The Finnish Property | 2017 Market 2017

THE FINNISH PROPERTY MARKET 2017 KTI Finland in co-operation with: City Helsinki; of KIINKO Real Estate Education; Newsec;LocalTapiola; Ovenia Group; RAKLI; SEB Group; Sirius Capital SATO; Partners and Skanska.

The Finnish Property Market | 2017

Contents

Preface 7

1 The Finnish economy 8 1.1 The structure of the economy 8 1.2 Outlook for the Finnish economy 10 1.3 Finnish public finances 13 1.4 Finland’s international competitiveness 15 1.5 Main city regions in Finland 17

2 Institutional aspects of the Finnish property market 20 2.1 Two forms of property ownership 20 2.2 Market practices of property investment and renting 21 2.3 Planning 22 2.4 Taxation in Finland 24 2.5 Legislation for indirect property investment 27

3 The Finnish property investment market: volumes, structure and players 28 3.1 Investment market in 2016 28 3.2 Ownership structure 29 3.3 Real estate service sector 40

4 Property sectors: market structure, practices and investment performance 43 4.1 The office market 43 4.2 The retail market 48 4.3 Rental residential sector 53 4.4 Public use properties 59 4.5 Industrial / logistics market 61 4.6 Hotels 62

5 Property markets in different regions – outlook for 2017 64 5.1 The Helsinki metropolitan area 64 5.1.1 Helsinki 66 5.1.2 Espoo 72 5.1.3 Vantaa 74 5.2 Other growth centres: Tampere, Oulu, Turku, Jyväskylä, Lahti and Kuopio 76

Key terminology 81

The sponsors of this publication 82

Preface

The Finnish Property Market 2017 discusses the structure, players, market practices and conditions in the Finnish property investment market. The report aims to satisfy the information needs of international investors and other players interested in the Finnish market.

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

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

This publication is sponsored by 10 companies and organisations representing the Finnish property investment, development, management, finance and advisory sectors. KTI wishes to thank our sponsors: The City of Helsinki, KIINKO Real Estate Education, LocalTapiola, Newsec, Ovenia, RAKLI, SATO, SEB Group, Sirius Capital Partners and Skanska.

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

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

Hanna Kaleva KTI Finland

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

7 8 1 The Finnish economy Basic about Finland facts Parliament Niinistö Sauli Republic, of President State of Head governance and History Currency tries indus exporting important Most capita per GDP ECONOMY cities important Other Capital city Religions Languages Population PEOPLE Distances area Total GEOGRAPHY - Social Democratic Party (35). Party Democratic Social (37) The and Party Coalition National (37), The Party Finns (49 The seats), Party Center The parties: Biggest parliamentCurrent in elected 2015. 4years. for elected members, 200 chamber, One 2012) (since 1995 since Union European the of Member 1917 since democracy Independent 2002) (since Euro goods electrotechnical and Electronics equipment and Machinery Metal and engineering products products industry paper and Forest Chemical products industry €38,162 (2015) Kuopio, 118,000 Lahti, 119,000 139,000 Jyväskylä, Turku, 188,000 Oulu, 200,000 219,000 Vantaa, Tampere, 228,000 274,000 Espoo, biggest the being Vantaa and –Espoo municipalities neighbouring 13 and Helsinki comprising 1.5Helsinki region, million inhabitants inhabitants 635,000 Helsinki, Orthodox 1.1% 73.0%Lutheran 6.0% by spoken languages Foreign 5.3% by spoken Swedish, 88.7% by spoken Finnish, languages: Two official 2 per square kilometre Finland): (northern region Lappi 178 per square kilometre Finland): (southern region Uusimaa Helsinki 2,933 per square kilometre kilometre square per inhabitants 18 Density: million 5.50 west to east km 540 south to north 1,160 km 338,000 square kilometres of industrial production has decreased, while that of services that of services while decreased, has production of industrial share the years, past the economy.Finnish However, during of the growth on the impact agreat had has production industrial exports, Finnish for importance great its to Due estate services. real well as as communication, and information transportation, trade, being sectors important most the services, of all thirds two some up make services GDP.Finnish Private of the 70% some for accounted economy. 2015, In services Finnish of the sector biggest the currently are Services 2000’s. early and late 1990’s the during economies competitive most world’s of the one into Finland transformed reforms structural and innovation growth, Strong decades. few last the during rapidly proceeded has but countries OECD other inmost than later started industrialisation where economy, stable and well-functioning open, is an Finland 1.1 structure The of the economy economy1 TheFinnish for investment goods has been depressed by weak economic economic weak by depressed been has goods investment for demand as difficulties, about brought has exports Finnish in goods of investment share abig years, past the During declined. has exports of share the and deteriorated, has production industrial of Finnish competitiveness however, international the crisis, financial global the Since 45% in 2008. some was GDP the of of exports share the highest, At its of 2000’s. years early and 1990’s in the economy Finnish of the growth strong the in role important played an Exports growth. on economic impact aprofound have in exports changes and is crucial, economy Finnish the for trade of foreign importance The increased. has industries of chemical share the while decade, past the during in importance decreased have industries electrotechnical and forestry sectors, industrial main the Of production. industrial of total 20% approximately for accounted both industries forestry and Chemical industries. technology information and industry metals industry, electrotechnical and electronics engineering, mechanical include industries metal within categories biggest The production. 41% some for industrial total accounted of the which industries, in 2015 metal was sector industrial biggest The 20%. some to GDP. Finnish of the 30% 2015, fallen By some has share its for accounted production industrial In2000, increased. has ”Services account for some ”Services 70% of the Finnish GDP” ”The Finnish”The economy is dependent on exports” ins oeg rd ytre raFinnish sector by industry exports Finnish foreign by trade target area Uusikaupunki. In 2017, the production will accelerate again again In2017, accelerate will Uusikaupunki. production the in factory Valmet in the Automotive of cars production in the break temporary the to due vehicles, of transport exports the in decline the by caused mostly was However, decrease the year. previous the with 4% some by compared decreased of goods exports Finnish of the volume In 2016, total the (15%). (17%) industries industries metal and paper (some and exports),pulp 19% of total industries chemical included industries exporting GDP. biggest The 38% Finnish of the some for accounted 2015,In exports exports. service Finnish for characteristic are skills engineering and technology high requiring Services exports. of all third one almost represented In2015, years. services in recent steadily increased has exports of all of services share The exports. total of 29% the some represented goods investment In 2015, markets. target important in many conditions 10 12 14 16 % 0 2 4 6 8

1995 1996 USA Sweden 1997 1998

1999 Finnish economic structure 2000 2001 2002

2003 The Netherlands Russia Public services ■Privateservices ■Publicservices ■ManufacturingConstruction production ■ Primary 2004 2005 2006 2007 2008

2009 Germany 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 2015 Source: FinnishCustoms 2010 2011

2012 100 90 80 70 60 50 40 30 20 10 0 2013 2014 2015 1–11/ 2016 manufacturers in the vehicle industry in the world. in the industry vehicle in the manufacturers contract largest of the one is currently company the and Finland, in Western employment and growth economic the supported years, in recent has, growth Valmet Automotive’s years. coming in the growth asignificant to turn to exports of Finnish volume total the support to is expected this and the recent US presidential election. presidential US recent the and Brexit to related protectionism increasing for risks and by, uncertainty caused instance, for exports, Finnish the for outlook the with associated risks however,are, significant in 2017. accelerate to There is expected of exports volume the sectors, industrial important other on several Also 10 15 20 25 30 35 % 5

2000 Other products products Chemical industry products industry Forest products industry andtransport Machinery products Metal industry products industry Electric andelectronics

2001 positive” more turning exports 2002 ”Outlook for the Finnish 2003 2004 2005 2006

2007 Source: StatisticsFinland 2008 % 2009 2010

Source: FinnishCustoms 2011 2012 2013 2014 2015 1–11/ 2016

9 1 The Finnish economy 10 1 The Finnish economy to the latest estimates, private consumption increased by by increased consumption private estimates, latest the to According construction. and consumption onprivate based mainly was economy Finnish of the 2016,In growth the increased. were years coming the for forecasts economic and positive, more became 1.6%some in 2016. year, of the Towards end the outlook the was growth GDP the estimates, latest the to According signs. show positive to started 2016, economy the During system. education and infrastructure well-functioning the to thanks stronger, is however, competitiveness term, economy. longer the In in the changes structural and in costs increase the to due deteriorated has competitiveness short-term The of 2008. level peak the reached not still has of production volume absolute the this, to at Due 0.3%. territory, in positive slightly just ended year, in 2015, and growth every GDP the decreased 2012 2014, production and total Between the 2010 2011 and years which slight showed growth. only after by 8.3%, collapsed GDP the in 2009, crisis: financial global the since ever sluggish remained has growth GDP Finnish 1.2 Outlook for the Finnish economy exports. of 7% Finnish some for accounts 2015. USA The 6% in than less was and years, in recent steadily declined has of Russia share The 14some 10%, and respectively. of shares with Sweden and Germany are countries target biggest in2015. two The exports of total 59% for accounting countries, EU other to go exports of Finnish majority The ”Finnish economy showing showing economy ”Finnish positive signs” positive and production output for the first half of 2017. half first the in for Also output production and sales their for growth moderate anticipated survey the to responding companies The gradually. improve to expected was outlook business general the EK, Industries of Finnish of Confederation Survey Tendency Business In a recent cities. major in all strong remains housing for demand the as inparticular, construction residential active the by boosted was year. Construction previous the to compared 6.5% some by increasing investments in 2016, construction economy with Finnish of the growth of the drivers main of the one was in construction Growth 3% in 2016. some by increased investments private total, In development. positive showed all development and research well as as equipment, and machinery infrastructure, in construction, investments categories: in all increased investments Private temporary. be to is expected decrease the year, but previous the to compared slightly decreased exports of Finnish volume The low inflation. and employment improving by supported increased, of services sales and 2.1%. trade some retail Both years. Private consumption will continue to grow moderately moderately grow to continue will consumption Private years. in recent than based broadly more be will growth 2%. The 1and between varying figures growth GDP annual with is forecasted, growth 2017For moderate 2018, but and astable 2017.and January 2016 October between markedly improved had indicators outlook sectors’ industrial and service Also expectations. positive most the had sector construction survey, this boosting the Finnish economy” ”Construction sector is ”Construction

Photo: City of Helsinki continue decreasing in 2017; decreasing in continue however, decline rapid any to is expected rate unemployment The in particular. sector construction in the increased Employment 8.6%. at some stood rate Unemployment 69%. to at close ending rate employment overall the 2016, in with improved Employment deteriorate. also might confidence domestic materialise, not does ifthis and exports, in growth upon is dependent outlook positive The growth. GDP Finnish the with associated risks however,are, various in 2016. than There at aslower pace although continue, to is expected in construction 4%. Growth some by increasing continue to expected are investments corporate EK, to According accelerate. to is expected in exports growth and ”Unemployment decreased in in decreased ”Unemployment Unemployment rate in Finland and in the Euro area 10 11 12 13 14 15 16 % 6 7 8 9 GDP growth in Finland growth andGDP in the Euro area 1996 -10 2016” -8 -6 -4 -2 % 0 2 4 6 8 1997 1990 Finland Euro area (19countries) area Euro Finland 1998 1991 1992

1999 (19countries) area Euro Finland 1993 2000 1994 1995 2001 1996 1997 2002 1998 2003 1999 2000 2004 2001 2002 2005 2003 2006 2004 2005 outlook, inflationary pressures are starting to increase increase to starting are pressures inflationary outlook, Together improving the with years. low in recent very remained has inflation conditions, economic weak to Due demand. the meet not does supply the and workforce, at skilled targeted is is mainly unlikely, demand the unemployment as loans. Due to the rapid growth of indebtness, the Bank of Bank the of indebtness, growth rapid the to Due loans. is housing debt of all majority vast The income. of disposable 126.9% at €142 stood represents billion, which households Finnish of the of loans ofamount 2016, total the quarter third of the end At the increased. thus has wealth net the and have grown, of households assets financial the time, same At the countries. other many with level compared at amoderate stands it still but years, in recent markedly increased has households of Finnish indebtness The 1.5% at 2017 some in both moderate, 2018. and remain to is expected rate However, inflation oil price. stabilised the by supported also are prices slightly. Consumer 2007 Source: Eurostat,OECD,IMF, MinistryofFinance 2006 2007 Source: Eurostat,Bank ofFinlandandStatistics 2008 2008 2009 2009 2010

2010 **Forecast *Preliminary 2011 2011 2012 2013 2012 2014 2015* 2013 2016** 2014 2017** 2018** 2015

2016 11 1 The Finnish economy 12 1 The Finnish economy Key figures –Finnish economy Private consumptiongrowth, % Unemployment rate, % Inflation, % Change inexports,% GDP (changeinvol), % *Estimate **Forecast Business tendency indicators indicators Business tendency -80 -70 -60 -50 -40 -30 -20 -10 10 20 30 40 % 0

2003

2004 Services Construction Manufacturing

2005 Volume index 1990=100, seasonally adjusted seasonally 1990=100, index Volume Main of components demand

2006

2007

2008 100 200 300 400 500 0 2009 1990 -20.1 2009

2010 -8.3 -2.7 8.2 0.0 1991 2011 1992 1993 2012 Exports TotalExports demandConsumptionInvestment

0021 0221 0421 2016 2015 2014 2013 2012 2011 2010 1994 8.4 1.2 3.1 . 2.6 3.0 6.2 2013 1995 1996 2014 1997 Source: EK 1998 3.4 2.9 2.0

2015 7.7 7.8 1999 2016 2000 2001 -1.4 1.2 2.8 . 05-0.6 -0.5 0.3 2002 2003 wage increases for 2017 and the transfer of some employer employer of some 2017 for transfer the and increases wage year, per zero 24 by hours hours of working lengthening the include Pact of the contents key The adjustment. fiscal support and growth economic boost thereby and industries exporting Finnish of the competitiveness the support is to of which objective main the Pact, aCompetitiveness initiated 2016,In government Finnish the countries. peer most with compared productivity of development weak and costs inlabour increase the to due mainly deteriorated, has industries exporting Finnish of competitiveness The drivers. global and domestic both by pressured been has economy Finnish the years, recent In markets. financial of the stability the for arisk as loans of housing amount the now considers Finland 2004 2005 08-0.6 -0.8 8.2 1.5 1.1 2006 2007 ”Competitiveness Pact aims Pact ”Competitiveness

at supporting the Finnish 2008 2009 -2.7 exporting industries” exporting 8.7 1.0 2010 2011

Source: Statistics Finland, Ministry of Finance of Ministry Finland, Statistics Source: 2012 2.0* 020.4 -0.2

. 1.2 1.5 2013 0.3* 9.4 Source: StatisticsFinland 2014 2015 Q3/2016 8.8 1.0** 1.6** 2017** 8.5 . 1.3 1.3 2.4 0.7 0.9 2018** 8.1 1.0 3.2 0.6 government, local government, and social security funds. funds. security social and government, local government, central of the consists inFinland government General deficit. the reduce to in order is pursued consolidation fiscal substantial though even increase to continues debt government general that the means This ofdecade. this end the until negative remain is likelyto and 2009, since in deficit been has budget government economy. The of the change structural the and conditions economic weak the to due years few past the during significantly increased have finances public Finnish by faced Challenges 1.3 Finnish public finances consumption. public and private of both growth the it limits as slightlynegative even be will impact Pact’s the term, shorter the In run. longer inthe only although growth, economic Finnish support to is expected Pact The workforce. Finnish of the 90% than more covers Pact the federations, employers’ and unions trade main the Through expenditures. public further any cutting from refraining and tax income some cutting to committed has government the Inreturn, employees. to contributions Indebtedness ratio of Finnish households Finnish of ratio Indebtedness 100 110 120 130 % 40 50 60 70 80 90 *Forecast 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: StatisticsFinland 2011 2012 2013 2014 2015 2016* 2017* 2018* employment situation. employment improving the through neutralised be will impacts Pact’s the term, longer the In deficit. the cut to is expected not economy improving the and cut, are taxes income well as as payments security social some as Pact, Competitiveness the by pressured be will position financial sector’s public the -2.3%. at some However, end to in2017, estimated was which deficit, of the contraction the supported growth economic 2016, In the reduced. was benefits security social and of pensions growth the and decreased was workforce sector of public number the cut, were investments Public measures. savings government’s the by threshold the under pushed was in2014. time 2015, In deficit first the the for value reference 3% the exceeded deficit government general Finland’s of unemployment. costs public increasing to due a deficit show funds security social Other environment. investment achallenging and out paid of pensions amounts increasing both to due decreased has However,income. surplus this investment and workforce Finnish of the payments pension both from revenue consistent their to thanks slight surplus in a remain funds related pension funds, security social the Of decade. of the end the until so remain to expected is and negative turned also has balance government Local revenue. intax fluctuations cyclical to sensitivity its to due years in recent development negative most the shown has government central the areas, three these Of reforms. Public spending will be increased as the ageing of ageing the as increased be will spending Public reforms. structural some requires ratio debt 60% the Achieving countries. EU other in most than lower clearly remains still debt government of general amount the years, in recent slightly, increase 61.6%. the some to Despite decreased ratio debt the growth, GDP the and of debt amount decreasing at €131 stood debt slightly the both to However, billion. due government of general of 2016, amount the quarter third the in2015, 63%. of at end some GDP At the of the ending 60% of threshold the exceeded debt of government amount The years. in recent increase to continued has debt public The ”General government”General deficit is expected to decrease”

