentrated are region the of population the of majority the the as well as of activities, administration that Jobs, country. entire exceeded constantly has region of Helsinki growth the and activity economic The area. metropolitan For several years, the Uusimaa region was the forerunner was the region the forerunner years, For Uusimaa several 23,1% 12,3% WHOLE COUNTRY 4,8% industries, public sector services sector public industries, high-tech services, Professional region: Helsinki Vantaa: Espoo: Helsinki: Source: HelsinkiChamberofCommerce 32,3% 27,6% 1,350,000 252,000 203,000 595,000

The Finnish Property Market 2012 49 The Finnish Property Market 2012 50 100 120 140 160 180 200 Office rent indexandinflation whole country. whole the in 13% stock some total the of representing sqm, million 3.5 ca. to amounts stock space of Retail 10% stock. total ca area’s the Vantaa and 20%, some accommodates Espoo some area, 70% is in located Metropolitan Helsinki. Helsinki centres. shopping main the well as Vantaa, as in Tikkurila and TapiolaEspoo of in Important centres regional Vantaa. include areas in retail area airport the and Espoo in areas Leppävaara and Keilaniemi Helsinki, in Ruoholahti areas include office prime other CBD, the Outside markets. retail the in and location office an as both position undisputable an has (CBD) district business central Helsinki the markets, 80 Of the ca. 8.4 million sqm total stock of offices in in offices of stock total sqm million 8.4 ca. the Of property area metropolitan Helsinki the Within

03-1995 Rent index(Helsinki,CBD1993=100) 03-1996 03-1997 next sixmonths,balancefigures Expected developmentofoffice rents withinthe 03-1998 03-1999 03-2000

03-2001 -100 -80 -60 -40 -20 20 40 60 80 % 03-2002 0 Turku Tampere EspooVantaaOulu Jyväskylä Helsinki CBDother 03-2003 spring 2001

Source: KTIandStatisticsFinland 03-2004 autumn 2001 03-2005 spring 2002 03-2006 Inflation (1995=100) autumn 2002 03-2007 spring 2003 03-2008 autumn 2003 03-2009 spring 2004 03-2010 autumn 2004 03-2011 spring 2005

autumn 2005

spring 2006 Helsinki Central Business District Business Central Helsinki markets 6.1.1 core of the core –the Helsinki preferred office location in the region. region. the in location office preferred most the remains and attractiveness its maintained has CBD Helsinki the Nonetheless, area. Helsinki the in areas other in rapidly increasing been has stock office of modern supply and well responds refurbished, to the The needs of occupiers. the and maintained well Despite mostly is stock 1900s. the supply, new of early lack and 1800s late the in built was CBD the in stock office the of majority The organisations. sector public with together – etc banks, investment firms, law consultancies, business – services business-to-business offering companies mostly are in centre the city users Office buildings. as cultural several well as functions, administrative sector public important most the accommodates also It undisputed Finland. in the trade retail also of centre and location, office attractive most the is area small geographically This Finland. in property submarket single important most the is CBD Helsinki The autumn 2006

spring 2007

autumn 2007

striking instriking challenging spring 2008 CBD becomes moreCBD position of Helsinki “The strong market “The

market conditions” autumn 2008

Source: RAKLI-KTIbarometersurvey spring 2009

autumn 2009

spring 2010

autumn 2010

spring 2011

autumn 2011 locations, there is usually competition between tenants. tenants. between competition is usually there locations, continue rising slightly within the next year. For the best very to expected are they and steadily, increased have rents retail Prime market. the in space vacant no practically is there and space. office of 2012, sqm 25,000 in and retail of completed sqm be 30,000 comprising will which Sponda’s project, is project CityCenter extension and redevelopment major Another profile. tenant their and refurbishment significant of terms in 2011, both in facelift major a experienced have both which area, Kluuvi the in Kluuvi and Galleria Kämp 2012. in started be to sqm, In respectively. a Forum, sqm is 8,000 extension planned in of the and centres areas with 30,000 ca. CBD 35,000 retail shopping largest the are other, each to near Forum, very are which and Kamppi Centres Shopping supply. retail and its strengthened has in position to thanks office years, recent new and refurbished area Kamppi the CBD, the Within five years. years. five past the during CBD the in sold been have assets major 13 only follow-up, Transaction KTI the to According 5.7%. of yield a reflecting €122 million, for April in Sponda by block Fennia- the of acquisition the was CBD the in transaction In 2011, portfolios. significant only in their the jewels crown the to on hold to want owners current their as market, the in offered assets of number low the by limited is submarket smallish this of 2011. late 5.75% in liquidity However,ca. at stood yields office prime survey, Barometer RAKLI- Property the KTI to According market. investment the market in area attractive most the as remains also CBD Helsinki database. rental KTI the to according sqm, / €30 above well for rented were premises best and €28, to increasing quartile upper the with recorded were rents top New submarkets. other most from markedly differs This 2011. in 4.1% of increase annual an the CBD. in also slowed down towards activity the year-end, However, agreements. of number and space of terms 2011 in in both markedly increased activity market rates and have low.vacancy remained 2011,During the rental area, metropolitan in the Helsinki space of office oversupply Demand for retail premises in the CBD remains strong, strong, remains CBD the in premises retail for Demand include centre city the in centres shopping Other Due to its strong position in the rental market, the the market, rental the in position strong its to Due showed offices CBD Helsinki for index rental KTI The the by unaffected almost remained has CBD Helsinki “Low supply“Low of assets liquidity of Helsinki for sale limits the CBD” businesses in the “Design District Helsinki” area. area. Helsinki” District “Design the in businesses Telakkaranta area is planned to mainly creative accommodate adjacent The properties. retail and hotel office, new several in of property construction the enable will office plan area’s The and Länsisatama. warehouse store, department its a opened to Verkkokauppa.com and building, office headquarters built newly its moved Silja Tallink when 2011, in completed were area the in projects development property commercial first The centre. city the with area the connect will which construction, under route transport light new a also is there and bridge, new a by Ruoholahti to connected now is Jätkäsaari 2008. in Vuosaari to operations its moved area for the use was after expanding freed alternative harbour project. office sqm 6,000 Sponda’s through well as as centre, ofTechnopolis’s Ruoholahti phase of second the construction the through expansion continues submarket The 2008–2010. years the between completed year. past the during increased has space vacant of amount the although stable, rather remained have area the in Rents levels. CBD to are close rents where buildings, completed newly the in except K-Group. ofthe retailers the by mainly occupied the area is limited to sqm shopping 26,000 Ruoholahti, centre in supply space Retail area. office prime other region’s the is the CBD, Ruoholahti Alongside area. the Salmisaari adjacent in headquarters their moved have Varma, as and Bank such Sampo companies, insurance and banks some recent also In years, companies. industrial and consultancy business IT/high-tech, as such users, office of variety a attracted Ruoholahti has route. radial western the major at a of CBD point the starting near area office modern a is Ruoholahti -Jätkäsaari –Salmisaari Ruoholahti 55–60,000 sqm, comprising also some residential dwellings. dwellings. residential some also comprising sqm, 55–60,000 ca. to amounts buildings four these of area gross the total, In 2012. in started be will KPMG and Young & Ernst UPM, for buildings office the of construction the Also, 2012. late in completion for due is and started, be already has Media, of Alma – headquarters one first of the construction the and buildings, office new major four accommodate also will area 2011. late The in the museum Kiasma of to vicinity immediate completed the of was Hall Music development new The the area. Töölönlahti through phase development Next to Ruoholahti is the growing Jätkäsaari area. This This area. Jätkäsaari growing the is Ruoholahti to Next were area Salmisaari in buildings office new major The rents Office in Ruoholahti are slightly lower than in CBD, Helsinki CBD is currently going through an exceptional exceptional an through going is currently CBD Helsinki