Photo: City of Helsinki / Tero Pajukallio 13 1 The Finnish economy 14 1 The Finnish economy employment, knowhow and education, welfare and health, health, and welfare education, and knowhow employment, and competiveness include areas focus The projects. leading called so various pursue they which under areas, focus six in 2015, program in its election defined parliamentary the after started which government, current The finances. public of Finnish sustainability the in ensuring essential are responsibilities municipalities’ in the reforms structural Therefore, services. healthcare in burden cost the increases which population, ageing an and balance migration anegative face that municipalities smaller the by faced are challenges economic biggest the significantly, most municipalities: of the size of the development in the seen are differences Significant position. financial and structure economic size, their to regard with significantly other each from differ Municipalities 311 inFinland. currently municipalities are There social services. and healthcare education, of, instance, for majority the for responsible are Municipalities level, in municipalities. local at the out is carried welfare of social provision actual the of most and implementation, their monitors and welfare of social principles basic and framework the sets government central the system, Finnish Inthe services. in public role asignificant have currently municipalities Finnish Belgium. and France by Denmark, exceeded only was This in 2015. at of 44% GDP stood and countries, OECD the in highest the is among in Finland rate tax The of taxation. level onahigh based is largely society welfare of the Funding production. 58% of total some for accounts and OECD, in the highest is the GDP of ashare as expenditure government aresult, As society. welfare social Finnish of the cornerstones the are funding tax and responsibility public Extensive categories. income in all used is widely which provision, day-care municipal and families all for allowances of child forms in the families for support social healthcare, and education free instance, for including, services, of public supply comprehensive on a based is largely society welfare Finnish The support. sector public through economy the boosting and payments security social in changes provision, service inpublic reforms structural instance, for include, finances public the of supporting means Other increased. be to needs productivity that means which workforce, in the reduction the through reduced being currently are costs employment sector Public increase. or, must cut, income alternatively, be to have expenses public other Therefore, payments. pension increases population the on acomprehensive supply of ”The welfare is society based”The through six focus areas” through six focus ”Current government”Current is pursuing theirpursuing program public services” as well as increased freedom of choice for citizens between between citizens for of choice freedom increased well as as costs increasing the over control improved include reform service social and healthcare of the objectives main The counties. of the culture and identity the promoting and of regions use of the steering and planning enterprise, of business promotion the to related tasks and duties development regional issues, environmental services, rescues for responsible be will counties new the services, social and healthcare to Inaddition history. Finnish the in restructurings administrative ever biggest of the is one of 2019. reform beginning in the The counties self-governing 18 to municipalities from transferred be will services social and of healthcare organisation The structure. government regional of the development profound includes also reform The services. healthcare and of social provision and management of the restructuring is the agenda government’s current in the reforms significant most of the One term. longer in the economy public the benefit to expected are but term, short in the spending public increase will projects leading of these Some provision. service inpublic reforms well as as services, of public digitalisation and inregulation economy,bio /clean reforms or municipal federations. A separate company has been been has company Aseparate federations. municipal or municipalities Finnish the by owned currently are properties of these Most billion. €4-5 some be to is estimated which of value technical current the properties, healthcare public of financing and ownership the impact also will reform The providers. private and public both comprise will which centres, health and social accepted the among provider service healthcare the choosing for framework the outlines bill The of choice. freedom client’s the concerning bill is the reform in the of regulation pieces of 2019. important most of the beginning in the One operations start will 2018, in early counties and elected be to planned are councils county first on 1July. The force 2017, in early Parliament the to into come to and submitted be to is expected reform the concerning legislation The billion. €3 is some saving cost annual aimed The providers. service healthcare for systems information improved and digitalisation well as as competition, increased management, centralised through increase to is expected services of the Productivity providers. service sector private and public responsible for healthcare and ”A major regional government properties will leftproperties be vacant” proportion of healthcare ”New counties”New will be ”Due to the reform,”Due a reform is underway” social services” other hand, Finland’s strong institutions and highly skilled skilled highly and institutions strong Finland’s hand, other the On indebtness. public increasing and outlook economic weak onthe based were ratings of the downgradings recent The is negative. outlook the & Poor’s, Standard to according whereas, is stable, Finland for outlook the that state Fitch and Moody’s Both /AA1. at AA+ category, best second the in Finland rated all have Fitch well as as Moody’s, & Poor’s, slightly recently. Standard deteriorated have they although strong, remain Finland for ratings credit long-term The of citizens. welfare overall well as as economy of the competitiveness the regarding indicators at various looking rankings international in many position good its retains Finland competitiveness 1.4 Finland’s international defined. be is to yet finances municipalities’ onthe impact its and space excess of However, amount the period. transition the after vacant left be thus would and counties, the by needed be not will properties current of the apart that It is expected term. longer in the provision service their for needed premises the define will counties the this, After years. of three period atransition for municipalities the by operated and owned currently properties the all rent will counties the In addition, landlords. private from have rented that municipalities properties of the agreements lease all manage also will company The hospitals. central large mainly comprising federations, municipal by owned currently properties the manage and own to established

Photo: City of Helsinki / Antti Pulkkinen reforms in this area. in this reforms planned government’s the acknowledged report the although business, doing for factor problematic most the as identified is regulation labor Restrictive development. macroeconomic weak the to due mainly was ranking in Finland’s drop The world. in the two number education, science of math and quality in the one, and number ranked was Finland engineers, and of scientists availability the In market. financial of the development the well as as training and education higher education, primary and health include strengths Finnish Other framework. ofinstitutional the functioning the to regard well with perform to continued Finland ranking, In the Finland. outperformed years, in several time first the for and, position its now improved Sweden countries, Nordic in 2015. inplace eighth been other the having Of after countries, 138 the among evaluated tenth now ranked was year. Finland previous the to slightly compared deteriorated position 2016, Finland’s in September published Report, Competitiveness Global World Forum’s latest In the Economic low cost. at avery funding acquire to able be to continues government Finnish the ratings, deteriorated the Despite agencies. rating by the appreciated are workforce guarantee funding at funding alowguarantee ”Strong credit ratings ratings credit ”Strong cost” 15 1 The Finnish economy 16 1 The Finnish economy the winners from other countries. other from winners the differentiating factors the as of institutions transparency and positions in public of those behaviour the governing rules systems, information to access strong identified report The Zealand. New and Denmark after 176among countries, third ranked 2016, for was Index Finland Perceptions Corruption Global International’s In Transparency world. in the countries corrupt least of the one as is known Finland 10. top in the included all were Norway and Denmark Sweden, ranking, this In flexibility. market labour and of companies productivity instance, for through, is evaluated which efficiency, business emphasises ranking This place. 20th its retained of 2016, Finland Ranking World IMD’s Competitiveness In Index ranks FinlandIndex ranks 10 ”World Economic Forum’s Forum’s ”World Economic Global Competitiveness Competitiveness Global The mostThe competitive national economies in 2017 (ranking in 2016) the world” the OECD BetterLife Index 2016 United Kingdom(10.) The Netherlands(5.) United States(3.) Switzerland (1.) Hong Kong(7.) Singapore (2.) Singapore Germany (4.) Germany Sweden (9.) Finland (8.) Japan (6.) th ...... 5.9 5.8 5.7 5.6 5.5 5.4 5.3 5.2 5.1 5.0 in in – Finland– OECD– OtherNordics Source: OECDEconomicSurveyofFinland 2016 well as Legatum Prosperity Index, where Finland was 3th was Finland where Index, Prosperity Legatum well as as 178 among one countries, number ranked Finland where Index, State Fragile Peace’s for Fund well include performs Finland where conditions economic assessing rankings Other ranked number one, together with Sweden and Norway. and Sweden with one, together number ranked was Finland House, Freedom US the by liberties civil and rights of political study inarecent Also 149among countries. in international comparisons” international in least corrupt countries in countries least the corrupt system issystem highly appreciated ”Finland remains one of the ”The Finnish”The education GCI 2017score Source: World EconomicForum world” and 70% of all jobs. of all 70% and 75% some GDP Finnish of the represent currently areas city 14 75%. biggest atThese least to increase to expected is share their 2040, By regions. city 14 in the lived biggest 2015, by and population Finnish of the 69% areas, some in urban lived population Finnish of the 60% some In 1990, years. in recent in Finland fast proceeded has Urbanisation 1.5 Main regions city in Finland 2016. to compared improved ranking the prospects, in development Even “fair”. as regarded are development property for those whereas strong, rather remain investment for prospects 18thon the The place. 2017 Europe Estate Real in Trends Emerging report Institute’s Land Urban and Cooper’s Pricewaterhouse European markets. transparent” “highly six the among of 2016 Finland ranked Index Transparency Estate Real JLL’s world. in the Global transparent most of the one as is regarded market property Finnish The markets. property in the conducted comparisons inthe reflected is also environment business overall The of Finland. weaknesses main the as regarded commonly are regulations labour restrictive and rates tax High market. the of size small the with deal mostly in particular, perspective a business from of Finland, characteristics not-so-positive The living. and business support healthcare and education high-quality and framework regulatory stability, transparent economical and political where economy welfare Nordic a respected as reputation Finland’s illustrate rankings These 2 and cohesion” in “social one number was of 181 Helsinki out globally. ranking, Inthis cities 25 ranked was Helsinki IESE, by conducted comparison, in Motion Cities Inthe environment. the and infrastructure education, care, health safety, to related factors at 30 looks comparison The 140 cities. among 2nd ranked was Helsinki Cities, Liveable Global Unit’s Intelligence Economist In cities. global the well among ranks also Helsinki countries. EU 28 among place 2nd at high, the ranked was satisfaction life overall Finn’s the of life, of quality comparisons in Eurostat’s Also of citizens. satisfaction life overall and safety quality, environmental system, education of the accessibility and quality the example, for include, of Finland strengths the comparison, this In place. eighth at the ranked 2016, was Index Finland Life Better InOECD’s countries. in various of living quality the comparing well in reports ranks also typically Finland ”Well-functioning institutional institutional ”Well-functioning seen key as of the strengths framework and stability are ”Urbanisation in proceeds Finnish economy” Finnish Finland” nd in “environment”. ranked Helsinki th th Main regions city in Finland the 14 biggest city areas. city 14the biggest in is concentrated construction residential of the 90% some Currently, decreased. has apartments large and houses family single- for need the whereas markets, housing rental and in owner-occupied both increased has apartments located well- small, for demand The in Finland. markets housing on impact aprofound have preferences in housing changes and development demographic urbanisation, Increasing Residential demand in main regions city 1.2% only country. whole of the represents only 31% and area land the GDP as the even jobs of all 36% of 26% population, of the some represents currently region Helsinki The country. whole in the than younger is clearly in Helsinki population the average, On million. 1.7−1.8 to increase to is forecasted population the 2050, by and, 17−19,000 by annum, per increasing inhabitants been has region Helsinki of the population the years, recent In area. metropolitan Helsinki the form of Kauniainen, city smaller the with Vantaa, together which, and Espoo Helsinki, include region in the cities main The inhabitants. 1.4 some million accommodates currently which region, Helsinki inthe fastest be to is expected and has Growth migration. negative from suffering inregions provision service of public maintenance for, instance, for challenges the increases which population, working-age or young the towards weighted are moves Within Finland, immigration. and migration internal of both aresult be will and been has Urbanisation NLS’s permission is prohibited. Additions to the map by KTI. 2/2016. KTI. by map the to Additions prohibited. is permission NLS’s without data the Copying 2010. FInland of Survey Land @ National © OpenStreetMap contributors http://qgis.osgeo.org Project. Foundation Geospatial Source Open System. Information Geographic QGIS 2015, Team, Development -QGIS 2.12.2 QGIS using created Map 17 1 The Finnish economy 18 1 The Finnish economy 625,000 inhabitants by 2040. by inhabitants 625,000 of some increase an as result and accelerate, to is estimated regions 14 to city main migration scenario, “urbanisation” Inthe structure. regional on current based are estimates growth population scenario, “conservative” the In 2040. by 5.8 million to grow to is estimated population Finnish the scenarios, both In scenarios. different on two forecasts its bases of Finland Centre Technical Research 2015, VTT the in published 2040, by demand on residential study In its Significance of 14 regions biggestcity in Finland, %of total Completed dwellings (2010-2015) dwellings Completed Research and development expenditure (2013) (2013) GDP Private-sector jobs (2014) Jobs (2014) Jobs (2015) Population Share of population living in urban areas regions Geographical distribution of housing production in main city 2% 1% 2% 2% 2% 3% 2% 50 52 54 56 58 60 62 64 66 68 70 % 3% 3% 25% 1995 1991-2015

4% 1996 1997 6% 1998 7% 1999 30%

9% 2000 2001 2002 Helsinki region 2003 46.8 36.4 35.1 30.4 32.0 27.3 ■ Other ■ Kouvola ■ Pori ■ Lappeenranta ■ Hämeenlinna ■ Joensuu ■ Lahti ■ Vaasa ■ Seinäjoki ■ Kuopio ■ Jyväskylä ■ Turku ■ Oulu ■ Tampere ■ Helsinki 2004 2005 2006 likely – the need for new dwellings would concentrate in concentrate would dwellings new for need likely –the is more VTT to according –which, scenario latter the In 2007

3% 2008 2% 2% The regions of Tampere, Tampere, of regions The

housing demand in main city 2009 2% 4% 7% 2%

Turku and Oulu Oulu Turku and 2010 ”Urbanisation increases 2% 9% 1% 2011 1% 28.6 21.1 17.5 17.5 17.9 17.1 2016–2040 0% 2012 11% 5%

Source: StatisticsFinland 2013 regions” 2014 2015 48% Source: RT 14 biggest city regions city biggest 14 Source: Statistics Finland Statistics Source: 68.3 76.1 74.3 89.7 71.7 74.1 in 2013−14. New development was concentrated on main onmain in 2013−14. concentrated was development New than more in 2015 40% than 10% even more and is some which dwellings, 36,000 some to amounted and significantly increased starts construction in2016, residential developers; by apprehended been have to seems need increasing The increase. of the half almost represent would alone region Helsinki The cities. largest the towards weighted heavily be would demand residential in increase the scenario, this In annually. needed be would dwellings new 29,000 almost where regions, 14 city main for some 45%. some for accounted alone region in 2016, Helsinki the construction building of apartment starts the Of cities. in main housing rental of private supply increased as result will which demand, investment strong by is boosted development New houses. in apartment apartments smaller and cities, almost half of the increase in ”Helsinki region represents region residential boosts ”Growth of”Growth the Helsinki housing demand” housing development” New construction starts 2000–2016 starts construction New 10,000 15,000 20,000 25,000 30,000 5,000 0

2000 Apartment buildings Apartment Row houses Single-family homes 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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The owner is responsible for repair and replacement costs if caused by normal wear and tear. tear. and wear normal by caused if costs replacement and repair for agreements responsible is cleaning and owner The use. they electricity space own the their have regarding tenants and building, the of areas public the for responsible regards With typically disposal. is owner waste the and water electricity, heating, and with cleaning case to the also is This responsibility. owner’s the are maintenance and building the of management that areas means outdoor This and owner. the by indoor paid both are for costs expenses operational and taxes property insurance, rent, land the where are rents 1 Gross 39% ”Indefinite lease are terms 19% common” sqm 42% 1 ■ Untilfurthernotice ■ Fixed+untilfurthernotice ■ Fixedterm Gross rents are very very are rents Gross Source: KTIRentaldatabase fixed-period leases where the term exceeds three years. 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Taxable valuedefined Depends onmunicipalityandtype (0%). andperiodicals newspapers cultural events, etc.(10%);and medicine, books, transportation, (14%); and cateringservices Special ratesforfood, restaurant companies, etc. company shares, sharesinlisted securities suchashousing real property, buildings, Levied onprofitsfromselling N ote thus not favourable from an institution’s perspective. institution’s an from favourable not thus and taxation, corporate to is subject in property investing companies limited from income investment Correspondingly, fund. of the establishment the before authorities with details the negotiate to recommended it is therefore and business, fund’s of the nature onthe instance, for depends, companies Taxation met. of limited are conditions certain that provided status, tax investor’s the to according taxed is income investment and structures transparent tax are partnerships limited as structures, inthese drivers major are Tax issues partner. general is the company management fund the cases, in most where, partnership, is alimited investment property indirect for structure common most of view, point the investor institutional Finnish the From funds Property investment 2.5 Legislation for indirect property VAT with associated fraud. risk tax potential the at reducing aimed is particularly mechanism The basis. onacontinuous services construction offering companies VAT. for is responsible is applied on mechanism This services of construction buyer the that means This applied. is being mechanism charge however,sector, areverse VAT. paying for responsible construction Inthe generally is services or of goods seller the system, Finnish the In tax. final deductible is anon- buildings of residential charges service in the VAT, include not do rents included tax the residential As fully transparent for Finnish tax purposes. tax Finnish for transparent fully as considered are and entities taxable not are funds These fund. of the value total of the 50% to is restricted funds of these level gearing long-term The applied. be may periods long redemption relatively and frequency, subscription and redemption onthe limitations include may rules The rules. fund inthe stipulated are funds these from redemptions and in investments for company. Provisions management fund by aseparate managed structures open-ended are funds These Authorities. Supervisory Financial Finnish by the regulated are and (in Act sijoitusrahastolaki) Finnish, Funds Common Finnish the by stipulated are funds investment special These in property. thatinvest funds investment special of establishment the enables also legislation Finnish The targeted at private investors have significantly grown in ”Special investment”Special funds ”Property funds are often are funds ”Property structured as limited as structured partnerships” recent years” recent organised as normal limited liability companies. In recent recent In companies. liability limited normal as organised are that companies investment property residential major example, for are, There estate. in real investing companies in non-listed used widely is also structure liability A limited Hoivatilat. Suomen and House Investors include companies listed Technopolis Smaller plc. plc and plc, Citycon Sponda exchange: Helsinki Nasdaq of the list in main listed companies property significant three currently are There companies. normal as taxed are and Act Companies Liability Limited the by regulated are They companies. liability of limited form in the operate companies of property majority the context, Finnish the In companies Property properties). commercial and in residential investing (a fund Management lots); Property OP building and inresidential investing one and funds property (two residential Ålandsbanken property); incommercial another and properties care in investing (one eQ by fund managed those include in property investing funds investment special largest The funds. these to capital attracted have investments property of performance strong the and rates low interest as years in recent substantially grown have They investors. private at targeted extent, large to are, funds These companies. management investment and banks various by launched been have strategies varying with funds more several then, Since in late 2012. launched was framework this under fund first The Exchange since 2013. since Exchange Stock Helsinki of the list main onthe listed been have REIT Residential of Orava shares The framework. regulatory specific this under operating company only the currently plc, is Funds Orava by managed REIT, Residential Orava popular. very become not has framework the legislation, the by set provisions limiting the to Due foundation. of its years three within listed be to needs company The rules. accounting strict with comply to and dividends as profit of the 90% out pay to sheet, balance of the of 80% amaximum to capital debt its limit to properties, residential in rental only invest to companies the require of companies kinds these for transparency tax for provisions The properties. residential inrental investing companies for only given been currently has structures, REIT- known internationally resembling structure the companies, property listed tax-exempt for possibility The structures. in jointventure common more become also has structure company liability limited the years, 27 2 Institutional aspects of the Finnish property market 28 3 The Finnish property investment market: volumes, structure and players transactions volume, which increased to some 38%. some to increased volume, which transactions in properties of residential share large the to contributed funds, pension and funds of property investments residential of growth of SATO continuous and acquisitions portfolio major some with together transactions, These Y-Foundation. to units housing subsidised 8500 some sold also VVO sold. being apartments residential 2200 than more for VVO, by II accounting Fund Housing of ICECAPITAL acquisition the was transaction large exceptionally Another years. three past in the in Finland transaction property largest third is the This million. €576 for Forum, centre shopping sqm 40,000 the including block, Forum the acquired who Sponda, by out carried was year of the transaction biggest The demand. investment multifaceted the year, reflecting previous the to compared increased of transactions size average and 2016,In number the both €1.5 billion. exceeded volume year, transactions of the quarter of 2007. every In record previous the than 18% 35%. some of some It is also higher agrowth represents year, this previous of the €7.4 to in 2016. billion Compared level record anew reached volume transactions Property 3.1 Investment market in 2016 players volumes, and structure investment market: property 3 TheFinnish transactions carried out in out transactions carried ”Record amount”Record of market Transactions volume and turnover in the Finnish property ■ Transactions volume –– 2016” 0 1 2 3 4 5 6 7 8 1000 MEUR 2.0 2001 2.0 2002

2003 2.6 3.2

Turnover (transactions volume / professional property investmentmarket) Turnover property (transactionsvolume/professional 2004

2005 2.8

2006 5.4

2007 6.3

2008 4.2 . 1.8 1.8 contributed to the proportional turnover in the property property in the turnover proportional the to contributed market transactions inthe activity increased The players. domestic with structures co-investment or of partnerships types new by characterised were investments new of these in 2016. market Many Finnish the entered investors foreign new eight statistics, KTI the to According increase. to continuing in Finland investments total their with properties, of €1 some sold worth billion investors 2016,In foreign transactions. of all 60% for accounted investors foreign in 2007, highest At its players. domestic by boosted mainly was volume in transactions growth the and past, in the than lower was share relative their of years, couple past the from increased investments of foreign amount absolute the While transactions. 28% of all some for accounted investors Foreign 45%. at ending years, in recent than lower clearly was transactions of all share combined properties’ retail and Office 2009 of years. couple past the within volume relative highest is the which stock, 13.1% some to property increased volume invested of the transaction size, market total the to relation In markets. 2.4 2010 continued to enter the Finnish 2011 2.1 2012 foreign”New investors 2.5

2013 market in 2016” 4.3 2014

2015 5.5 7.4

Source: KTI 2016 0 2 4 6 8 10 12 14 16 % 2006-2016 Transactions sector volume by property 0.6%. some by size of market growth the to contributed properties investment of growth capital overall The market. investment the into came of properties worth million €400 some investors, to sales property sector’s public and corporations’ Through in particular. sector residential in the portfolios, investors’ in properties developed of newly aresult mainly was size market in the increase 6.8%.The or euros of billion 3.7 a growth year, represents this previous the to Compared billion. €58.2 some to amounted market investment property professional of 2016, Finnish of the end At the size the structure Ownership 3.2 1000 MEUR Photo: City of Helsinki 0 1 2 3 4 5 6 7 8 2.3 1.6 2006 ”In 2016,”In the Finnish invested property investmentproperty market 2.3 2007 2.3 0.8 Care property ■Other property ■ ResidentialMixedCare ■IndustrialHotel ■ RetailOffice 1.6 2008 1.1 0.9 grew by 6.8%”grew 2009 0.6 0.4 0.5

2010 0.6 0.7

2011 0.3 0.6

2012 0.6 1.0 0.5 0.8 2013 0.7 1.1 1.0 1.3 2014 0.7 1.7 1.3 0.6 2015 1.3 Source: KTI 1.7 1.7 0.5 2016 2.8 their absolute investments grew slightly, of share grew their while investments absolute their a result, As development. property inresidential investments continued they time, same At the market. transaction in the purchasers net became they acquisitions, major some to due year, and, previous in the than properties fewer sold investors slightly,declined 27%. In2016, some to institutional universe investment total of the share investors’ Institutional portfolios have increased while those of institutions have have of institutions those while increased have portfolios funds’ and companies’ Property years. past in the markedly changed has investors property biggest of the list The unchanged. remained market total of the share their and properties, acquiring and selling in both active were funds property Domestic 12% or billion market. €6.9 to total of the holdings their increased which acquisitions, major some out carried companies property 22% to listed in 2016. 20 some Also from increased companies property of non-listed share The decrease. to continued market investment total the Direct property investments in Finland 2011-2016, EUR billion 2011-2016, EUR Finland in investments property Direct investment market by investor group structureThe of Finnish property ■ RealestatefundsCharities,endowmentsandother companies companies■ Non-listedproperty ■ Listedproperty investors ■ InstitutionalinvestorsInternational 10 20 30 40 50 60 0 01 21 21 21 21 2016 2015 2014 2013 2012 2011 541. 6216.0 16.2 16.2 15.4 9.0 5.2 6.5 5.7 . . 9.8 9.3 9.0 5.4 6.3 7.6 5.6 8.4 7.1 5.6 9.9 7.5 15.6 11.9 5.8 11.1 9.1 Source: KTI 15.7 12.3 6.9 12.7 9.6 29 3 The Finnish property investment market: volumes, structure and players 30 3 The Finnish property investment market: volumes, structure and players Finnish pension system. pension Finnish inthe role asignificant have not do insurance, pension individual or agreements market onlabour based systems, pension Supplementary employees. and employers both by paid are Pension contributions employers. by organised foundations and funds pension companies, insurance by pension is administered and contributions pension annual of the bulk the receives scheme pension occupational The insurance. pension employment-based and regime pension public of a basic is a mixture system pension Finnish The market. equities of the performance strong of the a result mainly was increase The billion. €3.6 some by increased of 2015, ofend 2016. had the Since assets the quarter third €184.5 of the some end at billion the to amounted schemes pension occupational statutory the administering funds and companies insurance of pension investments of the value total the TELA, Pension Alliance Finnish the to According companies. insurance other and funds life include markets institutional in the participants Other universe. investment institutional Finnish of the majority the form schemes pension other and companies Pension insurance investors Institutional €1.5 €1.8 to billion. from increased place 10th onthe ranked portfolio of the value the time, same At the million. €430 of some portfolio a with reached was of 2015, end At the ranking same the million. €530 than more to amounted investors of largest ranking in the place 30th onthe of 2016,end portfolio the at the significantly: increased also has size portfolio average The years. in recent list top-30 the entered havealso players international new Several unchanged. remained or decreased Property assets under management at the end of 2016, of end billion EUR the at management under assets Property holdings investorsDirect of property in 30 biggestproperty Finland *KTI estimate OP Insuranceandpensioncompaniesfunds Ilmarinen MutualPensionInsuranceCompany LocalTapiola andLocalTapiola’s Group funds Varma MutualPensionInsuranceCompany Etera MutualPensionInsuranceCompany Bank of Åland Residential Property Fund Bank ofÅlandResidentialProperty Elo MutualPensionInsuranceCompany Nordea LifeAssuranceFinlandLtd Nordea Aberdeen AssetManagement Aberdeen Redito Property Investors Redito Property Fennia Group andFunds Fennia Group eQ RealEstateFunds RBS Nordisk Renting RBS Nordisk CapMan RealEstate Wereldhave Finland ICECAPITAL REAM SATO Corporation Technopolis Plc VVO Group Plc VVO Group Mercada Ltd Mercada Sponda Plc Citycon Plc Antilooppi AB Sagax Avara Ltd Logicor* Exilion NREP NIAM Keva ...... 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Non-listed property companies/funds ■ Non-listedproperty ■ Institutionalinvestors company or industry specific pension funds. pension specific industry or company smaller several are there Inaddition, Pension Fund. State the and Keva funds, pension major two are there sector, public the In Veritas. and Elo, Etera Varma, Ilmarinen, companies: major five currently are There sector. pension private the in players biggest the are companies Pension insurance of 2016. 37.6%, was quarter third of the end at the portfolios institutions’ sector of that public while 30.3%, was equities of listed share the portfolios, companies’ insurance pension sector private the In returns. investment higher slightly in resulting exposure, equity alarger have typically They allocations. and strategies investment havedifferent thus and institutions, sector private than framework solvency different a under operate institutions pension sector public Finnish lower, 3%. clearly at about been has return the years, ten past the In years. 20 past the in on average annum per 4.2% to amounted has investments institutions’ pension sector on private return real the TELA, to level. According original its to back increased be will expectation the which after 10 years, 3%to next the for lowered been have expectations return the environment, investment challenging the to However, due investments. on return real of a3.5%annual assumption onthe based are flows money pension long-term on the Calculations investments. on existing onreturns based currently is thus assets investment funds’ in pension increase The contributions. of annual amount the than is now larger out paid being of pensions amount the generations, 1940s the from of people numbers of large retirement the to Due assets. investment institutional Finnish of the basis the form past inthe collected reserves The International investors ■ International companies ■ Listedproperty Source: KTI(queryforinvestors,pressreleases,annualreports) predominantly through non-listed funds. In recent years, the the years, recent In funds. non-listed through predominantly made are investments Foreign billion. €3.5 to billion €2.9 from increased institutions pension by investments property of foreign of 2016, amount the quarters three first the During company structures. investment in jointventure restructured been typically have holdings property transactions, recent In several funds. property domestic in many investors major are institutions Pension companies. of investment kinds different and funds both through made are investments Indirect indirect. are 26% some investments, property all institutions’ pension Of onaverage. portfolios institutional in all 72% at stands currently and years, in recent however, decreased has, share Their investments. domestic direct by dominated are portfolios property institutions’ pension Finnish slightly. increased investments domestic 23%. some In2016, direct represents property Finland, in investments all Of in Finland. invested are investments, property institutions’ of pension 77% majority, some vast The category. loan investment in the included currently are but investments, property as categorized previously were companies property own their to loans institutions’ pension where grouping, and collection in data change the by is, explained however,of 2015. change mostly This €17.1 2016, been having during 9.5% or billion at end the decreased investments of property amounts proportional 8.1%, €14.9 and was to absolute amounting Both billion. portfolios institutions’ pension inFinnish investments of ofproperty 2016, share the quarter of third end At the instruments. market money and in bonds invested were assets of the 44% Some investments. equity other or shares in listed invested were assets institutions’ of 2016, pension of 48% the quarter third of the end At the 8.1% of pension institutions ”Property represents some ”Property investment portfolios” investment Investment of pension portfolios insurance companies 100 20 40 60 80 % 0 Shares ■Realestateinvestments ■ Otherinvestments ■ Shares anddeposits ■BondsOthermoneymarketinstruments ■ Loansreceivables Elo 13 36 32 13 tr laie am eia Keva Veritas Varma Ilmarinen Etera 33 29 19 40 39 11 transferring parts of its property investments into indirect indirect into investments property of its parts transferring in active been of has 2015).Varma end years, past In the billion (€3.3 €2.9 to billion at the amounted portfolio property domestic of 2016, end At the Varma’s direct years. in recent portfolios in their restructurings major implemented have and investors, property major also are €37.2 and Both of €42.9 billion, respectively. portfolios investment total with sector, private inthe companies insurance pension biggest two the are Ilmarinen and Varma markets. property US and in Asian invested also have Keva, and Ilmarinen example for institutions, some but inEurope, are investments of foreign majority The in late2016. in Frankfurt tower office in amajor ajointinvestment made Varma recently, and Elo most and, inSweden, properties centre inshopping invested have Keva and Varma funds. pension other with together US the and Europe around properties office large inseveral invested has instance, for Ilmarinen, Finland. outside investments venture joint or direct made also have institutions pension biggest end of 2016.end at billion the €3.6 to amounted holdings Varma’s property Intotal, structures. jointventure and funds non-listed both through abroad invests Varma portfolio. of the shareholder a 19% Varma remained Partners. Capital Tristan by managed afund to 15 properties comprising portfolio office million a€130 selling by strategy this In late 2016, Varmacontinued companies. and funds property to assets selling by structures 16 28 40 9 Source: TheFinnishPensionAllianceTELA ”Finnish institutions have made made have institutions ”Finnish ”Large institutions continued continued institutions ”Large restructuring their property their property restructuring joint venture investments in in investments venture joint portfolios in 2016” 35 32 12 foreign property” foreign 36 41 31 3 The Finnish property investment market: volumes, structure and players 32 3 The Finnish property investment market: volumes, structure and players (Valtion Eläkerahasto), which manages an investment investment an manages which (Valtion Eläkerahasto), Pension Fund State is the investments property on indirect solely focuses that one only the institutions, large the Of 2015. inlate inSweden centres shopping two acquiring through investments foreign direct started also It has internationally. and in Finland both funds property in non-listed investor active is an Keva billion. €3 some to amounted investments of 2016, end At the property Keva’s institutions. pension sector private to compared property and in bonds less and in shares more invests Keva framework, regulation solvency billion). adifferent to (€44.2 billion Due €48.5 to amounted portfolio of 2016, end At the investment Keva’s of Finland. Church Lutheran Evangelical the and governments local and state in the employed of people matters pension the handles which is Keva, sector pension inthe player biggest The and Tishman Speyer. Authority Varma, Investment with Qatar together Germany Taunus the in Turm tower acquiring by Finland outside investment joint venture major first its entered also Elo million. €250 of some value a combined with transactions inseveral properties commercial sold It also dwellings. 1,800 some comprising in Finland acquisition a residential major of 2015). atbillion end the (€2.8 billion In 2016, made Elo €2.9 to amounted holdings of 2016, end At the property Elo’s €21.5 of some billion. portfolio investment atotal with is Elo company insurance pension sector private biggest third The in 2016. billion €4.2 to amounted portfolio investment property of Ilmarinen’s value total The Netherlands. inthe one and in Germany investments jointventure two into entered and Finland, outside investments its increase to continued Ilmarinen (€3.0 billion of 2015). end at billion the €2.8 to amounted portfolio property domestic direct of Ilmarinen’s value total in 2016. of 2016, end in Finland At the the deals major any in involved not was in 2015, Ilmarinen restructurings and transactions large inseveral player amajor been having After residential portfolios in 2016” increased their domestic ”Pension institutions institutions ”Pension Real estate exposure of the Finnish institutions 13.2% 2.8% total valueEUR21.9bn 2016 12.5% 71.6% The management of property maintenance is most often often is most maintenance of property management The interface. tenant of their control retain to want they as teams, management property and asset in-house have also institutions Many kept in-house. are functions management portfolio thus and themselves, by institutions made are decisions investment that requires legislation Finnish investments. property direct making from 2016 them (€17.9 prevent statutes billion). fund’s The of quarter of €18.5 third of the end at billion the portfolio to the Federation of Finnish Financial Services FFI. Services Financial of Finnish Federation the to billion, according €2.5 to amounted investments property total companies’ insurance and of 2015, end the insurance life At insurance. Life Aktia and Life Fennia include in property investing insurers life Other Group. LocalTapiola and Group Sampo Nordea, Group, OP institutions financial large the by managed are companies insurance and insurance life biggest The agreements. capitalisation called so through clients their to opportunities investment offer also They corporations. and individuals private both to insurances pension voluntary well as as insurances life offer companies insurance Life billion. €28 some to amounts value combined their institutions; pension of those than smaller however, are, markedly portfolios investment Their companies. insurance and insurance life include in Finland investors property institutional Other development. residential in investments their increased have and opportunity, this used have of them Many cities. main in the property residential of rental supply the enhance is to legislation of this purpose The 2022. until 50% to up investments property residential their leverage can companies insurance pension whereby introduced, was legislation temporary In2014, however, investments. anew in their leverage use to allowed typically not are funds pension Finnish investors. main are clients institutional major their where funds, property unlisted launched also have companies These portfolios. investment property their manage to companies management separate founded have groups, LocalTapiola and OP instance for institutions, main of the Some providers. to service outsourced Source: KTI(queryforinvestors,annualreports,estimates) ■ ■ ■ domesticinvestments Indirect ■ Indirect foreign investments foreign Indirect investments foreign Direct domesticinvestments Direct Market values at the end of year of end the at values Market companies property Market values of the Finnish listed 2017. in summer operations its start to line,is scheduled which metro western new the by 2017. is located in spring completed be centre to The expected 2016 phases last the and in August completed being extension of the phase first the with extended, being is currently centre The sqm. of 83,000 area leasable a gross with centres, shopping company’s of the largest is the Espoo in Omena Iso centre Shopping in Finland. located are 42€ some properties, of Citycon’s value market the Of in Finland. located are 20 of which centres, shopping 52 owns currently company the Intotal, in Finland. located currently are assets 41% about value, property by market of Citycon’s of 2016. end at billion the Measured €4.4 was portfolio property of Citycon’s value The billion. €2 exceeding value market its with exchange stock Helsinki in the listed company property biggest the as position its established has Citycon years, few past the In countries. Baltic and Nordic in the management and development investment, centre in shopping specialising company is a property Citycon million. €211 REIT) Residential (Orava and House) (Investors €36 some between vary companies’ smaller three of the values portfolio investment property The liquidity. share good and portfolios property large with players significant are three companies, listed six the Of shares. new issuing through partly deal the financing block, Forum of the purchase the through significantly grew which of Sponda, value market in the increase onthe based mainly was growth 10%. The of some 2015, to increase an shows this Compared billion. €4.1 to amounted exchange stock Helsinki OMX Nasdaq in the value market combined their of 2016.end end, At year billion at the €6.9 some to amounted in Finland investments property combined sector’s property listed Finnish The sector Listed property 1,000 1,500 2,000 2,500 EUR million 500 0 ■ 201120122013201420152016 iyo l Sod l ehooi l Soe rv Investors Orava Suomen SpondaPlc Technopolis Plc Citycon Plc Nordic and Baltic countries” ”Citycon concentrates on on concentrates ”Citycon shopping centres in the the in centres shopping