The Finnish Property Market 2012 51 The Finnish Property Market 2012 52 At the moment, construction work in the area concentrates concentrates area the in work construction moment, the At planned. being others several was with 2010, early in area completed the in building office new first The Vuosaari. to operations its moved the harbour the where when released Sörnäinen, was land to adjacent Kalasatama, is centre new Ruskeasuo. in a property park business constructing is NCC Also, 2012. the in early in office complex head own its move to going also is Skanska buildings. office Ruskeasuo, four comprise completed, when in will, which project development office major a is This two phases of the in Rasti Manskun so-called the area in 2010. first the started Skanska supply. space modern mostly with 2015. in started be to estimated is construction and phase, planning the in now is project The million. €600 ca. to amount to estimated is investment the total, In properties. retail, residential and accommodate office will which hectares, 8.2 is area total land The players. main the are Helsinki of City and state Finnish the where station, railway the of surroundings the of development the includes Pasila in conditions. project major Another market negative the to due start construction the postpone to had they although area, the in concept park planning to are develop a major business Pension Foundation phases have first now been Also, completed. and Sponda YLE two Park’s Business Visio Group’s Fennia where area, Ilmala / Pasila in active most been recently has development The improvements. tenant or adjustments rent require thus might renting and tenants, demanding the of requirements the meet not does areas the in stock older The years. past the during increased has space of vacant and the amount downturn, the economic from more suffered also have they – Ruoholahti and CBD to compared – locations are secondary as areas considered these typically As areas. these in stock property old and new the between levels rental There in supply. differences significant office are multifaceted a by characterised are areas and Vallila. These Sörnäinen Pasila, include centre city the of out somewhat situated areas office traditional Other – Kalasatama –Vallila –Sörnäinen –Pasila Ruskeasuo Another developing area in the vicinity of the city city the of vicinity the in area developing Another area office Ruskeasuo developing the is Pasila to Next Pasila, Jätkäsaari and “Helsinki develops property areas in areas property and commercial new residential Kalasatama” are residential buidligns. Also, some old office / industrial industrial use. residential into / converted being are properties office old some Also, buidligns. area the residential in are projects construction ongoing All premises. in investments significant not allow do demand scarce and levels rental Low high. remains space vacant of amount 2011.The €11 per sqm was the median rent database, in new rental agreements in autumn KTI the In area the in decreasing continue Rents attractiveness. their retained have station railway the to closer buildings modern the whereas rents, low relatively in particular, investors have been forced to attract tenants buildings olderPitäjänmäki.Inin areas different the by between markedly vary levels supply,rental space heterogeneous the of Because volatility vacancies. andinwhich rents caused has demand, fluctuating from suffered has that Helsinki in areas the of one is Pitäjänmäki parks. business modern some as well as properties multi- type office both head some buildings, comprising office tenant 1990–2000s, in use office mainly city into converted the been has that of area industrial old north an is centre, kilometres seven situated Pitäjänmäki, Pitäjänmäki 2015 2021. and between phases in completed be to during connections work of 2012. the construction The is centre actual estimated traffic in rearrangements substantial requires project The planned. being is tower office / hotel a and centre a shopping buildings, residential of six consisting complex a area, the of centre the In projects. residential on is not significant. In late 2011, a new industrial / warehouse warehouse / industrial 2011,new late a In significant. not is space vacant of the amount absolute the although recently, area characterised have rates vacancy office High supply. into a area with transformed and office more retail diversified gradually has that area warehousing old an is Herttoniemi line. metro the and route radial eastern the both to adjacent years. recent in area the in active been has construction Residential area. the in supply office modern more represents Park Business old Portaali into buildings. industrial developed been both have which Arabiakeskus, accommodates also area The as Arabia, shopping well centre as and centre and retail office students. 6,000 and 5,000 jobs residents, 10,000 ca. accommodates currently The recently. area rapidly developing been also has area This Helsinki. in production industrial of origin the was past, the in which, area, Arabianranta is area city central the of East Helsinki Eastern Herttoniemi is an area five kilometres east of the CBD, CBD, the of east kilometres five area an is Herttoniemi space remains high in “Amount of vacant Pitäjänmäki” Photo: NCC / Sini Pennanen park properties in existing complexes. existing in properties park business are typically Most projects sqm construction. under 95,000 ca. were 2011,there of end the at and, completed, was space of office 2011,sqm During in 50,000 Espoo. some areas several in built being recently currently are or have completed been buildings office new several rates, vacancy high the Despite Espoo. in areas many for problem serious a particular. in market office the the of levels divergence in rental in be seen varied can of Espoo stock The property centres. these in scattered also is stock property commercial multifaceted regional city’s The several centres. has city biggest second Finland’s Espoo, market areas property regional 6.1.2 several with –acity Espoo built. being are properties residential rental new also area, the In 2012. in started be to planned is centre the of refurbishment The northern in metres. square 115,000 of centres area leasable gross shopping a with Europe largest the of one is mall an area for attractive retail and living. The shopping Itäkeskus as development its supports metroline, well by as the eastern as route, radial eastern the and I Road Ring of junction the use. hotel into converted isbeing property office old an currently, and Planmeca, for completed was property Office vacancy rates have been, for the past few years, years, few past the for been, have rates vacancy Office at location area’s The area. Itäkeskus the is east Further environments for living, business, research and studying. In In studying. and research business, living, for environments visioned to is become a combining centre innovative significant area Tapiola-Otaniemi area. the residential in new planned are several projects Also facilities. parking in as well as I, Road Ring in investments significant by improved be will Keilaniemi, to further and Otaniemi, Tapiola, between connections traffic the addition, In 2012. early in started be Heikintori of shopping and centre Tapiola projects retail centre, are both planned to extension and redevelopment collaborate centre, Tapiola the traditional developers the In Espoo. of and City the with investors property where facelift, major a experiencing currently Tapiolais Espoo. in significant. most the is Tower project Keilaranta sqm 43,500 Ilmarinen’s of and also planned, being are which Hartela’s major projects Several Tapiola. and Matinkylä Keilaniemi, example, for in, on going currently are projects development office this, new Despite year. past the during worsened has which premises, office of oversupply serious from suffer currently however, do, areas these of 2015. in Many completed be to line metro west-bound a from boost a get to expected are areas Espoo. Olari property in route commercial radial Matinkylä- and Tapiola, Otaniemi, Niittykumpu Keilaniemi, western significant the around several submarkets are There -Matinkylä Niittykumpu –Tapiola – –Otaniemi Keilaniemi Tapiola and Matinkylä are also significant retail centres centres retail significant also are Matinkylä Tapiola and