Hoivatilat Residential REIT House Hoivatilat ResidentialREIT Source: NASDAQOMX Helsinki Index (index 7/2000=100) OM companies property of FinnishShare performance listed in the Helsinki CBD for €576 million, comprising the Forum Forum the million, comprising €576 for CBD Helsinki in the properties six acquiring by portfolio its increased markedly 2016, Tampere. and In early Sponda of Helsinki areas central in the development and investment centre shopping and onoffice focuses currently Sponda, value, market by measured company property listed biggest second The dwellings. residential rental 1,700 2015). some owns company The at €211 stood portfolio (€196 million of end at million the company’s of the ofvalue 2016, end at the and fair the in late 2013, listed was company The properties. residential in rental investing companies investment estate real listed for transparency tax provides which legislation, fund property Finnish the under operating fund property listed only is the Trust Investment Estate Real Residential Orava 4.6%. by decreased index Helsinki OMX 7.5%, of some overall the while showed a decrease index price Sector Estate Real OMX in 2016. weak The rather was companies property listed of the performance share The in Finland. located are million (€1.4 of 2015), end at billion the €998 some of these, and €1.6 to billion amounted portfolio Technopolis’ property of of 2016, value end At the fair the Lithuania. and Russia inNorway, Estonia, each campus one has also company €126 some for The million. in Göteborg campus Gårda the in 2016 market Swedish the acquiring by Tehnopolis entered in 2016. in Lappeenranta assets of its disposed having after in Finland, in 7 cities operates currently company The space. office modern with services combine which campuses, park of business achain manages and Technopolis develops owns, Vantaa. in Tikkurila, property mixed-use sqm 9,500 a in2018. developing completed It is also be to scheduled Tampere, in central Ratina centre shopping sqm 52,000 is the construction under currently project development (3.1 of 2015). atend million the significant most Sponda’s of 2016 billionend at the €3.8 to increased portfolio property of Sponda’s value total the block, Forum of the acquisition the Following in Russia. and Turku in the region disposals by some strategy current its implement to continued also has company The vicinity. in its properties office and centre shopping 100 200 300 400 500 600 0 X

2000 OM and Index Helsinki OMX HelsinkiRealEstateIndex 2001

2002 OMX HelsinkiIndex 2003 2004 2005 2006 2007 2008 X

2009 Estate Real Helsinki 2010 2011 2012 Source: NasdaqOMX 2013 2014 2015 2016 02/2017 33 3 The Finnish property investment market: volumes, structure and players 34 3 The Finnish property investment market: volumes, structure and players operations in market portfolios. in market operations their focused recently have but past, in the portfolios residential subsidised held have significant of which each VVO, SATO Avara, and properties: in residential investing companies property non-listed major three are There companies property Non-listed of 2017. end the by million €200−220 some to grow to €155to it targets million, and amounted portfolio property company’s of the value fair the 2017. inMarch Exchange of 2016, end At the Stock Helsinki in 2016 of Nasdaq list main in the and marketplace North First inthe listed was company The operators. service sector private and municipalities both include tenants company’s The blocks. service extensive more and centers care day children’s homes, nursing including properties, care out leasing and in developing is specialised Hoivatilat Suomen 2015 and 2016 and 2015 of end the at management under assets Property Finland in investors property holdingsDirect of property 10 biggest Photo: Skanska CDF Oy LocalTapiola Group OP Group Ilmarinen Sponda Citycon Varma SATO Keva VVO Elo 5 4 3 2 1 0 ■ 20162015 Source: KTI(queryfor investors) EUR billion VVO is the biggest private sector rental residential company, residential rental sector private biggest is the VVO APG and domestic pension insurance company Elo. company insurance pension domestic and APG fund pension Dutch the include shareholders major Other 53% –some company. −of the majority the currenly owns Balder Swedish The Russia. 4% and Petersburg, inSt Finland in 17% cities major area, in other metropolitan Helsinki in the is located portfolio ofof 2015).the end 80% Almost billion (€ €3.4 billion at the at 2.8 nearly stood portfolio of SATO’s property of 2016, value end At the fair the apartments. 25,300 some comprise holdings SATO’s current use. residential into redevelop to it plans which in Helsinki, locations in central properties educational and office some acquire to agreement preliminary a into entered it that had announced 2016, also VVO During development. in new investing continued also VVO apartments. 2,200 than more comprises of which portfolio the II, Fund Housing ICECAPITAL the purchased company the summer, the In Partners. Capital Avant by managed company property established a newly to apartments 1,300 than of more aportfolio sold VVO year, of the end At the Y-Foundation. by administered company property residential Y-Housing, is a mutual which to dwellings subsidised 8,500 of some sales the completed year, in the company the Early portfolio. its restructure to transactions several 2016, executed VVO During Lumo. brand housing the under dwellings onmarket-based only focuses currently company the properties, residential subsidised of state- owner amajor been earlier Having organisations. market labour Finnish major some include also shareholders VVO’s owners. largest VVO’s are Ilmarinen, Varma and companies, insurance pension sector private largest two of 2015). (€4.0 billion atend billion the €4.3 to Finland’s amounted portfolio property of VVO’s 2016, value fair the of end At the dwellings. rental 35,000 some owning currently primary focus is on acting as a local operator and joint and operator alocal as is onacting focus primary company’s The established. was Partners, Capital Avant company, management asset and 2016,In investment anew premises. in the tenant main is the Kesko Sweden. and in Finland properties 37 retail and centres shopping three comprises company the of portfolio property company. of the third The one owns company. the to Kesko portfolio property retail amajor sold Kesko in 2015, retailer Finnish the established when also was company Oy). The Kiinteistöt Ankkurikadun (formerly Oy of Mercada owners major also are AMF and Ilmarinen million. €100 some for block office of Merikortteli purchase the was acquisition largest Antilooppi’s acquisitions. several through portfolio property and staff its both increase to continued 2016, company the During Ilmarinen. from million €400 some worth portfolio property office an bought company the beginning, the In Pensionförsäkring. AMF Swedish the and Ilmarinen insurer pension Finnish the by is owned and in 2015 established was company The area. Metropolitan Helsinki in the properties in office invests Oy Antilooppi portfolios. property funds’ pension of the restructurings of the aresult as founded been have companies of these Many companies. smaller of several establishment the through years in recent grown has sector in 2015. the addition, In founded both were which Mercada, and Antilooppi include companies property domestic non-listed largest the markets, property commercial the In million. €250-300 of some IKy, capacity investment an with Asuinkiinteistörahasto Avara partnership, limited one manages It currently stuctures. venture joint well as as funds equity private through growth pursue also they strategy, current company’s the to company. in the According shareholder biggest the being Elo company insurance pension the with institutions, Finnish major are shareholders Avara’s cities. larger the in €1 concentrated some billion, mainly worth a total with apartments 7,500 rental some manages and owns Oy, investor, Avara currently residential large third The in 2016. 1,800 some was of apartments number in the increase net the aresult, As strategy. current its with compliant not were that properties some divested and cities, in larger development new active year. the SATO continued also throughout portfolios smaller several acquired it also and apartments, 1,000 than more comprising both acquisitions major two by portfolio its it increased in 2016. spring, Inthe grow to SATO continued ventures between Finnish between ventures and established years” in recent ”Many companies joint are ”Several new investment”Several companies have been foreign investors” foreign Since 2012, several special real estate investment funds have have funds investment estate real special 2012,Since several institutions. domestic for structure is afavourable of view point taxation a from which partnerships, limited as structured typically are at institutions targeted funds property non-listed Finnish investors. private to offered funds several also are there Currently investors. institutional at domestic targeted mainly were products fund first The years. past the during significantly increased has funds property of non-listed supply The companies management Real fund estate companies. examples of domestic specialised investment property are Estate Real HYY and Renor Teknologiakiinteistöt, IVG Polar. and Turun Genesta instance, for include, These organisation. existing an with company a Finnish bought or in Finland office an established either have that investors foreign major some include property commercial in investing companies property non-listed Other partners. investment their as Finland to investors foreign new brought company the cases, Inall portfolio. office an and apartments residential 3,000 than more centre, shopping one in 2016 acquired and transactions several out It carried investors. international mainly for partner venture Management are traditional Finnish institutional investors’ investors’ institutional Finnish traditional are Management Asset Property LocalTapiola and Management Property OP in Berlin. and Petersburg inSt. well as as countries Baltic and inNordic 7 offices has company The accounts. 3separate and funds property 6 managing is acompany Capital Horizon Northern clients. of its behalf on strategies investment alternative it executes addition, In funds. European its through in Finland invests also and funds property Finnish three manages that company management investment is aglobal Management Asset Aberdeen properties. residential Nordic into mandate investment million a€400 them awarded had BVK that announced year, in the CapMan Later portfolio. the manages also CapMan inFinland. portfolio a residential of acquisition in the BVK fund pension aGerman advised and business, its 2016, In it expanded areas. business the of is one investment property whom for company equity private a Finnish is originally funds, property Finnish three and Nordic one manages which CapMan, strategies. their affects significantly also which backgrounds, diverse have companies management fund property Finnish funds. in these invest also institutions some Currently teams. management investment banks’ various through investors at private targeted mainly were funds of these first The structure. fund mutual semi-open-ended the under launched been ”Fund management companies companies management ”Fund expand areas” to new service 35 3 The Finnish property investment market: volumes, structure and players 36 3 The Finnish property investment market: volumes, structure and players at the end of the year. of the end at the million €875 some to amounting value portfolio property total the with management, under assets their doubled 2016, almost eQ and during transactions major several out carried funds Both properties. in commercial invests another and properties in care is specialised funds of the One funds. investment estate real special two manages Bank eQ Management. Fund Titanium and Fennia company insurance Investment, Property OP Ålandsbanken, Bank, eQ include currently sector inthis managers significant most The market. investment property professional the for of capital source a new opened thus has emergence their and investors, as of households lots have funds Mutual years. in recent rapidly increased has sector fund property mutual The transactions. 20 than more out carried has company the operations, of its years two first the During investors. institutional international are investors fund’s the All properties. daily-goods and store in grocery invest funds two Sirius’ basis. deal-by-deal on a co-investments makes and funds property manages in 2015. company established The thatwas company management investment and is afund Partners Capital Sirius properties. warehouse and 29 industrial comprising portfolio a acquired which Properties, company, CTV investment new a 2016, In established company the in Finland. portfolios investors’ international some that manages company management asset and investment estate real Nordic It is a boutique Group. of Catella is part Management, Asset Amplion as known formerly Management, Asset Catella funds. investment property mutual special of managing aim the with company management fund anew late 2016, established company the In investors. foreign some to services management asset offer also They properties. healthcare and retail example, in, for investing funds manages that company management fund property is aspecialised Management Trevian Asset investment. in residential specialised and partnerships limited as structured are funds estate real its and managers, of these largest is the ICECAPITAL class. asset alternative one as clients their for funds property offer currently that companies banking investment Finnish of examples are Taaleri and Auratum ICECAPITAL, assets. of billion property €2.4 €1.9 some to managed LocalTapiola amounted billion, and management under assets property direct Management’s in Tapiola of 2016, end At the Property OP inEspoo. properties other and centre shopping Ainoa is the project development significant most Their sectors. commercial and residential in both development in property active also are LocalTapiola’s funds investors. private and institutional both comprising groups investor at different targeted funds several manage companies Both business. management fund the into expanded also have that companies management property ”Property funds sector funds ”Property continues to grow” to continues Foreign investors form a diversified group of players with with of players group adiversified form investors Foreign €1.1 sold €2.1 and some properties. of Finnish worth billion purchased investors In2016, market. foreign investment 21% some for property account Finnish total of the investors year. Foreign previous the to 3.4% of some compared growth a €12.3 some to represents billion, which amounted investors property of foreign holdings of 2016, end At the total the International investors Tradeka. and Pension Fund of Varma, State is ajointventure inVVT Turku. Hansa Centre Shopping of ownership the organise to established afund manages also Exilion area. metropolitan Helsinki in the properties in office invested has fund their and funds, pension Finnish of four is ajointventure Exilion VVT. and Exilion include of arrangements kinds of these Examples purposes. specific for fund aproperty establish to forces join of investors number alimited where arrangements jointventure like or club-deal- as considered be can funds Finnish of the Many properties. Toimitilat in commercial Iinvests Fennica fund Fennia’s million. €240 some to amounts funds of the value combined The properties. in residential another and properties, incare investing fund property one manages Management Fund of 2016. end at the million Titanium €750 than of more capital atotal had and investment, property in residential is specialised fund Ålandsbanken’s year. of the end at the €1 some of had assets billion and in 2016, rapidly grow to continued fund The properties. residential and commercial Yieldin both OP-Rental invests some significant retail property acquisitions in Finland in in Finland acquisitions property retail significant some made it also but properties, manufacturing and warehouse on focuses company The in Finland. 279 assets currently has and years, in recent in Finland operations its expanded markedly has Sagax company property listed Swedish The throughout Europe. in 18 countries operates which Group, of Logicor part is company The in Finland. assets 79 has currently and properties, manufacturing and in logistics specialises Logicor Real. Commerz from Center Science Life Keilaniemi the well Elo, as as from portfolio property office an instance, for acquired, by Niam managed In 2016, funds years. in recent in Finland investments its increased has Niam NREP. Wereldhave and Renting, Nordisk RBS Sagax, Ab Logicor, Niam, include in Finland investors foreign biggest the portfolio, property of the value market by Measured partners. operating local their with structures co-investment through market Finnish the entered have investors of foreign amount increasing an of years, couple past In the managers. asset local /or and offices Nordic their through operate others while NREP), and Hemsö PATRIZIA, Niam, Genesta, IVG, (for in Finland instance, offices own their established have of them Many practices. management and strategies varying acquisitions worth €2.1 billion ”Foreign investors made new new made investors ”Foreign in 2016” in Largest direct property transactions of foreignLargest direct players property in Finland in 2015-2016 currently active in Finland. Redito currently manages a property aproperty manages currently Redito in Finland. active currently investors of Nordic example is another Redito Swedish The Hansainvest. and PATRIZIA instance, for include, in Finland investors German active Other fund. CapMan’s from CBD Helsinki in the of property a hotel acquisition the through portfolio its 2016, expanded Deka During of millions. hundreds of several portfolios with in Finland players major are Immobilien Deka and Investment Union funds German The Partners. Capital Avant with together transactions property residential large in two involved was firm investment based US unnamed An spring. in the million €80 some worth portfolio aresidential acquired BVK Versorgungskammer Bayerische German The players. domestic by dominated been traditionally has which market, property residential Finnish the entered also investors foreign new other Some in 2016. market investment residential the entered –also sectors property on commercial only focused earlier having –after and fund, II Strategies Nordic its to acquisitions in 2016. in Finland several It made investors active most of the one was NREP strategies. differing with funds several managing firm equity private is a Nordic NREP porfolio. Finnish inits centre, shopping Itis the asset, one has in2016. Wereldhave only acquisitions two through portfolio Finnish its increased company The agreements. lease net triple- long with of assets type insale-and-leaseback invested mainly has Renting Nordisk 2016.late 2015 RBS early and ASSET /PORTFOLIO ASSET and industrial properties) retail (22 office, portfolio Omega Espoo Keilaniemi, Center Science Life Helsinki Kaari, Centre Shopping 186 retail properties CBD Helsinki property, office head Finland EY Helsinki Three industrial properties, property centre warehouse and one logistics Three postal centres, one properties 15 office Helsinki area metropolitan the in properties office Six Finland and Sweden in properties hotel and office 97 retail, 22 retail properties ”Foreign investors”Foreign increased Finnish residential property their investments in the market” 2015Q4 2015Q4 2015Q3 2015Q2 2016Q4 2016Q4 2016Q4 2016Q2 2015Q1 061160 2016Q1 2016Q1 DATE n/a n/a n/a 90 93.3 100 120 130 450) (total Finland in 180 191.5 (M PRICE € ) Valad Europe & Goldman Sachs &Goldman Europe Valad NIAM NIAM AB Sagax GmbH Estate Real Investment Union Oyj Group Posti Logicor (NRP) &Partners Risan Ness, Partners Capital &Avant Partners) Capital Tristan by (managed 4fund EPISO NIAM Group Partners Redito) by (managed AB Properties Serena PURCHASER

market indirectly through the Finnish property companies companies property Finnish the through indirectly market property Finnish in the invested is also capital International Valad. with partnership in properties retail and industrial office, of 22 a portfolio 2016 acquiring by in December market Finnish the entered Sachs Goldman Varma. and Partners Capital Avant with together market office Finnish in the investment an made Partners, Capital Tristan by 4), managed 4 (EPISO afund Opportunities Special Investors Property European Also, Estate. Real M7 company UK the well as as Properties, CTV and Partners Property Alma investors Swedish the instance, infor 2016 in Finland included, investors new other group, Property Pioneer and BVK to addition In in 2016. markets property healthcare Finnish the entered AXA by managed afund and Group Property Pioneer Norwegian the in 2016. in Finland Also businesses their expand to continued both who Hemfosa, and Hemsö companies Swedish the instance, for include, sectors these in Investors sectors. property use /public care Finnish the entered havealso investors foreign years, In recent Ratos. firm equity private Swedish the and Varma Finnish the include Properties of Serena owners main the whereas AP3, fund Trophi pension Swedish by the by Redito, is owned managed portfolios the Of assets. retail smallish comprising mainly inFinland, million €500 than more worth portfolio CapMan’s and Sirius’ vehicles have mostly foreign investors. foreign mostly have vehicles Sirius’ and CapMan’s instance, for funds, non-listed Finnish the Of Mercada. SATO, and instance, for Antilooppi include, ownership foreign significant with companies Large funds. and ”New foreign”New players in the care property market” property care n/a MBH Real Investmentgesellschaft Commerz HOK-Elanto n/a Company Pension Insurance Mutual Etera Sponda Plc Pension Insurance Elo Mutual Sveafastigheter Fund III Company Insurance Pension Mutual Varma SELLER Company V arma Mutual Pension Insurance Insurance Pension Mutual arma Source: KTI 37 3 The Finnish property investment market: volumes, structure and players 38 3 The Finnish property investment market: volumes, structure and players most of its property holdings on a government-owned onagovernment-owned holdings property of its most concentrated has state Finnish The market. property Finnish inthe players important very are entities sector Public Public sector players. foreign with co-investor as acts sometimes also which manager investment Trevian is another portfolio. this manage to started also and investment, property residential in its BVK in 2016 it advised when services its expanded also CapMan Partners. is Capital Avant kind of this player new significant most The investors. foreign with co-investors as acting also and services, management investment and advisory offering of companies types of new establishment the by smoothened been has investors of foreign entry market the years, recent In 2016 of end the at management under assets Property Finland investors foreignBiggest in property Redito Property Investors Redito Property *KTI estimate Deka ImmobilienGmbH RBS Nordisk Renting RBS Nordisk Wereldhave Finland Union Investment investment and managers co- entry of new foreignentry players” investors enable the market ”The establishment”The of new AB Sagax Logicor* NREP NIAM . . . . . 1.0 0.8 0.6 0.4 0.2 0.0 Source: KTI(queryforinvestors) EUR billion area (Helsinki University Properties and Aalto University University Aalto and Properties University (Helsinki area metropolitan Helsinki inthe buildings university manage Two and own companies buildings. of the university manage and own is to purpose sole whose companies, limited three by owned are properties university of Finnish majority The operations. sales active in 2016its and it continued €108 of properties, some worth million 2015, divested Senate In term. long in the agencies state by needed not are that of properties dispose and/or develop is to purpose whose unit abusiness have Properties Senate properties. Senate by sold be to of space amounts significant free thus would which efficiency, in space increase ambitious at an aim will that strategy workplace anew pursue to started also has state The unit. expertise environment working internal state’s the as strategy its implementing is currently and Finance of Ministry of the control the under operate Properties Senate markets. private the from agencies state for rented premises of the agreements rental the manages ItArmy. also Finnish by the used properties well as as buildings cultural and prisons ministries, and agencies state by used offices of consists portfolio sqm million 6.2 2015). diversified Its (at billion €4.4 of some year-end portfolio aproperty with in Finland, owner property largest is the Properties Senate investors. property sector private and agencies state between agreements in lease intermediator an as acts It also holdings. property state’s the let and manage develop, is to task whose Properties, Senate called enterprise in particular, also have a significant amount of space that they they that of space amount asignificant have also in particular, of Helsinki City the as such municipalities, Some billion. €20 around to amount holdings property municipalities’ Finnish the that It is estimated buildings. cultural well as as centres healthcare and nurseries schools, offices, as such provision, service and administration public for required properties of majority the own typically municipalities Finnish campuses. onits organisations education other and corporations private to premises offers also of Finland Properties University shareholder. aminority as state Finnish the with together Finland, across 10 the to universities spread ownership the with base shareholder abroader has Ltd, Finland of Properties company, third University The themselves. universities the by owned are companies these and Properties),