The Finnish Property Market 2012 53 The Finnish Property Market 2012 54

Photo: SATO / Antonin Halas residential, office, as well as premises for public services. public for premises well as as office, residential, including years, 10–15 next the within built be to planned are which rights, building of sqm million 1.0 some comprise to planned is area Suurpelto the 2012.of total, end In the by completed be will which dwellings, residential 1,000 ca. of the development comprises phase first The developed. being West of Tapiola, is area currently a new Suurpelto 325 hectar in Otaniemi. area campus its expand to planning is University Otaniemi. Aalto in situated is University, Aalto new the of part units. retail -type box Olari. big and park and retail of Matinkylä concentration the is of Suomenoja west located area, Suomenoja be will Safiiri of2012. of quarter first the in completed phase first The Safiiri. Park Business in million €50 invested fund German 2011, late In unnamed an planned. being or construction under projects park business space. residential In Matinkylä, there are also some significant of new sqm 15,000 well as as centre, shopping Omena Iso to extension sqm a 25,000 stimulates line metro the Matinkylä, The Helsinki University of Technology, currently currently Technology, of University Helsinki The is Espoo in submarket retail important Another property developmentproperty “The new line metro “The stimulates abundant in Espoo” property developers as well as property companies Sponda, Sponda, companies property as well as developers property main Finavia, Vantaa, of City the include area the in players main The years. Airport few past the Helsinki-Vantaa during rapidly developed the has around area Aviapolis The properties. properties. 110,000 sqm shopping centre, as well as and office warehouse a include area the trading of plans future units The goods. unit-size large retail several accommodates currently area The III. Road Ring and motorway Turku the of in junction the centre Espoo the to next situated is which Lommila, in area. the in planned being are and hotel projects new Additionally, residential terminal. bus new 40,000 the to connected ca. be also to would centres space The sqm. retail their increasing thus centres, shopping two the extend and connect would that pending currently is plan city the in change A centre. Espoo the in western the route. railway alongside and motorway Turku the to close situated is buildings, retail various and city the of buildings administrational the accommodating area an centre, Espoo centre Espoo 2011. during buildings office new the in invested who investors of examples as Investment Union and fund pension Veritas Insurance, Life OP with investors, attracted have also projects New tenants. new able to attract been has area the as Leppävaara, in increased not has space underway. currently are projects significant four another and Leppävaara, in completed business were properties new park two 2011, During Quartetto. Hartela’s and Polaris, project joint Lemminkäinen’s and NCC’s NCC’s including Alberga, buildings, several with business by complexes park characterised is area The supply. residential shopping modern some and stock, mall shopping traditional office a Sello, centre expanding rapidly diversified, comprising a area Leppävaara the is I Road Ring the Along Leppävaara Aviapolis for areas. station the around due opportunities Line, Rail Ring development in new 2014,completion up open new property will the of development The centre. Tikkurila traditional the in its as property well and as airport surroundings, commercial the around concentrated important are areas most market the Vantaa, In connections improved traffic 6.1.3 Vantaa – new through opportunities A new residential and business area is being planned planned being is area business and residential new A located are Entresse and Espoontori centres Shopping vacant of amount supply,the new abundant the Despite well as two new logistics properties by Pohjola’s fund. Pohjola’s by fund. properties as logistics new two well as fund, M&G PRUPIM’s by property retail a Union Investment, by Hehku Park’s Business Plaza the of acquisitions area. airport the of2011,end serve will ofwhich most the at Vantaa in construction under space logistics new of sqm 55,000 ca were or In there its vicinity. total, area airport the in underway are projects logistics park several and business projects two addition, In completed. was property’s extension Hotel Hilton the airport, the At unit. logistics some properties, new STC’s as well as park units, retail big-box new / redeveloped business new five of completion gardening. and furniture vehicles, motor for outlets as such units, retail big-box by favoured areas retail important also are areas Tammisto and Pakkala Aviapolis, of vicinity the In premises. leisure and leisure office hotel, comprising Flamingo centre the is there neighbourhood, immediate the In Jumbo area. the in center metre retail major the is centre shopping square as 85,000 well The supply. as retail properties, abundant logistics premises, office modern includes area Aviapolis the in stock property Commercial connections. railway main and in located Aviapolis, thus linking the area with the city centre jobs. 35,000 some accommodates currently area The it significantly. increase expects to Vantaa of City the and area, 16,000 the some in inhabitants currently are There IVG. and Technopolis In 2011, the main transactions in the area included the the included area the in transactions main 2011, the In the by increased supply space the 2011, During be will Line Rail Ring new the of stations the of One connections in Vantaa” “New Ring Rail Line Rail Ring “New will improve traffic Total returns inFinnishcities Helsinki Metropolitan area 6,2% area Helsinki Metropolitan Other majorcities5,8% Rest ofFinland5,4% Whole Finland6,0% -2 Capital Growth ■CapitalGrowth ■ Incomereturn -1 -1,9 -2,4 -0,2 -1,0 0 0,5 1 new station centre as well as new residential and business business premises. and residential new as well as centre station a new includes plan The areas. Jokiniemi neighboring is the and Vantaa Tikkurila of the of redevelopment major City a planning The currently buildings. administration the of city’s most for location the and Vantaa in area retail and office main the is Tikkurila area, airport the to addition In Tikkurila 2014.in sqm phase 60,000 first of the centre is planned for completion The underway. currently is process plan city the which for sqm shopping centre, close to the new railway Kivistö station, 110,000 a is area the in project individual biggest The area. the in accommodated be to planned being are jobs many as and nearly inhabitants 30,000 Some the Road. Rail new Ring alongside III, Road Ring to close area, Marja-Vantaa called so- the in is project development planned biggest Vantaa’s Marja-Vantaa area. area. the in increases rental the prevents supply Increased just slightly lower than in the Ruoholahti and Keilaniemi areas. 2 7,4 Office rents in the best premises in the Aviapolis area are 6,2 5,4 7,9 6,8 5,7 3 major development area 4 “Marja-Vantaa is a 5 in Vantaa” 6 Source: KTIIndex 7 8 %