Photo: Skanska CDF Oy strategies. Most of the new properties – office properties properties – office properties new of the Most strategies. management and ownership property evolving corporations’ of execution the enabled has market finance and investment property of the development and broadening The corporations. industrial Finnish the by owned is still stock, 85%some total of the majority, vast the sector, industrial in the Only investors. professional by owned often very also are properties retail Large investors. by is owned stock property office Finnish the of 80% than More in particular. markets in office common less is becoming past, in the common very be to used which Owner-occupation, years. past the during markedly changed has markets property in the role occupiers’ Property Corporations dwellings. state-subsidised 47,000 some owns which Heka, company property residential its through in Finland landlord single largest is the instance, for of Helsinki, €10 City some to The billion. amounts which of value estimated the stock, state-subsidised own mainly companies These companies. separate through portfolios property residential significant own also municipalities Most provision. service their for need they premises the rent will counties the and ownership, municipalities’ in the remain will – properties healthcare smaller −typically municipalities the by owned currently Properties counties. the by owned be Oy, future in the will which Tilakeskus Maakuntien company established anewly to transferred be –will hospitals central large comprising –mainly of municipalities federations regional of current holdings Property billion. €5-6 some to amount to is estimated of municipalities federations and municipalities by owned properties of healthcare stock the total, In issues. ownership onproperty impact significant a have will services healthcare and in social reform The of it. parts or portfolios property of municipal ownership in the common more become have structures company liability limited normal years, In recent municipality. the by directly owned be also might Properties sheet. balance aseparate into properties the separate to them enables which structure, enterprise public in a specific ownership property their organise typically Municipalities municipalities. to services their sell who providers service sector private to premises the rent they and investors, private by developed currently are care elderly for needed properties new of, instance, for proportion A big ownership. property impacts also which provision, service in their strategies varying more apply to have started municipalities years, In recent players. market private to let corporations rent their office healthcare will properties be ”The ownership and of”The use ”The vast majority vast of the”The reorganised in 2019” premises” properties, EUR billion EUR properties, commercial of structure Ownership for its headquarter use in Espoo. use headquarter its for property office an redeveloping it is also and in Järvenpää, centre logistics a major Finland, across stores of new a couple edveloping is currently Lidl centres. inshopping located stores of exception the with in Finland, properties its owns typically Lidl chain retail German The years. in recent investors to properties its in selling active been has in particular Elanto HOK- SGroup, within co-operatives the Of area. Kalasatama in the corporation the for office head anew develop will who Varma, with agreement rental in along-term entered Kesko time, same At the use. residential into property the redevelop will Varma, who to property office head current its sold Kesko 2016, In investment. and development property retail in the player amajor remains it still but deals, sale-and-leaseback major through holdings its decreased has Kesko years, recent In market. property in the players active been traditionally have chains, retail Finnish major two Kesko, the and S Group Energia. Vantaan and Metso Group, Posti example, for included, properties of their disposing Corporations transactions. small rather mainly of several, consisted which million, €290 some to amounted of corporations sales the 2016, In market. investment of the size total the increased has part, its for which, of properties, billion worth €6.5 some havesold corporations Finnish decade, Within last the leases. long relatively through buildings in these tenants as remained companies the cases, in many and, holdings modern and efficient premises. efficient and modern in agreements rental new to committed have corporations where area, metropolitan Helsinki in the underway projects development office several were of 2016, end At the there premises. new move to companies when reduced is typically usage space and efficiency, space emphasise also companies Most premises. their rent typically and strategies, workplace sophisticated increasingly pursuing are space office using Companies premises. office other and headquarters their of more rent to beginning are they even but properties, production their own typically still companies Industrial Finnish corporations have also sold their existing property property existing their sold also have corporations Finnish major several of years, couple past the During developers. or investors professional by developed −are in particular 100 % 20 40 60 80 0 owner-occupiers ■Publicsector investors■Privateand ■ Professional Office 1.4 15.5 2.7 (incl. hotels) (incl. warehouse and (incl.warehouse (incl. hotels) Retail 23.1 17.7

Industrial logistics) 4.4 24.9 Source: KTI 39 3 The Finnish property investment market: volumes, structure and players 40 3 The Finnish property investment market: volumes, structure and players outsourced its management, property accounting and recently, Aberdeen when just started were services The in Finland. services management property and asset offers currently also CBRE firms, service estate real global the Of management. services onproperty solely concentrating of acompany example is another Management Service Coor investors. domestic for working mainly company service management property Finnish traditional of a example is an Oy J. Juhola Kiinteistömanagement funds. property several manage also currently they but portfolios, property shareholders’ of the management property and of asset care take to founded originally were companies The investors. institutional domestic by founded companies of management examples are Management Property OP and Management Asset Property LocalTapiola in Finland. providers service management centre shopping Oy, leading of the is one Ovenia Realprojekti company affiliate third its Through years. in recent acquisitions company through sector management housing the into Oy, expanded company, has Isännöinti Ovenia daughter other Group’s Ovenia corporations. well as as investors international and Finnish major include clients management property and asset property commercial Oy’s Ovenia companies. affiliate of three consists Group Ovenia corporations. and investors property international and domestic both for services valuation and advisory management, estate of real spectrum awide offers Newsec sector. management property and asset inthe player major is another group, Stronghold- Swedish-originated of the part Newsec, Corbel. company management property and asset Finnish the acquired Realia In2016, investors. institutional among and management property in commercial position its at strengthening it aims acquisitions these through and firms, management domestic of smaller acquisitions several through expanded has Management Realia years, In recent services. advisory and valuation management, property commercial for services management offers also and portfolios, residential investors’ major some manages Group, of the company affiliate another Management, Altor. Realia firm equity private Nordic the by owned is currently group The markets. management and brokerage property residential in the player major a companies, daughter its is, through Group Realia Ovenia. and Newsec Management, Realia include investors foreign and institutional large the servicing companies main three The companies. Nordic and domestic by dominated is market services management property and asset The services management property and Asset 3.3 Real sector estate service dominated by three domestic / management market is is market management ”Asset and property Nordic companies” Nordic JLL is one of the major players in transactions, valuation, valuation, in transactions, players major of the is one JLL &Wakefield brand. Cushman the under operations its company, new of the continues and partner alliance the became Finland &Wakefield, DTZ Cushman and of DTZ merger the After in 2004. company alocal with agreement alliance an through market the enter to first the among was DTZ firms, service property international major the Of services. transaction and advisory valuation, offer also Management Realia and Catella Newsec, companies, management major the Of companies. global big and firms entrepreneurial domestic of small mixture acolourful includes market service advisory The services transaction valuationand Advisory, market. service management technical and property in the player significant is a Oyj Caverion SOL. and & Tikanoja Lassila ISS, include services management offer currently also who maintenance) and catering cleaning, (such as provision service traditional in backgrounds with companies service largest The chain. service whole the offer to expanded that have companies service traditional and companies management specialist both by offered are occupiers to services management Facilities corporations. to services management facility and property offers also currently the most active in the Finnish market. Finnish in the active most the currently is Hessen-Thüringen) (Landesbank Helaba German the banks, finance property specialised international the Of projects. or transactions property commercial major in financing active most the been recently has SEB banks, these Of Banking. Merchant SEB and Bank Danske Group, OP Bank, Nordea including banks, Nordic and local major the by is provided financing estate of real part major The financing Property well. as in Finland services specific estate real offer PwC, and EY KPMG, as such firms, consultancy business Global in Finland. unit estate real a separate has also Finance Corporate Enskilda SEB Estate. Real Aventum and Finance Corporate Advium including companies, domestic some by offered are services finance corporate firms, services transaction actual the to In addition investors. international and Finnish both with working companies of domestic examples are Oy mrec and Partners Property Finnish sector, services transactions the In firm. advisory and valuation property Finnish established is anewly Property GEM investors. major some Peltola serves &Co firms, valuation local the Of players. domestic mainly servicing firms service valuation and transactions local of smaller acouple also are There in Finland. office an has also Leimdörfer advisor Swedish-originated The acquisitions. company through operations its expanded has and agreements, collaboration through represented been previously having in 2009, in Helsinki office own its established CBRE services. brokerage and consultancy leasing administration services in the Nordics to CBRE. CBRE CBRE CBRE. to Nordics inthe services administration Bonds issued investors by the Finnish property their finance to agreed had Bank Investment European the that In late 2016, SATO announced both VVO and in 2016. bonds new SATO and issued Citycon VVO, companies, major the Of financing. of bond terms and availability the improve to inorder ratings credit acquired SATO and also have Citycon financing. in their bonds use SATO and VVO also companies investment residential Technopolis, and Citycon Sponda, companies listed major the to addition In sheets. balance their financing for bonds corporate use currently companies property Finnish biggest the equity, to access good arelatively to Inaddition of finance. sources several to access have investors property biggest The Finland. in insignificant is, however, volume currently sector’s This investments. property for debt mezzanine or senior either provide which funds, is debt capital of debt source Another of finance. sources other or banks to compared competitive not are requirements yield their low, rather as remained has institutions by provided of debt however, volume the circumstances, market current In deals. in financing banks with in co-operation act or clients their to directly debt property provide either can funds insurance life Pension and investments. property for financing debt provide to funds, life instance for investors, institutional for attractive it more made has framework II Solvency VVO Citycon Sponda REIT Residential Orava SATO Citycon Citycon Citycon Technopolis SATO SATO Citycon Sponda Citycon ISSUED BY ISSUED use several sources of severaluse finance” sources by and Finnish Nordic banks” ”Debt markets”Debt dominated are ”Largest property investors property ”Largest ISSUE DATE MATURITY DATE MATURITY DATE ISSUE 01.0320.12.2022 20.12.2013 17.10.2016 28.5.2015 0521 20.5.2020 20.5.2015 16.9.2015 4321 24.3.2021 24.3.2016 24.6.2013 10.9.2015 1.10.2014 .021 9.10.2018 9.10.2013 1.4.2015 1.9.2015 1.9.2015 8.9.2016 17.10.2023 28.5.2020 16.9.2022 10.9.2020 24.6.2020 1.10.2024 1.4.2020 1.3.2021 8.9.2026 1.9.2025 YEARS 5.5 10 10 10 7 5 5 7 5 5 9 5 7 5 EUR MILLION 1.25 bn NOK 3 m NIBOR +1.55% 3mNIBOR NOK bn 1.25 of the Kivistö shopping centre in Vantaa. NCC Property Property NCC in Vantaa. centre shopping Kivistö of the phase sqm 35,000 first, the start to planning also are NCC and Skanska in Helsinki. district Sörnäinen in the property office another developing is currently and Vantaa airport, Helsinki- of the vicinity in the building a 9,100 office sqm completed CPD 2016,In it develops. Skanska buildings the in investor an as remain also can which Nordic, Development Property Commercial Skanska through Nordics in the operations development its organised has Skanska investors. international and domestic both with cooperated have and years in recent field in this active been all have companies Peab.SRV and These Lemminkäinen, YIT, Hartela, Skanska, NCC, include development property commercial in involved companies construction Nordic and Finnish them. redevelop to order in properties buy also who market in the established been have players new years, Inrecent owners. their by handled is mostly buildings of existing redevelopment the whereas development, in new players active are They development. property in commercial specialises that arm a separate have typically who companies by construction dominated is market development property commercial Finnish The development Property buildings. of existing renovations for and development new for both used be will SATO’s €150 Tampere loan million areas. and metropolitan Helsinki in the dwellings new 1,800 some develop will €170 VVO of the finance, With EIB million support the buildings. energy zero nearly of new development at the is targeted financing The investments. property residential are the largest of SRV’s current projects. YIT is developing is developing YIT projects. current of SRV’s largest the are inKalasatama projects other and REDI centre shopping The in Espoo. area Suurpelto in the project aretail and HMA, in the Vallila and areas in Leppävaara construction under currently projects office It has cities. major other and area metropolitan Helsinki in the concepts park business of its developer active an as especially is known Development 1.4 bn NOK bn 1.4 300 300 300 200 500 350 350 150 150 175 20 25 6 m Euribor +2.25% 6 mEuribor ANNUAL INTEREST 1.625% 3.375% 2.375% 2.375% 2.375% 3.90% 2.50% 1.25% 4.25% 2.25% 3.75% 3.75%

Source: Press releases Press Source: INFORMATION Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Secured Secured Secured OTHER OTHER 41 3 The Finnish property investment market: volumes, structure and players 42 3 The Finnish property investment market: volumes, structure and players commercial property development, especially in cases where where in cases especially development, property commercial than risky less is considered which development, residential in strategies active more pursue typically Institutions needs. occupier current the to respond to inorder modernised being are premises where projects redevelopment office ongoing several also are there moment At the feasibility. financial and technical into studies redevelopment property office thorough and inplanning changes require often most they as atime, long take often processes However, these solutions. new for look to investors pressures which area, metropolitan Helsinki in the premises of office oversupply the to due conditions market in current is emphasised This properties. vacant for uses new for look instance, for can, they where portfolios, in their assets of existing redevelopment the emphasise strategies development Institutions’ projects. in development occupiers with directly together work also may Institutions developer. main the with risk development the share company, thus developing the they and in shareholders as investors institutional are there example, Tripla, and for REDI In both pre-let. are premises of the majority the when aproject enter only typically institutions companies, construction by led inprojects instance, For development. property commercial concerning strategies conservative quite have traditionally investors Institutional use. own its for properties develops Lidl Also country. of the parts various in underway projects renovation and development property hotel and retail several have also co-operatives local its and in 2013−2018. phases in several SGroup developed is being which in Sipoo, centre logistics Freeway sqm 193,000 is the project development largest S Group’s area. metropolitan Helsinki the outside construction under projects smaller in 2019. several has also Kesko started be to is expected that phase asecond by extended be to is planned centre The in Itäkeskus. project centre shopping Helsinki Easton sqm a26,000 out carrying is currently Kesko developers. property professional and significant –are in particular Kesko, and SGroup retailers –large owner-occupiers Some for homebuyers. develop apartments mostly who players, local smaller typically numerous, also are there sector, development property residential In the homebuyers. to directly sold be to properties residential develop also They funds. property often most investors, to sell they which projects, development inhousing active been have companies construction in particular, years recent In of plots. amount hold asignificant and buy typically and properties residential develop also companies of these All phase. planning in the area metropolitan Helsinki in the projects office several has also company The in Leppävaara. office head new Ramboll’s and in Pasila Asema Ilmalan include currently projects main Hartela’s Vantaa. in Tikkurila, centre Dixi of the development involved in the is also and Helsinki, in Pasila, Tripla major the project active in the redevelopment ”Institutional investors are are investors ”Institutional of their existing assets” redevelopment of old industrial premises. HGR Property Property HGR premises. of old industrial redevelopment on is Renor, example concentrates which One markets. niche in their development in property active funds and companies property non-listed smaller some also are There active developers. property also are SATO and VVO in particular, companies, residential Large in Helsinki. campus Ruoholahti of its phase third the developing Vantaa.Technopolis is currently in Tikkurila, property amixed-use developing is also Tampere. Sponda in project centre shopping Ratina Sponda’s and by Citycon inEspoo Omena of Iso expansion the include companies listed of projects development ongoing main The strategies. their in included countries inwell other as as in Finland both areas core own in their development in property players active are Technopolis and Citycon Sponda, portfolios. own in their assets develop actively also companies investment property Finnish development. residential in financing debt use to allowed temporarily are funds pension and regulators, by encouraged been also has development Residential portfolio. in their plots appropriate have they HMA byHMA developer type in projects development office Completed investment. and development in property active also are that arms investment corporations’ Finnish of traditional examples are Capital Ahlström and Invest Lindström use. residential into often properties, existing that redevelops fund of aproperty example is an Auratum CBD. Helsinki in the property of office amajor development in the active partners, investor some with is, together HGR moment, At the use. other some for redeveloped be to buildings in existing investing mainly development, estate on real focusing company investment estate real is another Partners 100,000 150,000 200,000 250,000 sqm 50,000 0 ”Some niche”Some players emerging Construction company■InvestorUser ■ Construction in the property developmentin the property been estimated based on gross area information. information. area been estimatedbasedongross has area hasn’tbeenavailable,rentable area onrentable If information 2007