The Finnish Property Market 2012 55 The Finnish Property Market 2012 56 city, as well as two new hotel projects in the city centre. centre. city the in projects hotel new two city, well as as the of parts different in construction under projects office four currently are in and Lielahti a There centre Nokia. retail in property hypermarket new a of completion the by as well as centre, the in was projects supply redevelopment two Retail by 2011. extended in centre city the in completed was building office new One player. the domestic a acquisitions, was the buyer of all In year. entire the in reported was, however, market quiet in very 2011, investment with only a few transactions The investors. estate real international and domestic both attracted has which region, Helsinki the area. the in environment in the developing business co-operation active pursue region Tampere the in muncipalities The technology. healthcare as well as automation, and machinery technology, information include region Tampere the in areas companies. expertise Technology service as well as businesses technology high attracted recently has that city industrial old an is Tampere countries. Nordic the in city inland largest the is Tampere 350,000 total: in region Tampere Population: Location: Tampere Tampere, centres: Jyväskylä Turku, and growth Lahti Kuopio, Oulu, Other 6.2 Tampere is the most active property market area outside outside area market property Tampere is active the most 215,000 Tampere: countries Nordic the in city inland biggest the ofHelsinki; 170 north km underway, where the retail space will be increased by by increased be Sponda Koskikeskus, to next will area, Ratina the In sqm. space 1,500 retail the where project underway, extension and redevelopment a currently Koskikeskus, is In there street. main the to next centre shopping situated is Koskikeskus the in and Tampere Hämeenkatu, street, in main the along space retail expensive most The office property. property. office main the is Technopolis another developing it is currently where in area, the investor centre. city the some from at distance located Tampere of University Technical the of supply. of new despite moderate remained has space vacant of and amount The office for vicinity. the immediate and both centre in the city use, residential properties, industrial its for known redeveloped also is Tampere Park. Business Tulli the of the Tulli area by has recently been extended the construction in supply Office sqm. per €20 exceed levels rental premises, office In best the Tulli Kauppi. and of Hatanpää, in areas the found is space office modern centre, city the to addition In Hervanta is a developing area in the neighbourhood neighbourhood the in area developing a is Hervanta waiting for improving plans in Tampere are “Major development business conditions”

Photo: Skanska / Pauliina Munukka centre. centre. shopping Ideapark the to next Marjamäki, in Idea-Areena and the 110,000 in Lahdesjärvi Center sqm Ikano the 45,000 include ones biggest the projects, retail planned various the Of issues. financing as well as process planning prolonged the both to due region. postponed been has Tulli schedule the However, the in a planned is centre, arena shopping multifunctional Ratina new the to addition In abundant. 2012 in . started be to building terminal new a for plan a as well supply, as space logistics of plenty also is there located, is airport the where Pirkkala, neigbouring the In Tamro, and respectively. Media Alma by on going currently projects construction new are there where Lahdesjärvi, and Sarankulma include Tampere been yet not confirmed. has centre the of schedule construction the but underway, are centre the for negotiations Rental shopping centre. metre square 55,000 ca. new a develop to plans areas include businesses around the sea cluster, as well as as well as cluster, sea the around businesses include competence areas modern region’s The city. the in universities of on based are two the presence Turku’s strengths economic Population: Location: Turku Prime office rents inmajorFinnishcities 10 15 20 25 30 5 eur/m New development plans in the Tampere region are are region Tampere the in plans development New in areas logistics / industrial important most The

autumn 1995 Jyväskylä Tampere Oulu Vantaa Espoo Turku Helsinki 2 /month autumn 1996 autumn 1997 autumn 1998 autumn 1999