2008

2009 market” 2010

2011

2012 Source: KTI,RPTDocu Oy 2013

2014

2015

2016 stock. property invested 3% to total of the amounted properties of care of 2016, end At the share the properties. educational and healthcare instance, for including, properties, use public some also cover to expanded has market investment the years, at recent In 26%. unchanged remained share 27% (29% at some in2015), properties’ stand retail and currently share offices’ properties, commercial the Of assets. property residential of value total in the increase the to contribute to continued also growth Capital developers. property and investors by both properties of residential development new of active a result mainly was growth The stock. property invested total of the 30% to increased share Their markets. investment property in the sector largest the became residential development, €1.7 by this to Due billion. increased market invested in the properties of residential amount total The growth. market capital and development new both through increased market property residential invested the and investors, of kinds various for sector property favoured the was Residential continued. development 2016,In structural this market. investment in the classes asset property recognised as attractiveness their increased also have properties, educational and healthcare instance for properties, use public of years, couple Within past the capital. of investment supply increasing an and dwellings residential rental for demand strong to due strengthened has inparticular properties of residential position the time, same At the quarter. one than less is currently and substantially, decreased has of offices share the sectors, in other base investor of the expansion and of offices performance investment weak to due years, recent In database. Index KTI of the 50% than more represented and investors, by favoured were properties office ago, A decade years. in recent markedly changed has market investment property Finnish the structure, sector of property terms In investment performance practices and market structure, sectors: 4 Property property investment market” investment property structure is becoming more structure largest sector in the Finnish ”Residential the became ”The property market property ”The multi-faceted” in the office stock. office in the reflected is also which size, same of the centres European other in many than is greater market property commercial and economy Finnish in the area metropolitan Helsinki of the dominance The cities. major other in six million 3.6 another and area metropolitan Helsinki in the located are metres square million 8.7 about this, Of metres. square 19.4 is some in Finland million space of office stock total The Stock market 4.1 office The growth. capital negative by pressured were returns total markets, industrial and retail office, the in well, whereas perform to continued residential sectors, main the Of growth. capital positive by supported returns, total highest produced properties, care and hotels including sectors, Smaller sectors. property of different performance in the differences significant were year, there but previous the to slightlycompared increased growth Capital return. income properties’ office of the decline continuous as well as database, inthe properties ofweight residential (6.0% in2015), increased the to markedly due mainly 2015, to decreased income net of the 5.6%. Compared income a net and of 0.6% growth of a capital consisting in 2016 6.2% to (6.2% in 2015), amounted market property Finnish onthe return total the Index, KTI the to According investment market by sector, structureThe of Finnish property 100 % 20 40 60 80 0 Care properties are included in ”Other” category in 2013 and 2014. and 2013 in category ”Other” in included are properties Care Care ■Other ■ Care ■RetailIndustrialResidentialHotel ■ Office ”The Finnish market”The property 2013 201420152016 30% 26% 26% 5% 8% produced a total return of produced atotal return 6.2% in 2016” 30% 25% 29% 7% 5% 29% 26% 29% 8% 5% EUR billion EUR 27% 26% 30% 8% 5% Source: KTI 43 4 Property sectors: market structure, practices and investment performance 44 4 Property sectors: market structure, practices and investment performance (CBD). district business central Helsinki in the construction under projects redevelopment major several and new one is also There Vallila, Leppävaara. and Pasila Sörnäinen, Kalasatama, including area, metropolitan Helsinki of the parts in various located are projects ongoing The construction. under was space office of new sqm 100,000 some year-end, At the area. Aviapolis in the Aviabulevardi and in Pitäjänmäki Garden Business Ultimes included projects completed largest The completed. was space of office sqm 2016,In 65,000 some years. in recent increased greatly thus has stock office The sqm. 30,000 around been has of use changes through reduction average annual The area. metropolitan Helsinki in the on average annually completed been has space office of new 2016, sqm and 97,000 some 2008 Between sqm Distribution stock by location, of office 37% ”Office construction volume construction ”Office 19% increased in 2016” 2008-2016 in area Helsinki metropolitan the in offices of Completions 100,000 150,000 200,000 250,000 300,000 sqm 50,000 44% 0 has beenestimatedbasedongrossareainformation. onrentable areahasn’tIf information beenavailable, rentablearea ■ RestofFinland ■ Othermajorcities area ■ Helsinkimetropolitan 08 09 00 21 02 21 04 05 2016 2015 2014 2013 2012 2011 2010 2009 2008 ■ RevelopmentNew Source: StatisticsFinland Helsinki metropolitan area. metropolitan Helsinki in the concentrated are and properties, park business and headquarter-type by dominated are investments office investors’ Foreign strategies. focused havemore to tend funds and companies property whereas portfolios, in their types office three hold all typically institutions Domestic area. metropolitan Helsinki in the mainly connections, traffic good near located properties is business-park-type category office third The area. metropolitan Helsinki inthe areas other in some and CBD Helsinki in the both found be can These headquarters. company as typically used buildings is single-tenant category second The areas. office recognised and centres in city located typically buildings, office tenant is multi- stock office of investable proportion largest The performance. investment poor their to due years inrecent rapidly decreased has share their although portfolios, property institutional Finnish in role played asignificant traditionally have Offices Players underway. were projects new three where Oulu in highest was volume The altogether. construction under space office of new sqm 39,000 some was there At year-end, 75% for volume. of this in 2016, Tampere accounting with completed was space office of new sqm 37,000 some area, metropolitan Helsinki the outside cities major six the In amounting to €1.7 billion. Several types of investors were were of investors types €1.7 to Several billion. amounting year, 31% some by previous the to in 2016 compared increased properties of office volume transaction total The properties. office Finnish in the investments significant have also Investment, Union and Immobilien Deka Niam, instance for investors, Foreign largest. is the Antilooppi of which funds, and companies non-listed specialised Technopolis and some well as as Sponda companies listed Keva, and Varma, Ilmarinen as such institutions Finnish large include sector office in the investors biggest The Source: KTI,RPTDocu Oy indefinite term with the agreed notice period. notice agreed the with term indefinite an for continues contract the which after years, five or three of period onafixed agree to common It is also landlord. and tenant the both for applies period same the and months, twelve or six three, are periods Typical notice buildings. office in multi-tenant applied commonly are terms lease Indefinite building. of the characteristics and location on the depending metre, square per €4 and €3.50 between vary properties office for costs Typical operating tenants. to separately charged be also can costs Operating costs. operational include which rents, gross often most are rents buildings, office multi-tenant In sub-categories. office different between significantly differ agreements of rental terms The varied. are market office in the practices Rental practices Rental in offices. investments new made also funds domestic Several acquisitions. several through portfolio its expand to continued Antilooppi players, domestic the Of Hansainvest. and Fund Strategies Nordic NREP’s Hemfosa, by made were acquisitions office major Other properties. commercial other nine and buildings 13comprising office portfolio, Omega called so the acquired Sachs, Goldman with together Valad Europe, inDecember, Also million. €130 for Varma from portfolio office an Partners, Capital Avant with together acquired, Partners Capital Tristan when inDecember, published was deal large Another in Keilaniemi. Center Science Life the acquired also Niam €160 for Elo million. insurer pension from properties office six bought who Niam, by made was acquisition largest The acquisitions. new some made in 2016, also but properties of office dispose to continued mainly institutions Finnish investors. foreign by out carried were transactions office largest The acquired. were old properties and new both and in transactions, involved Photo: Skanska CDF Oy rates remain high and rents are pressured. are rents and high remain rates vacancy areas, secondary in the whereas tenants, attracting continue areas inprime premises best The increased. have areas office secondary and of prime performance rental in the differences the years, past the During offices – market Rental Technopolis Varma. and Sponda, instance, by, offered for currently are concepts of space kinds These contracts. flexible very with use temporary and short-term for services business acquire and space rent can occupiers where concepts, space flexible or of co-working kinds new through need this to have responded owners supply. Property space office flexible more for a need up brought has demands flexibility occupiers’ in office increase the years, recent In Index. of Living Cost the to linked typically are rents Office charge. service separate a plus rent of afixed consist typically rents park Business facilities. meeting and services postal catering, cleaning, security, reception, supply, as such service extensive and agreements flexible offering by compete parks Business deals. in sale-and-leaseback applied typically also are of agreements kinds These applied. commonly are rents net agreements, these In years. twenty and ten – between long quite usually are terms the buildings, single-tenant In units. office in applied larger commonly are terms lease Fixed increasing in the Helsinki Helsinki the in increasing ”Office rents continue”Office CBD” 45 4 Property sectors: market structure, practices and investment performance 46 4 Property sectors: market structure, practices and investment performance free periods, flexible agreements or space improvements, improvements, space or agreements flexible periods, free rent- by attracted Tenants being issue. this are to respond to pursued being are of actions kinds Several investors. office for challenge severe most the remains rate vacancy high The annum. per sqm 300−400,000 at some years, in recent stable remained has take-up Gross figures. take-up positive despite high remains rate vacancy the development, new boost infrastructure traffic new and requirements and needs However, occupiers’ as years. several for negative been having after sqm, in2016, 64,000 some to positive turned of offices take-up net efficiency, space increased occupiers’ and conditions economic challenging Despite in 2016. decreased rates occupancy office well, as cities main other Inthe area. metropolitan Helsinki at 81.2% stood in the portfolios investors’ of large rates occupancy the database, rental of 2016. end the KTI In the at space office of vacant 1.2 sqm million some were There Catella. to 14% according at nearly year-end, at the stood in2016, and increasing continued of offices rate vacancy The in Espoo. Leppävaara and in Helsinki Ruoholahti instance, for include, development rental positive slightly or stable with areas best The question. in asset individual of the characteristics and location micro on the is dependent performance areas, office other In most 2016. in September database rental KTI in 86% the at some stood and years, in recent decreased has space of office rate occupancy the CBD, Helsinki in the in 2016. level of €31 sqm However,all-time-high per even an reaching quartile upper the with increase, to continued rents top The index. 1.1%, rental KTI the to according some by increased rents 2016, In office conditions. market challenging in the resilience its proven it has and Finland, in area office appreciated most is the CBD Helsinki The ”Net take-up”Net of space office turned positive inturned 2016” and whole Finland whole and occupancy rates in the HelsinkiOffice metropolitan area 100 70 75 80 85 90 95 %

2005

2006 WholeFinland HMA

2007

2008

2009

2010

2011 area metropolitan in the Helsinki of offices Gross take-up CBD Helsinki rent index office and occupancyKTI rate, 100,000 200,000 300,000 400,000 500,000 100 120 140 160 180 200 220 80 ■ Occupancyrate–– 2012 sqm

0 1995 1996 2006 1997 2013 1998 2007 1999 2000 2014 2008 2001 Rentalindex(HelsinkiCBD1993=100) Source: KTIRentaldatabase 2002 2009 2003 2004 2015 2010 2005 2006 2011 2007 2016 2008

2012 Source: KTI,StatisticsFinland 2009 2010 2013 2011 2012 2014 2013 2014 2015 2015 Source: KTI 2016 65 70 75 80 85 90 95 100 2016 % return decreased to 5.3% to (5.9% in 2015). decreased return in 2016, by 0.5% income and decreased properties of office values market the Index, KTI the to According years. recent in weak rather been has of offices performance investment the rates, vacancy high and demand sluggish the to Due efficiently. more right building lot’s the use to possibility the of because or old of the building characteristics technical of the because either is taken solution This constructed. is being one anew and demolished is being old building the use, residential into redeveloped is being property old office an where projects of the half almost In decade. past the during area metropolitan Helsinki in the use hotel or residential other, typically some into most developed being are or been have space of office sqm 390,000 some and increased, has projects of these amount and number however, the years, recent In slow processes. and planning restrictive to due out carry to impossible or difficult often however, are, projects of use Change explored. actively being also are opportunities Redevelopment developed. being are concepts service and of space kinds new and Total investments, returns on office 2000-2016 10 12 -6 -4 -2 0 2 4 6 8 % Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000

2001

2002

2003

2004

2005

2006

2007 Total return

2008 on average, showing a clear decrease from 5.0% in the from decrease aclear showing on average, at 4.7% 2016, stood they in October out carried Barometer, Property RAKLI-KTI latest in the and decreasing, continued have yields well. Office perform to continue offices CBD Helsinki conditions, market challenging the Despite clearly lower in all other regions. other in lower all clearly remains demand investment therefore, and area, Helsinki at the is, however, targeted mainly demand investment international and Institutional percentages. 0.5 than more by decreased yields and cities, major other to spread also year, compression yield past the During area. metropolitan Helsinki in the submarkets office well-established other in yields pressured also has demand investment Strong capitals. European other to compared gap apositive offers still Helsinki compression, yield the Despite well below this. currently are yields properties, year. best the For previous other European capitals European other inHelsinki yields and rents and Office 2009

2010

2011

2012

2013

2014

2015 Source: KTIIndex 2016

Photo: Skanska CDF Oy 47 4 Property sectors: market structure, practices and investment performance 48 4 Property sectors: market structure, practices and investment performance

Photo: Skanska CDF Oy Q4/2016 cities, European other Helsinki in and yields office Prime Q4/2016 rents in HelsinkiPrime office and other European cities, Copenhagen Copenhagen Amsterdam Amsterdam Stockholm Stockholm Budapest Budapest Brussels Brussels Moscow Moscow Helsinki Helsinki Warsaw Warsaw London London Madrid Madrid Dublin Dublin Berlin Berlin Milan Milan Paris Paris Oslo Oslo 011 10 9 8 7 6 5 4 3 2 1 0 0 0 0 0 0010 401600 1400 1200 1000 800 600 400 200 0 transactions. sale-and-leaseback major some and development new both to due mostly years, in recent steadily grown has investors by professional owned stock property retail The strong. remained thus has attractiveness their and market, well investment in the rather performed have properties Retail areas. city major in the located mainly are centres shopping biggest The sqm. 2million of some area retail leasable a total with centres shopping 97 are there Centres, Shopping for Council Finnish the to According cities. major in other 5.6 million and area, metropolitan Helsinki in the is located stock space retail of the 3.9 sqm million About properties. hotel includes also this data, Finland’s InStatistics Finland. in space of retail sqm 29 million some are there Altogether, Stock market retail The 4.2 Source: JLL,KTI(Helsinki) Source: JLL,KTI(Helsinki) /sqm/year % the Helsinki metropolitan area 2005-2015 area Helsinki metropolitan the in stock property retail of Development retail space under construction. In addition, some 200,000 200,000 some addition, In construction. under space retail of new sqm 150,000 than more were of 2016, end the there 25%. At some by decade, past the during markedly increased has area metropolitan Helsinki in the stock property Retail

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Photo: City of Helsinki / Tero Pajukallio 500,000 sqm has increased by 25% within ”Retail property stock in the property ”Retail Helsinki metropolitan area 0

2005

2006 the past decade”

2007

2008

2009

2010

2011 Source: StatisticsFinland 2012

2013

2014

2015 metropolitan area metropolitan Completed retail projects in the Helsinki (Seppä). The largest projects expected to be started in 2017 started be to expected projects largest (Seppä). The Jyväskylä and inTampere (Ratina) underway projects centre shopping major also are there region, Helsinki the Outside in Vantaa. centre city Kivistö the and in Espoo Lippulaiva in Herttoniemi, Tripla Hertsi in Pasila, inof 2017 Mall include started be to expected projects Large Omena. of Iso extension the and REDI include projects ongoing main The stations. railway and of metro vicinity the in mainly connections, traffic public good with units retail in 2017. in large is concentrated started development New be to planned are projects centre of shopping major sqm sqm 100,000 120,000 140,000 160,000 20,000 40,000 60,000 80,000

0 rentable area has been estimated based on gross area information. information. area hasbeenestimatedbasedongross area rentable hasn’tbeenavailable, area onrentable If information inDecember2016 underconstruction *Projects

2008

2009

2010

2011

2012

2013

Source: KTI,RPTDocu Oy 2014

2015

2016

*Dec 2016 49 4 Property sectors: market structure, practices and investment performance 50 4 Property sectors: market structure, practices and investment performance in bigger centres. For example, the Sello shopping centre centre shopping Sello the example, For centres. in bigger investors other with jointinvestments into enter often also Pension funds Finland. across centres shopping regional, whole, own typically institutions pension Finnish Many Group. Kesko to leased are properties of Mercada’s majority The in Finland. assets retail 31 and other centres shopping three owns who is Mercada, investor retail large in Tampere. Another centre Ratina the developing is currently Sponda region. Oulu in the Zeppelin Tampere and near Elo CBD, Helsinki in the Citycenter and Forum include centres biggest Sponda’s years. recent in investments centre shopping its increasing been has who is Sponda, investor centre shopping major Another asset. largest portfolio’s the being Omena Iso with Finland, across centres shopping 20 operates and owns currently Citycon centres. onshopping concentrates currently who is Citycon, in Finland investor retail specialised largest The retailers. main and investors international funds, and companies investment retail specialised institutions, domestic including is diverse, properties retail for base investor The universe. property invested 26% total of the some for account properties Retail Players in 2017. started be to planned is also property, hotel and of Vaasa, aretail Wasa Station, centre city the In border. Russian the to close inVirolahti, Village Outlet Zsar the and inKotka centre Old Port Kotka of the phases first the include planning under =project circle light project, of =size circle of size Major retail development projects in the Helsinki metropolitan area The administrator of this data is Helsingin kaupungin kiinteistövirasto. The data has been downloaded from the from downloaded been has license data The stations. and lines Line Rail kiinteistövirasto. Light @Jokeri kaupungin kanssa. Helsingin is data this of organisaatioiden administrator The mittaustoimen Helsingin is kuntien muiden creator alueen ja HSY:n original the and yhdessä kiinteistövirasto kaupungin kaupunkimittausosasto Helsingin is kaupungin data this of administrator The Map Region http://qgis.osgeo.org. @Helsinki Project. contributors Foundation Geospatial @ OpenStreetMap Source Open Information. 2017, Team, Geographic QGIS Development QGIS 2.18.3; QGIS using created Map