300,000 total: in Turku region 179,000 Turku: ofFinland corner south-western in of Helsinki; west km 160 autumn 2000 autumn 2001 autumn 2002 autumn 2003

Source: RAKLI-KTIbarometersurvey autumn 2004 autumn 2005 autumn 2006 autumn 2007 autumn 2008 autumn 2009 autumn 2010 autumn 2011 autumn 2011 (autumn 2012) centre and some regional centres outside the city, such as as such city, the outside centres regional some and centre €11–13 around are sqm. per offices levels for rental In average new development. the centre, city for opprtunities limits which significant, remain stock office old and new in differences Rental projects. redevelopment two to limited is Turku in development project office Otherwise, development project. office Jokikatu sqm 5,000 new NCC’s was 2011 in completed Another area. the in completed was Center Tech High Turku the of phase third 2011, the In centre. city the in those than higher are rents area, in space the Kupittaa office For modern the mid-2000s. in supply the increased area the in development Abundant space. manufacturing high-quality and of office consists and companies, service business-to-business and high-tech, biotechnology at targeted mainly is area This station. the railway to next and area university the near located Kupittaa, recorded. were however, transactions major no 2011, In market. the in active been having players local and of types various players recently, with domestic international, centres. growth Finnish other most in than higher is region Turku in guarantee services will private of proportion which The 2014. 2011,until employment during projects major some attract new to managed dock shipbuilding The view. of point development great economic of region’s the is from importance which business, shipbuilding extensive an by supported are region the in industries Metal biotechnology. Finnish cities Prime office yieldsinmajor 10 % 4 6 8 The retail market in Turku is concentrated in the city city the in concentrated is Turku in market retail The in is area Turku the in market office active most The interested has market investment property Turku The

autumn 1995 Jyväskylä Tampere Oulu Vantaa Espoo Turku Helsinki

autumn 1996

autumn 1997

autumn 1998

autumn 1999

autumn 2000

autumn 2001

autumn 2002

autumn 2003 Source: RAKLI-KTIbarometersurvey autumn 2004

autumn 2005

autumn 2006

autumn 2007

autumn 2008

autumn 2009

autumn 2010

autumn 2011

(autumn 2012)

The Finnish Property Market 2012 57 The Finnish Property Market 2012 58 last several years, but has recently increased slightly. increased recently has but years, several last is area levels. rental the affects which in dispersed, stock the of quality The area. the in owner private-sector single biggest the is Technopolis University. and Oulu companies high-tech several which accommodates centre, city the of north area Linnanmaa the is area central ongoing projects. few property industrial a to limited is development new Currently, sqm. 30,000 ca. of area leasable total with centre shopping biggest Finland’s northern it made which centre, shopping developmend important in 2011 most completed of the Zeppelin project the extension was The 2011. during region company market. important office the in player an property is Oulu, in Listed founded originally strong. Technopolis, market quite the in remained position has whose funds, pension domestic sector. industrial main the being goods electrotechnical of manufacturing with country, whole the in than lower is the production of industrial of share specialities The region. as regarded are particular, in services, emphasises and Engineering services. information technology structure economic region’s The country. entire the of area the of of one-half about – Finland northern influence of all covers which the city, technology a and is science Oulu university, mid-1990s. the fastest since Finland the in of areas one growing been has 10 municipalities, and Oulu of surrounding City the of consisting region, Oulu The Population: Location: Location: Finland of centre growth northernmost the Oulu: Raisio. in located Mylly, centre, shopping biggest region’s the for planned extension is major A region. the in elsewhere increase rates to vacancy expected is projects these of completion The area. to Kupittaa next in Biolaakso, built being currently are Rautakesko and Gigantti for properties shopping retail New Hansa centre. the of part is centre which Kultatalo, city of that the is in project redevelopment retail ongoing property Another in late 2011 Estate. completed Real was Centrum by CapMan the of redevelopment the centre, city the In Raisio. in centre shopping Mylly the and Länsikeskus The office vacancy rate has remained very low for the the for low very remained has rate vacancy office The the outside market estate real important most The Oulu the in recorded were transactions major No attract to enough large is market estate real Oulu’s 230,000 total: in region Oulu 144,000 Oulu: ofHelsinki north km 600 Population: Location: Jyväskylä the highest retail rents are still found. found. still are rents retail highest the where is that and strong, remains position market district’s shopping pedestrian the development, new active Despite 2011. during negative more slightly changed has the outlook slightly,although increasing continue to expected are rents low, the very and remains rate vacancy the market, retail the the Turku and to Tampere levels. In stable. Rents have remained close are levels rental properties, prime In Jyväskylä. in Jyväskylä. Jyväskylä. near 2012 Lievestuore in Millog for early the In in completed was a new project markets, / market. industrial logistics the in improvement for wait are but projects major planned, several addition, In centre. city the in underway is a property 32 Currently, Kauppakatu the of sqm. redevelopment 20,000 another by supply thus adding the second phase of was the centre completed, Palokankeskus the In past few during years. 2011, significantly has increased supply retail The investors. national some well as as retailers local include players major The centre. regional important property. office sqm a developing new 5,000 Technopolis is In currently Mattilanniemi/ Lutakko, as supply. modern more well with areas as Lutakko and Ylästönniemi use, office into redeveloped been have properties industrial old where Tourula, include supply modern with areas office Other recently. developed been has stock new no however, where, region, the in area centre. city the through traffic ease would which road, bypass a through planned developed be are to area the road in main connections national Traffic connections. important several is of it junction because the in favourable, is in location however, Jyväskylä’s are, jobs services. 68,600 region’s the of Two-thirds as well industry. industries, metal as and graphical machinery cover areas industry prominent most region’s Jyväskylä The strong a and technology. new has industries on both traditional emphasis that town university dynamic a is Jyväskylä In 2011, no major transactions were reported in in at lowa stands very level still rate of offices vacancy The reported were transactions major no 2011, In an is centre city Jyväskylä market, property retail the In market office important most the is centre city The total: in region Jyväskylä 132,000 Jyväskylä: ofFinland centre the in ofHelsinki, north 270 km 142,000 sqm head office and retail property in Renkomäki. Renkomäki. in property retail and office head sqm 13,000 new wellas L-Fashion’s as in Orimattila, area Pennala in centre logistics sqm 77,000 Itella’s include region the in 2011. late in completed was sqm, 34,000 ca. of area leasable and sqm, 69,000 of ca. area a gross with centre a shopping major area, Karisto the In street. main the in and centre shopping projects. or development new planned ongoing no are there market, office the In cities. other most in than higher is rate vacancy Office building. office a and retail mix-use a Additionally, into redeveloped been has hotel offices. former modern into buildings industrial old transferred have that efforts redevelopment of result a 30%. to decreased has share currently occupations trade some represent 60% of the and jobs in the region, while industry’s Services region. the in operators logistics attracted has location favourable The region’s businesses. small of plenty is also there where issues, environmental in competence its services, emphasises region the and professional to transferred been have jobs Recently, more industries. plastics and furniture metal, woodworking, to home is that city industrial traditional a is Lahti Population: Location: Lahti Population: Population: Location: Kuopio national and local investors. investors. local and national both of consisting players domestic by dominated is market industries. in 11% is some region, the in jobs 46,000 ca. the Of area. in the employer biggest the is sector service the moment, the at cities major most in As wood. to related mostly are areas industry Traditional Finland. eastern in province situated the is Savo, of of capital the and city university a Kuopio, The most significant ongoing development projects projects development ongoing significant most The Trio around concentrates in supply centre the city Retail as increased has centre city the of attractiveness The The property investor base in the Kuopio property property Kuopio the in base investor property The