Creative Commons Nimeä 4.0 Kansainvälinen (CC BY 4.0). Additions to the map by KTI 2/2017. KTI by map the to Additions 4.0). BY (CC Kansainvälinen 4.0 Nimeä Commons Creative managed by CBRE Global Investors and Barings Real Estate. Estate. Real Barings and Investors Global by CBRE managed funds retail well as as Unibail-Rodamco, Wereldhave and as such funds and companies property foreign specialised some attracted also has market centre shopping Finnish The Onvest. company investment and Company Insurance Mutual Fennia Etera, include co-investors the in Pasila, of Tripla Mall project InYIT’s LocalTapiola’s funds. and SRV, Group’s OP and between Ilmarinen ajointventure by developed is being project REDI sqm 60,000 The underway. currently thatare projects development centre shopping major in two invested also have institutions Domestic companies. and funds established newly for opportunities new opened has which units, smaller sold have companies investment large and institutions years, recent In units. retail smaller also sometimes and properties, hypermarket own typically also Pension ininstitutions Pori. Puuvilla Renor’s in well as as in Lappeenranta, centre IsoKristiina Citycon’s in is aco-investor Ilmarinen SGroup. and Kesko Rodamco, of Elo, Unibail- consisting agroup by in Vantaa is owned centre shopping Jumbo the –while Etera and Elo Keva, – institutions pension by three jointly is owned in Espoo are majorare shopping centre ”REDI and Mall of Tripla”REDI

projects in Helsinki” in projects Helsinki Region Infoshare Region Helsinki

service 16.11.2016 using the the using 16.11.2016 service Top 10 Shopping centres in Finland CENTER KAARI JUMBO SELLO I VETURI WILLA MYLLY MATKUS OMENA ISO IDEAPARK retailers. international attracted have centres shopping in large and CBD Helsinki in the locations best the particular, In cities. in main supply space modern and population increasing the both by attracted market, Finnish the entered have chains retail international new several years, few past the During centres. shopping out-of-town with consumers for compete typically shops street high centre city cities, regional many In in Helsinki. retail prime in owners retail significant also are Ilmarinen and Keva as such investors office major a result, as and, buildings, office CBD inHelsinki located typically are shops street High Sagax. and NREP well as as Properties, of Trophi Serena and portfolios the manages who Redito, include segment in this investors active actively. Other portfolio its increased has investors, foreign from capital its raised has that Partners, Capital Sirius by established fund anew markets, unit retail smaller In the units. of retail kinds other and centres in retail invest Fennica and Yield OP-Rental fund funds, domestic other the Of properties. centre in shopping investors and developers also are SGroup and Kesko chains Retail cities. inother ones larger some and area Helsinki the in centres smaller on concentrating centres, in shopping invested also have eQ, and CapMan Aberdeen, by managed those as such funds, property Domestic Barings. from centre Kamppi in the stake a 50% acquired fund Cities 2017, European early In Estate’s inOulu. Real TH centre shopping Ideapark the by acquiring market Finnish the entered who Partners, Property Alma Swedish the and in Helsinki, centre shopping Kaari inthe invested who Niam, include market centre shopping Finnish in the players foreign New centre. shopping Kamppi in the investment venture ajoint into entered has Estate Real Allianz Also TIS

”New foreign”New investors enter

the Finnish shopping centre centre shopping Finnish the market” R ETAIL NLA ETAIL 1 4 8 6 00,992 7 5 5 9 4 9 8,500 5,454 5,000 5,000 8,375 3,415 7,445 7,900 1,712

N Mercada V K I C U P K W M kano Retail Centres Kuopio Centres Retail kano arma, CapMan Real Estate, NREP, HOK-Elanto Estate, Real CapMan arma, rivate investors rivate itycon Finland itycon nibail-Rodamco, Elo, HOK-Elanto, Kesko HOK-Elanto, Elo, nibail-Rodamco, eva, Etera, Elo Etera, eva, auppakeskus Mylly auppakeskus iam / Kannelmäen Kauppakeskus Lower Holding Lower Kauppakeskus /iam Kannelmäen ereldhave Finland, Kesko Kesko Finland, ereldhave a in Ow

n ers

Rental agreements are normally longer in the retail than in than retail in the longer normally are agreements Rental tenants. and investors of the preferences the to and unit of retail type the to both according significantly vary market retail inthe practices Rental practices Rental in particular. hypermarkets and centres shopping inlarge sales increased and hours opening longer as resulted has This size. or location of their regardless restrictions without open now be can shops all and deregulated, were units of retail of 2016, hours opening the beginning the In markedly. increased has units retail goods of daily size average the years, recent In products. is food €16.6 80% some to billion, of which amounted goods of daily In 2015, 9%. of sales some a share total the with market goods daily in the player largest third is the Lidl chain German The stores. smaller and supermarkets hypermarkets, – categories store in all operate 2015, They respectively. in 33% sales and of 46% of total shares Kesko, with and SGroup by is dominated market goods daily Finnish The applied in shorter leases. Other tenants typically have shorter shorter have typically tenants Other leases. inshorter applied sometimes options renewal with 15 even years, and ten to of five leases have often tenants anchor centres, In shopping premises. of their management the steering organisations management property in-house strong have both Group S and Kesko rent. net with contracts long-term relatively typically are agreements and driven, cash-flow increasingly are investors properties, supermarket and hypermarket In shops. street in high especially applied typically are of terms kinds These period. time infinite an for continued then are and period afixed for made first are agreements cases, many In years. is three space retail for term fixed minimum typical The agreements. with business their of continuity the ensure to want tenants as market, retail the in applied commonly more are terms Fixed market. office the

”Opening of shops hours were in deregulated the

beginning of 2016” of beginning

Source: Finnish Council of Shopping Centres Shopping of Council Finnish Source:

H K H R K E V L E H L EMPÄÄLÄ o ANTAA SPOO SPOO OUVOLA UOPIO AISIO AISIO ELSINKI ELSINKI YVINKÄÄ cation 51 4 Property sectors: market structure, practices and investment performance 52 4 Property sectors: market structure, practices and investment performance decrease compared to the previous year. Respondents year. Respondents previous the to compared decrease aslight shows which onaverage, month per sqm €100 per at some stood CBD Helsinki in the rents prime Barometer, Property RAKLI-KTI the to year. According past the during slightly decreased or stable remained have rents retail prime centres, shopping best in the and CBD Helsinki In the Esplanad. Galleria and Citycenter Kamppi, Forum, Kluuvi, including centres, shopping several accommodates also centre city The streets. two these interconnecting streets as well as Esplanade Northern and Aleksanterinkatu include streets shopping main CBD’s The in Finland. area retail prime the as position undisputed an has CBD Helsinki The centres. in shopping categories retailer different between of sales development in the differences however, were, significant There stock. centre shopping in increase the by explained partly was growth 2016. The 5.1% by 3.2% by in increased sales and centres shopping in of visitors number the Centers, of Shopping Council Finnish the and KTI to in2016. According sales retail overall than better perform to continued centres Shopping power. of purchasing growth the limit will which up, pick to is expected inflation the hand, other onthe but, taxation, easing and employment improving by supported are sales Retail 1.5% of some is expected. growth moderate 2017, For unemployment. a decreasing and slow inflation by supported was growth The development. of negative years several 2% by some in 2016 after increased sales Retail retailThe market in 2017 small. rather typically is rent of turnover-based share the but centres, shopping in increasing is gradually leases of turnover use The leases.

Photo: Sirius Capital Partners increased by 3.2% in 2016” ”Shopping centre sales sales centre ”Shopping acquisition of the Forum shopping centre increased retail retail increased centre shopping Forum of the acquisition Sponda’s transaction, single one market transactions the In of 4.4%. return atotal producing general, in properties retail than better performing continued centres at -2.0%. Shopping negative was growth capital and in 2016 6.0%, 4.0% was (3.5% in 2015). return Income to amounted investments property onretail Total return in particular. area metropolitan Helsinki in the supply increasing the to due increase to is expected rate vacancy however, retail the future, In the healthy, 94%. at remained some portfolios property retail of investors’ major rate however, occupancy the database, rental KTI Inthe towns. smaller and centres shopping some in rates vacancy the increased has which vacant, left been have units in larger and cities in smaller ones the premises, Anttila former the Of premises. several up taken have Tokmanni store department and Lidl chain store grocery German growing rapidly the instance, for re-let; to easy relatively be to proven have locations in best premises the these, Of centres. city the outside properties single-tenant in some also and centres shopping in several centres, city in main vacant premises large left chain store department Anttila of the In2016, however, cities. major bankruptcy the low in most remained has space of retail rate vacancy The changes. cyclical to vulnerable less be to seem and average, the above clearly remain locations best very in the rents However, future. in the stable remain to rents expected and another in Ylöjärvi, close to Tampere. to close in Ylöjärvi, another and in Helsinki centre retail one well as as properties, retail five comprising portfolio sqm a47,000 including transactions, property retail several out carried fund eQ’s respectively. €115 to amounting million, €90 Sagax, and and of Sirius acquisitions portfolio the included transactions property retail major 22%. to Other transactions of all share properties’ to 69%. to 63 from increased has centres in urban living population Finnish of the share the years, 20 rapidly. past the In proceeded has but latein Finland, quite started Urbanisation locations. in urban especially steadily, increased has dwellings smaller for demand the Therefore, 48%. is currently households single-person of share the InHelsinki, persons. two or of one consist 75% some households of Finnish Currently decreasing. constantly been has household of aFinnish size average The buildings. in apartment are dwellings of the 44% than More homes. single-family are 40% about these, Of 263 sqm. million some comprising in Finland, dwellings million 2.6 some are There Stock sector residential Rental 4.3 Total return on retail investments, 2000-2016 Prime retail rent in the Helsinki CBD 100 110 120 130 140 /sqm/month 40 50 60 70 80 90 10 15 20

-5 1995 % 0 5 1996 Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000 1997 2001 1998 1999 2002 2000 2003 2001 2004 2002 2005 2003 2004 2006 2005 2007 2006 2008 2007 Finnish households by size by households Finnish 1,000,000 1,200,000 No. ofhouseholds Total return 2008

200,000 400,000 600,000 800,000 2009 2009 2010 Source: RAKLI-KTIPropertyBarometer 2010 0 2011 2011 1985 2012 2012 1987 2013 2013 1989 2014 Source: KTIIndex 3+ residents 2 residents 1 resident 2014 1991 2015 2015 1993 2016 1995 2016 (autumn 2017) 1997 1999 2001 2003 2005 2007 2009

Source: KTI 2011 2013 2015 53 4 Property sectors: market structure, practices and investment performance 54 4 Property sectors: market structure, practices and investment performance offering housing for specific groups. specific for housing offering wellfoundations as companies, bymunicipal mainly developed being is currently housing Subsidised based. cost- are rents stock, subsidised of the majority in the and, selection tenant for rules strict specific have Some forms. different between significantly vary supply housing for subsidy of public types of different regulation and terms The businesses. of their part alimited for status hold this Avara VVO, SATO market, and residential in the players major of the example, For status. utility public aspecial granted been have which organisations some well as as disabled, the or students as such groups specific for housing rental offering organisations non-profit by owned are dwellings subsidised Other companies. daughter municipalities’ by owned are dwellings, subsidised 220,000 majority, some The housing. of rental development for subsidy interest an or loans state-guaranteed as subsidy, such of public kind some with provided been have 375,000 some apartments, these Of in Finland. apartments rental 840,000 some are there total, In at 32%. stands country whole the for rate the while dwellings, inlive rented 43% some of households area, metropolitan Helsinki whole the In rented. are dwellings of 48% all some InHelsinki, on average. country whole in the than cities in major common is more housing Rented houses. single-family and houses terraced and detached well as as apartments including housing, of forms in all is widespread ownership Home homes. in owner-occupied live 65% households of Finnish About Photo: SATO ”Rented housing is common ”Rental residential”Rental stock is increasing rapidly” increasing in major cities” major in 20 applications comprising 1,000 rental dwellings, mainly mainly dwellings, rental 1,000 comprising applications 20 2016, In price. some at market let freely be can dwellings the period, this After levels. rental at moderate tenants low-income to rented be to have dwellings the period which during guarantee, state and subsidy interest year ona10- is based framework This cities. in major dwellings rental priced of moderately supply the boost to framework subsidy anew introduced 2016,In government the to professional investors. According to KTI, more than than more KTI, to According investors. professional to sold or by developed is being construction housing family multi- of all RT, third one about Industries Construction of Confederation Finnish of the estimates the to according and housing, rental for demand investment strong on the based is mainly in2014. growth The 25,000 some and year previous in the 33,000 than less to in 2016, compared started was dwellings new 38,000 of some construction the Finland, of Statistics statistics preliminary the to According 2016. in increased substantially construction Residential investors. private other or households Finnish by is owned dwellings, 300,000 some stock, non-subsidised of the majority the and years, in recent dwellings rental in investments their increased also have households Finnish investments. residential their increased have investors foreign well as as funds and companies property institutions, groups, investor all investors, professional the Of stock. subsidised of restrictions of the termination the through extent, lesser a to and, construction, new through mainly years, in recent markedly increased has stock The dwellings. 464,000 some to amounts currently stock housing rental Non-subsidised location. dwelling’s the well as as size, and income household’s onthe depends of subsidy amount The dwellings. non-subsidised and subsidised in both living tenants for granted be may subsidy This support. housing public through subsidised be Tenants also may low income with system. subsidy new the with housing priced of moderately production the start will they that announced Taaleri, and Auratum by managed those including funds, property Some status. utility public traditional the without companies to granted be also may subsidy subsidy. This new this granted were area, metropolitan Helsinki inthe located and sold some 8,500 subsidised dwellings to Y-Foundation, Y-Foundation, to dwellings subsidised 8,500 some sold and transaction amajor out in 2016, and carried VVO holdings, subsidised their reduced years, have, in recent in particular SATO and VVO in Finland. companies investment property residential specialised biggest the VVO, are SATO Avara and investors. small by is held apartments, 300,000 majority, some The dwellings. 164,000 some comprising currently years, in recent rapidly holdings their increased have investors professional called so- the market, residential rental non-subsidised In the companies. non-profit private, by is owned stock subsidised of the rest The apartments. 47,000 around with segment in this player isbiggest the of Helsinki, city by the owned a company Oy, Heka municipalities. Finnish the by is owned dwellings, 221,000 some stock, housing subsidised of the majority The Players year-end. at the construction under were 2016, 4,100 dwellings some and in cities major in other 3,000 some and area metropolitan Helsinki in the completed were dwellings rental 7,000 *Estimate Residential construction activity construction Residential Single-family homes Single-family Subsidised Non-subsidised Non-subsidised buildingsApartment Started residential dwellings Subsidised Non-subsidised Total ”VVO and SATO”VVO the are two largest residential property Total 838,000 rental apartments rental Total 838,000 Ownership structure of in rental Finland apartments investors in Finland” in investors 221,000; 26% 153,000; 18% 34,500 25011,600 12,500 11,200 12,500 11,200 23,300 10021,200 21,000 9,800 0021 0221 042015 2014 2013 2012 2011 2010 11,000 25,200 33,700 12,700 8,500 8,500 164,000; 20% 13,900 24,800 31,000 20,100 6,200 6,200 9,800 9,800 300,000; 36% Source: ARA,StatisticsFinland,SuomenVuokranantajat,KTI funds targeted at private investors have been established, established, been have investors at private targeted funds investment mutual special open-ended new some years, two past the In institutions. at domestic targeted are Estate Real LocalTapiola and ICECAPITAL instance for by managed Funds investment. property in residential specialising funds property non-listed several currently are There development. housing in new leverage use to possibility temporary the by boosted currently also are investments residential investors’ Institutional funds. and companies property specialised through investment residential to exposure indirect significant have also institutions Many portfolios. in their dwellings rental thousand several have all Elo, instance, for and Keva Varma, Ilmarinen, and market, investment institutional in the sector recognised a are properties Residential market. residential rental inthe players significant also are funds pension Many in Finland. investors property largest of the ranking in the three and one hold positions SATO and VVO currently development. own their through and transactions major several through both portfolios, non-subsidised their SATO and VVO increased Both portfolio. residential its doubled than more thereby who ■ ■ (non-subsidised) ■ Households /privateinvestors (non-subsidised) ■ 13,200 21,500 19,600 27,900 6,400 6,400 8,100 8,100 Subsidised /otherowners Subsidised /municipalities investors Professional properties continueproperties to grow” funds investingfunds in residential ”Special mutual property property mutual ”Special 18,500 18,000 25,400 11,100 7,400 6,700 7,400 6,700 25,800 32,900 24,400 17,300 8,500 8,500 ,0 6,500 6,500 ,0 6,500 6,500 Source: Statistics Finland, ARA, RT ARA, Finland, Statistics Source: 28,500 60034,000 36,000 29,200 17018,700 21,700 2016* 7,500 7,500 26,000 26,700 2017* 8,000 8,000 7,000 7,000 55 4 Property sectors: market structure, practices and investment performance 56 4 Property sectors: market structure, practices and investment performance period. It is also possible to agree on a certain fixed period, period, fixed onacertain agree to possible It is also period. indefinite an for made typically are agreements Rental levels. rental or periods rental for restrictions no are there Currently, 1990s. the during deregulated gradually were dwellings rental market free for Rents practices Rental APG. fund pension Dutch the by is owned 23% company of the another of SATO, majority and the owns currently Balder company property listed Swedish the instance, for market: residential Finnish in the indirectly invested is also capital Foreign in December. transactions in two investor US unnamed an with in partnership apartments 3,300 some acquired having announced who Partners, Capital Avant through market property residential Finnish in the invested also was capital year. the International throughout transactions in several cities in major of apartments hundreds acquired NREP mandate. investment property residential Nordic million a€400 awarded BVK whom to CapMan, by is managed portfolio The LocalTapiola’s fund. from portfolio residential million a€80 acquired (BVK) Versorgungskammer Bayerische German the spring the In market. the entered investors new in2016, several and markedly increased market residential Finnish in the interest investor Foreign private investors. to distribution for platform agood create networks branch whose Ålandsbanken, and Management Property OP by managed are investors at private targeted funds residential largest The of capital. plenty attracted have these and ”Several new foreign investors”Several entered the residential market Index (2000=100) Residential and price rent indexes, Helsinki metropolitan area 100 120 140 160 180 200 in 2016” in 80

2000 –– Rents–– 2001

2002

2003 Prices

2004

2005

2006

2007

2008 rents are cost-based. are rents used, are subsidies or loans housing state long-term where stock, ARA-housing In so-called selection. tenant levels and rental both to related restrictions be might –there subsidy of form onthe –depending stock housing subsidised the In buildings. and areas in different conditions market prevailing to increases rental adjust to landlord the allows and inparticular, investors by professional is used of indexation kind This cent. per of 5 3or aminimum instance for increases, oflevel rental onahigher agree to common It is also used. most the being index of living cost the with indexed, typically are Rents period. rental the of length onthe depends also period the but months, three is minimum period notice the landlord, the For conditions. specific certain under contract the terminate only can landlord The month. one typically period, notice agreed an after contract the terminate to right the has tenant The notice. further until afterwards continuing ayear, agreement as the with such but lower than in the non-subsidised market. non-subsidised in the than lower but stock, subsidised in traditional than higher be to expected are rents apartments, these In refurbishments. and repairs for reserved and collected amount investor, the for well as as the to paid of dividend amount the increases, rental annual for restrictions are there model, subsidy 10-year new the In market-oriented. typically are rents but of buildings, period holding the or selection tenant for conditions varying be might subsidy, there interest with produced dwellings some In 2009

2010 ”Regulation of the residential 2011 rental market is liberal”