“Major retail projects Kuopio: Kuopio: ofHelsinki north-east km 400 Kuopio region in total: total: in region Kuopio are underway in underway are Lahti region in total: 200,000 total: in region Lahti 102,000 Lahti: ofHelsinki north-east km 104 Kuopio” 97,000 121,000 completion in late 2012, with gross areas of 36,000 and and 36,000 of respectively. sqm, for 54,000 areas due gross with both 2012, late Center, in Retail completion Ikano and Ikea underway: projects the retail major two in currently are located There area. both Levänen kauppapuisto, Leväsen by as well as centre, retail Herman of phases first the of completion the 2011. during increased space vacant of amount The centre. Viestikatu its of development the continue to planning hospital currently is and company The university areas. the to close areas, two Kuopio’s Technopolis in found are offices modern centre, city the to In In 2011,addition or completed started. were completed. no new projects were projects development new four when through 2011 in increased supply space retail Kuopio’s 2010, in significantly grew stock office Kuopio The

The Finnish Property Market 2012 59 The Finnish Property Market 2012 60 publication publication The sponsors of this support characterise Helaba’s approach to business and and business to markets. approach Helaba’s characterise customer support LT-oriented scale. an European and a flexibility on expertise, and Proven Germany in lenders property 34 EUR billion about (09/2011), the is bank one of the largest of estate real commercial in book loan a With bank. the for crisis. reliable a the and market position has financial it maintained throughout achieved has Helaba (09/2011), billion 173 EUR exceeding assets total with lender sheet balance a United As the States. and Europe Germany, in institutions and banks corporations, to services financial of range broad a provides http://en.uuttahelsinkia.fi or hel.fi developers and investors looking for real estate projects. www. that for looking are a We new location. for support also provide thebusiness conditions of the tocityinvestors regarding and companies consultation offers Helsinki of City The Europe Asia. and between hub business important an increasingly are Russia. We have a long history of doing business in Russia and hundred one than more of million people. We market share with our and history both Scandinavia developing rapidly a is which Finland. Moreover, we are at the heart of the Baltic Sea region, green a and stable environment. in educated infrastructure advanced highly by supported most workforce Europe’s businesses offers Helsinki sizes. locatedStrategically in the of crossroads East and West, all of organisations welcomes Helsinki companies, innovative www.capman.com exited. been have 30 about made which of has out investments, Estate 90 approximately Real CapMan 2005, Since Sweden. and Finland in with particularly investments estate real in extensive experience has professionals countries, Nordic the management in networks 20 excellent asset comprising and team, The investment developments. property and which estate funds, invest in and commercial hotel properties Exchange since 2001. Stock Helsinki the on listed been has and 1989 in established was CapMan Helsinki, Luxembourg. in and Moscow Oslo, people Stockholm, 120 approximately Altogether, employs funds. CapMan and team investment dedicated own its has which of each – Estate Real CapMan CapMan and Market Russia, Public CapMan Buyout, CapMan – partnerships investment key four has CapMan €3.1 of billion. management Real Estate has always been a highly important feature feature important a highly been always has Estate Real Helsinki is the commercial, political and cultural capital of real equity private four manages Estate Real CapMan private equity firms in the Nordic Nordic the under assets with Russia, in and countries firms equity private leading the of one is Group CapMan Lnebn Hessen-Thüringen) (Landesbank Helaba bank wholesale German The As a prime location for for location prime a As business. international for hub dynamic a is area Helsinki The Setting • management Location • Networking • alternatives Entry • analysis Opportunity • Information • collection Data • companies: international for Services partners. international and regional with networking active through level national a on attraction Investment Direct Foreign the coordinates and location, develops and investment an as Finland on information in organisation provides The companies Finland. in foreign opportunities assist business to finding is functions primary its of hyykiinteistot.fi www. visit: please information, more For flourish. receive activities customers business their help its to HYY service 24-hour responsive, ensures attentive, Ltd, arm, Kaivopiha service concept. Kiinteistöt’s service outstanding an transportation. private are and public by properties accessible easily HYY and located All centrally education. for and space offices, of m2 housing, 278 14 Etu-Töölö, station. in railway Domus owns main also It Helsinki’s opposite space retail and of m2 741 32 Kaivopiha, owns HYY Helsinki. inEtu-Töölö and service CBD estatethein real best thewith future www.helaba.com to opportunities. forward looks and market Finnish the of profile international and Helaba environment investor-friendly investors. the values international stock-listed and for companies financings property arranged Helaba Finland, In has 2006. since Europe continuously bank the Northern for region target States. a been United the and Europe in approximately EUR 22 billion and has about 590 employees employees 590 about has and billion 22 EUR approximately worth assets manages company The Europe. in companies estate real major the of one is AG), which Immobilien (IVG 600 ca. and meters sq. operating in them.customers 202,000 to amounting facilities assets under management has worth of company EUR 372.6 million with The leasable Funds. IVG by owned properties manages also Polar IVG area. metropolitan Helsinki the in development and leasing owning, premises office on focuses the www.investinfinland.fi to markets. Finnish entry smooth and fast your ensures Finland in Invest HYY Kiinteistöt complements prime location with with location prime complements Kiinteistöt HYY properties commercial on focused is lending Helaba’s IVG Polar is a member of the German IVG group group IVG German the of member a is Polar IVG

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opn fudd n 92 Te company The investment 1952. in estate founded real company a is Ltd Polar IVG services business services for international companies. One One companies. business international for services provides consulting professional and Finland opportunities in Invest prime commercial space space commercial prime customers its offers Estate) HYY Kiinteistöt Real (HYY prime office office prime offices in Helsinki, Tampere, Turku, Oulu and Joensuu. Its Its Joensuu. and Oulu Turku, Tampere, Helsinki, in offices Stockholm, in with Finland, in employees 140 about headquartered has Newsec Sweden. is which Group, Newsec solutions. and management management, estate real corporate property and asset as well as services finance corporate and consultancy estate real analysis, and valuation investment advisory transaction and leasing brokerage services, www.ncc.fi Method. Assessment Environmental BREEAM international the uses in level the Additionally, company corporate Programme. Building the Green EU’s on partner a as approved been has Development Property NCC developer, property European first the As Euromoney. by magazine financial years international the consecutive four for developer property best the as elected been has Development parks, Property retail NCC other projects. business and are centres shopping products headquarters, company main NCC office retail, housing. combining and construction purpose multi-use for concepts business new developing in active been has it Recently, properties. the of lifecycle entire the for provides services and premises logistic and retail office, leases and persons. 2,700 it employs and Roads. million, in905 at NCCFinland EUR stands turnover annual NCC’s and NCC Development Construction, Property NCC NCC are Housing, Finland in areas business company’s The infrastructure. of types other and structures engineering civil builds roads, housing, and facilities, industrial projects offices, property develops commercial NCC and employees. residential 17,500 with billion 5.8 EUR development and housing In2011, totalled region. sales Nordic inthe annual companies leading the of one is company www.kiinko.fi businesses. their and customers its of needs the into insight excellent Education Estate Real service KIINKO gives developers, This financiers. and end-users, investors and – providers industry the in players construction and estate industries. real executive- the in and operating management leaders level middle for services and education training professional higher of range wide a offering 15.2 billion. EUR of a volume to amounting mandates and funds manages IVG In investors. institutional investors, private for funds for closed-end the with combination funds property tailored of provider IVG is the leading segment, In the fund oil gas. and IVG and storage caverns for constructs operates underground with a market value of EUR 4.1 billion. Germany, In northern local branches, IVG manages, inter alia, on balance properties of Via this cities. network and European in 19 major German Founded in 1989, Newsec Finland is a part of the the of part a is Finland Newsec 1989, in Founded sells develops, acquires, Development Property NCC all together brings concept unique company’s The Newsec offers a wide range of integrated integrated Newsec offers services. advisory professional of range wide a offers Newsec NCC offers future environments for for The environments communication. and living future working, offers NCC Finland’s Finland’s leading training company is Education Estate Real KIINKO for the entire life cycle of the property in a responsible, responsible, a in way. efficient and property customer-oriented the of services cycle life rental entire the and for management property management, residential estate real provides of space in Arenna Finland. and commercial metres square million four over of value the increasing and managing of charge in is Arenna experience, of decades With services. management property providing names. own their under and before isBoth about 400. companies will continue their businesses as real and estate manages over premises housing 70,000 units. The combined office staff and commercial of metres square million ten over manages entity new The million. 35 EUR is 2011for companies two the of turnover combined The Oy. Arenna with forces join will Oy Ovenia subsidiary Group’s 2012.Oy’s shares January As a of result this Ovenia acquisition, Arenna of cent per 90 over acquired has Oy Group Ovenia Cycle services Life • services Leasing • Management Property • Management Asset • portfolio: service Ovenia’s Oulu. and Kouvola Kuopio, inHelsinki, Turku,offices Lahti, andhas Tampere, Jyväskylä, professionals employs 180 company The property the market. from services facility all optimising and purchasing on based is model sought-after business Ovenia’s a employer. and is partner business Ovenia business, management in property supplier responsible and skilled a As customers. the with work active on based is success Ovenia’s clients. corporate www.newsec.fi market. estate real the of knowledge superior its has of Newsec depth operations, and various breadth the with and volume, great this Through properties. 1,000 over manages and assignments million. 65 EUR ofabout revenue annual and employees 500 over countries, six in operations own its has Today,Group the partners. its by owned is and 1994 in founded was Newsec occupiers. and investors owners, business property to Transactions areas and Management Asset within Advice, services its of range comprehensive a offers – Europe industry. estate real the within workplace best the is and Finland in workplaces top the among time fifth the for nominated was Oy Finland out carried 2012 survey by the Place to Newsec Great Finland, Work a Institute® In corporations. and investors estate real international and Finnish leading the among are clients Arenna Oy is one of the major companies in Finland Finland in companies major the of one is Oy Arenna successful of hundreds out carries Newsec year Every Newsec – The House in Full Property Service Northern

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The Finnish Property Market 2012 61 The Finnish Property Market 2012 62 Merchant Banking division, is responsible for real estate estate real and finance for structured including financing, clients and offers responsible is division, Banking Merchant Helsinki. central in based employees 400 has as institutions has Group 17,000about The customers. employees. and corporations 2,600 and customers SME 400,000 customers, private 4,000,000 has SEB worldwide. business isSEB’s inreflected its presence in some 20 countries to corporate offering on corporate and institutional clients. full-service The international nature of a focus on based strong banking a investment range and have wide a and operations advice bank’s Germany and the Norway financial Finland, Denmark, In offers services. other of countries Baltic the and www.sato.fi million. 86.8 EUR Group’s was profit Operating million. 52.1 EUR was taxes before The profit and million companies. 232.0 EUR was 2011 in insurance turnover other and insurers properties investment the million. 122.3 EUR was of review under year the during values in difference the in increase The million. 30 EUR roughly averaged has housing of 115 EUR divestment its and averaged million, has century needed. be always will Homes of SATO’s business. stability the fosters housing for demand and on Continuing the properties business. rental investment regenerate. to ability the as well as methods operating of re-evaluation requires constant the This shareholders. its for value as added well facilitates generating as services which customer market, of improvement the constant the in player progressive and 1.9 billion. EUR ofroughly value afair have assets investment Its Petersburg. St. in and growth urban of centres owns a total of homes rentable in some largest 23,000 Finland’s www.rakli.fi visit: information, more For co-ordinate committees Infrastructure The and and procurement. asset management finance, investment and Development. Urban Properties, and Public and Commercial Properties, Residential are branches The committees. three professionals. and construction number organisations property together brings association The member in total. 220 around and sector, public the and private the both represent members The Finland. in providers owners,and investors infrastructure and management service E Cmeca Ra Ett, hc i a at of part a is which Estate, Real Commercial SEB today and 1994, since Finland in present been has SEB pension Finnish are shareholders biggest SATO’s The value of SATO’s annual new in investments the 21st of in value on the trend is based creation SATO’s value efficient most the being of goal the set has SATO and branches three into divided are activities RAKLI’s prominent real estate, residential building building residential estate, real most prominent the representing association trade and group interest an is Clients Construction and Owners Building of Association Finnish The group. As group. a relationship bank, SEB in Sweden services financial Nordic leading a is SEB AO s n o Fnads leading SATO housing. Finland’s in investors of corporate one is SATO properties is conducted in strategic locations in Sweden, Sweden, in www.skanska.fi Finland. and locations Denmark strategic in retail conducted is volume and properties facilities logistics of development The Finland. Helsinki, and Denmark of Sweden, region in Copenhagen the regions metropolitan large three the on operations focus Office warehouses. retail offices, and within facilities projects logistic property in invests and develops initiates, which Nordic, Development Commercial Skanska people. 3,360 about employed company the and billion, 1.0 EUR were 2011 in operations Estonian residential and Finnish and Skanska’s Skanska’s for sales combined The services development. Estonia construction In comprise activities construction. environmental civil and and services services, building Construction construction, building include partnerships. public-private development and project commercial and residential services, 2011 in totalled over 13EUR sales billion. Skanska’s Exchange, Stock listed Stockholm the and on Sweden Stockholm, in Headquartered America. Latin and in States United employees the Europe, in 52,000 markets home has select currently Group green The Green for solutions. choice global first client’s a be its to aims Skanska on experience, and Based projects partnerships. residential public-private and construction, commercial in of expertise development with groups construction and www.seb.fi or com www.sebgroup. 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Kiinteistö Vuokralainen Vuokrasopimus Vuokra Kiinteistösijoitusyhtiö kiinteistöyhtiö Keskinäinen kiinteistöyhtiö Kiinteistöosakeyhtiö, Asunto-osakeyhtiö Osakeyhtiö Kauppa hoitokustannus / Ylläpitokustannus Tuotto Sijoitus Vuokranantaja Tuottovaatimus Vero Kiinteistörahasto eläkerahasto Eläkevakuutusyhtiö/ Kauppakeskus myymälä(tila) Liiketila, Toimisto(tila) Teollisuus Tuotanto Logistiikka Varasto Hotelli Asunto Rakennus Tontti

The Finnish Property Market 2012 63

Photos: Sponsor companies’ archives companies’ Sponsor Photos: 978-952-9833-40-5 ISBN: +358Fax: 7430 20 131 Tel: +358 7430 20 130 Helsinki 28, Eerikinkatu Finland KTI Publisher in co-operation with: co-operation in

The Finnish Property Market 2012 65 The Finnish Property Market 2012 66 IVG Polar, KIINKO Real Estate Education, NCC, Newsec, Ovenia, RAKLI, SATO, SEB Group and Skanska. and SATO, Group SEB RAKLI, Ovenia, Newsec, NCC, Education, Estate Real Polar,IVG KIINKO Finland, in Invest Estate, Real HYY Helaba, ofHelsinki, City CapMan, with: co-operation in Finland KTI