Source: KTIandStatistics Finland 2012

2013

2014

2015

2016 Largest residential transactions portfolio in 2016 major several by boosted was volume inlevel 2016. The arecord reached volume transactions property residential the market, investment property professional the In negative. be to is expected development price the regions, in other whereas areas, city growing in the apartments insmall strongest be to continue 2017. will increase The in on average 1.8% by country whole in the increase to prices housing forecasts PTT Research Economic Pellervo 0.4%. some by decreased dwellings new for by0.1%. Prices decreased they country in the elsewhere by 2.1%, whereas increased prices area, metropolitan in 2016. Helsinki the In onaverage country whole in the 0.9% some by increased dwellings old for residential prices Finland, of Statistics statistics preliminary the to According residentialThe market in 2017 Eastern Helsinki in 300 rentalapartments As OyVanhalinna, over Vantaa in Helsinki,Kerava and 356 rentalapartments apartments Over 600rental 1,015 rentalapartments 1,255 rentalapartments Tampere regions mainly intheTurku and 1,800 rentalapartments 1,344 rentalapartments 1,344 2,000 rentalapartments 2,274 rentalapartments cities) (severalapartments 8,517 subsidizedrental /PORTFOLIO ASSET Prices of old residential dwellings, index (1983=100) 100 200 300 400 500

1985 Helsinki metropolitan area Helsinki metropolitan 1986 1987 1988 2016Q1-Q2 2016Q4 2016Q4 2016Q4 2016Q2 2016Q2 2016Q3 2016Q2 2016Q2 2016Q3 1989 DATE 1990 1991 1992 1993

1994 Other areas

decision madedecision by ARA) 1995 536 (based on the the on (based 536 1996 PRICE (M PRICE 1997 n/a n/a n/a n/a n/a n/a n/a n/a 80 1998 Whole Finland 1999 €

) 2000 2001 residential property transaction volume amounted to some some to amounted volume transaction property residential the Altogether, companies. construction from apartments new purchase to continued also funds property Several SATO. and Elo Partners, VVO, Capital Avant Y-Foundation, by made were acquisitions biggest The apartments. 1,000 and 500 between deals several and acquired, were apartments 1,000 than more where transactions seven were There buildings. residential of existing transactions 125% compared to the previous year. previous the to 125% compared of some agrowth in2016, billion represents which €2.8 2002 Nordic Strategies FundNordic Strategies II Avant Capital Partners & Partners Capital Avant Avant Capital Partners & Partners Capital Avant 2003 Nordea Life Assurance Assurance Life Nordea unnamed U.S. investor U.S. unnamed unnamed U.S. investor U.S. unnamed Versorgungskammer Versorgungskammer (managed by NREP) by (managed Elo Mutual Pension Pension Mutual Elo

AOCroainSuomen Laatuasunnot SATO Corporation SATO Corporation 2004 transaction volume reached a VVO Group Plc Group VVO PURCHASER Y-Foundation Finland Ltd Finland Bayerische Bayerische Insurance

new record level in 2016” 2005 (BVK)

”Residential property property ”Residential 2006 2007 2008 2009 2010

SSR Uusimaa Oy, Pohjola Pohjola Oy, Uusimaa SSR 2011 Itä-Suomi, JM Suomi Oy Itä-Suomi, Rakennus Oy Keski- ja ja Keski- Oy Rakennus LocalTapiola General, Shareholders of SVK ICECAPITAL Housing 2012 Source: StatisticsFinland LocalTapiola Life LocalTapiola Shareholders of VVO Group Plc Group VVO VVO Group Plc Group VVO Tapiola KR IV KR Tapiola

YH Kodit Oy Kodit YH 2013 Yhtymä Oy SELLER Fund II 2014 n/a Oy 2015 Source: KTI 2016 57 4 Property sectors: market structure, practices and investment performance 58 4 Property sectors: market structure, practices and investment performance transactions portfolio Volume residential of increase by some 0.5−1.5% per annum in 2017 0.5−1.5% some by annum 2018. and per increase will cities inmain rents forecasts, KTI the to According in 2016. onaverage cities main in other 0.7% and area, metropolitan of 1.5% Helsinki in the increase show an indices rental KTI conditions. economic challenging the and supply increasing both to due areas inmost stopped or down slowed2−3.5% in rents In2016, annually. however, increase some by slightly less, have increased rents cities, main other In 3−5% annum. some by per increased area metropolitan Helsinki in the 2010 rents 2015, and Between residential average household size. in adecrease and urbanisation continuing by strengthened is demand The cities. major inthe apartments small for especially strong, remains housing rental for Demand 1000 MEUR 0.0 0.5 1.0 1.5 2.0 2.5 3.0

Helsinki metropolitan area and other major cities major other and area Helsinki metropolitan Residential index, rent KTI 0.12 2006 .40.13 0.14 10 12 -4 -2 %

0 2 4 6 8 2007

Market rents, new agreements Annual changeandforecast 2001 2008 0.26 2009 2002 0.17

Helsinki metropolitan area Helsinki metropolitan 2010

2003 0.26 0.27 2011

2004 2012 0.66 2005 2013 0.70 2006 2014 1.25 2015 2007 Source: KTI 2.80 Other majorcities 2016 2008

2009

2010 have refrained from increasing rent for 2017 for to rent in order increasing from refrained have landlords some Therefore, price-sensitive. more become have tenants and increased, has of tenants supply, turnover However, increasing the with apartments. developed at well newly as as connections transport public good with at locations targeted is currently demand Strongest some 96% in large investors’ portfolios on average, but have have but average, on portfolios investors’ inlarge 96% some at strong, remain portfolios of residential rates Occupancy rates. occupancy good maintain

2011

2012 slowing growth ”Rental down in the Finnish residential 2013

2014

2015 market”

2016

2017

2018 Source: KTI

Photo: SATO income of 5.1%.income net and of 2.8%, in 2015), growth of acapital consisting (8.8% 8.0% to amounted properties on residential return 2016, In total years. the throughout positive remained has growth well in 2016. Capital perform to it continued and 2008, since year every Index KTI in the sector performing best the been has residential sectors, property main the Of market. investment in the attractiveness sector’s the supporting driver main is the which strong, remained has performance investment properties’ Residential supply. increasing year, to past due the slightly during decreased Photo: SATO / Antonin Halas 2000-2016 investments, property Total residential on return 10 12 14 % 0 2 4 6 8 Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000 2001 2002 2003 2004 2005 2006 2007 2008 Properties used for the supply of different kinds of public of public kinds of different supply the for used Properties Stock 4.4 Public use properties properties to highly specialised large hospital buildings buildings hospital large specialised highly to properties office normal from varying segment market diversified a are services of public provision the for used Properties investors. attract to started also have buildings educational instance for properties, of public kinds other years, past the during but properties, at healthcare targeted mainly first was interest Investor years. in recent market investment in the attractiveness their increased have services

Total return 2009 2010 2011 2012 2013

Source: KTIIndex 2014 2015 2016 59 4 Property sectors: market structure, practices and investment performance 60 4 Property sectors: market structure, practices and investment performance markedly in the coming years. coming in the markedly increase to is expected segment ofmarket this potential Investment provision. service for needed premises the and services the both providing for opportunities alternative inconsidering interested increasingly also are operators sector public and investors, private attract to started recently just has market The properties. of these owners predominant the still are state Finnish the and Municipalities groups. target specific for offered housing serviced and company investing in healthcare properties, was listed in listed was properties, in healthcare investing company 2017, In of €539 million. a portfolio Hoivatilat, Suomen aproperty has currently and years inrecent markedly increased has Hoivakiinteistöt eQ fund mutual special eQ’s Rahastoyhtiö. Titanium and Capital, Horizon Northern Bank, eQ by managed are properties in healthcare investing funds property largest The people. elderly for facilities living at assisted targeted been typically have sector healthcare in investments Pension funds’ investors. foreign specialised some and funds property domestic investors, institutional include sector investment property healthcare inthe Players investors. property and providers service both for opportunities new up opening is also reform approaching the by caused provision service social and healthcare in the change structural The population. of the ageing the with is increasing properties sector social other and healthcare for demand The Players investors. sector private from premises office normal rent to organisations sector public for common increasingly It is also facilities. sports well as as buildings cultural and educational various instance, for own, investors sector Private providers. service sector public for rented are that assets individual some are there portfolios, investors’ In properties. of these supply total the to in relation small rather is still investments of private amount the segments, property use public In other year. previous the to compared billion of €0.6 increase an €1.6 some of to 2016, end at billion the showing amounted investors professional by owned properties healthcare the of value market the estimates, KTI the to 2015. According of end at the 12.4 sqm million some to amounted facilities of healthcare stock total the Finland, Statistics to According facilities. the operated have and services social provided also have which organisations, sector public other and municipalities by owned been have traditionally facilities of these most context, Finnish In the properties. hospital even and facilities medical facilities, care day people), disabled well children’s as as patients (e.g. mental people, elderly groups target different for homes nursing and facilities living of assisted consisting segment market a diversified are properties Healthcare in 2016. portfolio their divested they but sector, property care in the active manager fund another been has Management Asset Trevian Exchange. Stock Helsinki of Nasdaq list main the ”Public use properties attract attract properties ”Public use investors” authorities, which also means that the operators need to to need operators thatthe means also which authorities, from a licence for apply have to operators the sectors, service most In municipalities. the to services their provide typically who operators, private to rented are investors by private owned properties care of health majority The applied. be can practices market office normal users, various to adaptable in premises whereas long, rather typically are agreements rental properties, use special In in question. property of the type on the depend sector property use public in the practices Market practices Market million, respectively. €65 and of €22 prices for fund Management’s Trevian Asset from portfolios property care acquired both who Managers, Investment AXA and Group Property Pioneer include market property care Finnish inthe players foreign New Helsinki. Kalasatama, in construction under is that currently centre wellbeing and health inanew invested has Deka German The agencies. public by used properties in office invested mainly has company in 2016. The acquisitions several through in Finland portfolio its expand to continued who Hemfosa, is market Finnish in the active investor Swedish Another properties. educational some also are there portfolio, Finnish million €227 company’s the In sector. property healthcare Finnish inthe investor foreign largest the is currently Hemsö Swedish The in December. properties of 16 care a portfolio acquired who fund, Care Aged Nordic Capital’s Horizon Northern by out carried was deal portfolio Another transactions. intwo portfolio its divested Trevian’s fund Also Hoivakiinteistöt. eQ by Iportfolio Healthcare Capital’s Horizon Northern of the €155 the was acquisition million transaction biggest The holdings. their divested funds some as made were transactions portfolio 2016, In large however, several properties. smallish afew only with portfolios or assets individual developed of newly consisting small, rather typically were transactions property healthcare years, In previous buildings. office authorities’ public and oneducational made were transactions several In addition, million. €500 some to amounted properties of healthcare volume transaction The in 2017. capital new attracting continued properties use Public 2017 in Market by net income. driven strongly are investments sense, this In refurbishments. for even cases, in many and, insurances, and tax property maintenance, for is responsible tenant the where leases, net commonly most are agreements 10−15 Lease instance years. long, for typically are properties of healthcare Leases operator. aprivate to premises the leases further or itself services the provides either which municipality, a to rented directly be can properties cases, some In investors. and developers property the for demands certain set also requirements These property. the of use specific onthe depending vary which requirements, technical strict fulfil and authorities the by approved be to need facilities the Even companies. solid financially be logistics space. logistics efficient modern towards demand space the reshaping and increasing are systems logistics and chains of supply reorganisations well as as sales of retail restructuring trade, foreign well. as Increasing recently markets investment the in sector of this emergence in the recently, resulting quite emerged only has players other from demand and market, the dominated have players major These systems. logistics and warehousing in-house centralised pursued traditionally have chains retail major the context, Finnish In the area. metropolitan Helsinki the surrounding and connections traffic good with inmunicipalities increased has supply the Inparticular, connections. traffic new and demand in space changes of both aresult as years in recent rapidly developed has in particular properties of logistics stock the these, Of sub-categories. main the are properties logistics and warehousing modern and properties manufacturing light market, investment the In owner-occupied. typically are properties manufacturing corporations’ industrial Large basis. customer and investor a heterogeneous well as as practices, and structures market varying with sub-categories various into divided be can market property industrial The 13%. some for accounts area metropolitan Helsinki the this, Of Finland. Statistics to according metres, square million 70 some to amounts stock property logistics and industrial Finnish The Stock 4.5 Industrial /logistics market values. market of development healthy and return income high both by supported was performance 9.8% investment in 2016. The of return a total produced properties healthcare Finnish 2000-2016 Total return investments, on industrial property 10 12 14 -6 -4 -2 % 0 2 4 6 8 Capital growth ––– ■Capitalgrowth ■ Incomereturn 2000 2001 2002 2003 2004 2005 2006 2007 2008 market, but the situation has changed in recent years as as years in recent changed has situation the but market, property light manufacturing and logistics in the common recently, relatively very until up was, Owner-occupation Players in the logistics property market is Posti Kiinteistöt, the the Kiinteistöt, is Posti market property logistics in the player significant Another in Lahti. instance for properties, manufacturing and logistics some owns also Renor company investment and development property Finnish The properties. industrial and in logistics invest also Liikekiinteistöt eQ and Toimitilakiinteistöt OP as such funds, domestic of the Some portfolios. in institutional represented typically also are properties industrial and Logistics Luxembourg. and Sweden Finland, from come investors equity company’s The in Finland. sqm 103,000 of some area atotal with 29 assets comprising aportfolio acquired Properties, CTV Catella, by managed and in Sweden based company property 2016, In established Renting. anewly Nordisk RBS and &Partners, Risan Ness, Norwegian the include segment in this investors foreign in 2016. Other portfolio property manufacturing and logistics their increase to continued NREP by managed funds Also, transactions. several through portfolio property industrial Finnish its increasing continued Sagax AB company listed Swedish The Finland. across properties manufacturing and logistics 79 owns currently still but years in recent portfolio its from assets disposed has company The sector. property logistics Finnish in the investor specialised largest is the Logicor corporations. retail and industrial large instance, for include, occupiers owner- Big owner-occupied. be to 85% is estimated about properties, warehouse and of industrial stock total the Of players. foreign and funds property institutions, domestic including investors new is attracting sector emerging This investors. to properties of their many sold have occupiers

Total return 2009 2010 2011 2012 2013

Source: KTIIndex 2014 2015 2016 61 4 Property sectors: market structure, practices and investment performance 62 4 Property sectors: market structure, practices and investment performance area in Vantaa, the rents are typically €2−3 higher. typically are in Vantaa, rents the area €10-11 at some stand airport the In sqm. per municipalities surrounding and area metropolitan Helsinki inthe areas logistics best the levels for rental quartile upper the database, KTI the In costs. construction high by explained partly high, relatively are premises logistics modern levels for rental comparison, However, ininternational years. inrecent stable fairly remained have rents property logistics and Industrial at 84% in 2016. stood area metropolitan Helsinki in the premises industrial and logistics for rates occupancy database, rental KTI the In conditions. economic by pressured demand weak and supply space new both to due years in recent increased have properties logistics and industrial modern for rates Vacancy industrial/logisticsThe market in 2017 rating. tenant’s the by determined partly levels are rental of leases, kinds Inthese years. fifteen or ten is typically period the contracts, fixed-term In buildings. in multi-tenant premises smaller for used only are leases gross Finnish Traditional rents. triple-net or net typically are Rents markets. logistics and industrial in the vary practices rental needs, user and stock available the of both heterogeneity of the Because practices Market investment. and development property manufacturing and inlogistics players smaller numerous are there company. addition, In service e-commerce and logistics postal, Finnish of the arm property Photo: Ciity of Helsinki / Antti Pulkkinen a total return of 6.0% in 2016 of 6.0% (6.2% in 2015). income return Net a total produced sector property /warehouse industrial Finnish The use. own its for facility logistics anew is developing Lidl of Helsinki, north also Järvenpää, In construction. under is currently sqm, 112,000 comprising phase, 2016, second the and summer in completed was project Freeway of the phase first sqm 77,000 SGroup’s of Helsinki, north Sipoo, In themselves. facilities logistics their develop typically retailers Major Äänekoski. in underway currently investment facility industrial major company’s the to is related which property, logistics sqm a28,000 is developing MetsäFibre area, harbour Vuosaari the In in Pitäjänmäki. property centre data sqm a 30,000 is developing Sonera In Helsinki, airport. the to close also in Viinikkala, projects logistics two start to is about YIT addition, In headquarter. company’s the as used also be to property alogistics completed just has Logistics HUB and terminal, cargo anew developing is currently Finnair airport, of the vicinity the In areas. harbour Vuosaari and airport the in concentrated been recently has area metropolitan Helsinki in the properties industrial and of logistics development New Renting. Nordisk RBS and Sagax Properties, CTV out carried those were transactions biggest The million. €500 some to amounted properties industrial and of logistics volume transactions In 2016, total the will be opened in spring 2018. in spring opened be will Helsinki Hotel Lapland in Oulu. another in Tampere and one also but in Lapland, 17 located hotels, mainly operates Hotels, Lapland chain, hotel owned privately biggest The of 2017. summer in the George St. hotel newest its open will group The area. metropolitan Helsinki in hotels the design and 9luxury operating currently chain, hotel is agrowing Hotels 11 with Western Collection Kämp hotels. Best by followed Finland, 17 across hotels operates Hotels Finlandia 23 have Hotels hotels, and Scandic chains. inhotels its 43 has currently instance, for Indigo, and Inn Holiday Cumulus, brands the under hotels operates which Restel, country. the across hotels 50 some with inFinland, operator hotel biggest is the SGroup ofrooms. hotel supply of the half than more for account together all which Scandic, and Restel SGroup, include inFinland operators hotel main The properties. hotel some own also particular, in S Group operators, Some portfolios. in their properties hotel hold some also institutions biggest of the Most hotels. of 14 aportfolio with Pandox Swedish the and Finland, in properties hotel 38 owns which fund, hotel CapMan’s are in Finland owners property hotel biggest two The Players region. Uusimaa in the located are rooms 14,000 some with 113 these, Of rooms. hotels 50,000 some comprising Finland, in hotels 608 are there Finland, Statistics to According Stock Hotels 4.6 -1.6%. at negative was level, at ahigh at 7.7%. growth remained Capital through his investment company AB Invest. AB company investment his through in Helsinki area in Hakaniemi ahotel develop to plans also who Buchardt, Arthur investor hotel Norwegian the by developed was Clarion Jätkäsaari The in October. opened were in Vantaa, of which both airport of the vicinity in the another and in Helsinki in Jätkäsaari hotels: one Clarion two the were of these largest The area. metropolitan Helsinki inthe opened were hotels 2016,In new five France. and Spain US, the from in2016visitors Finland to included travels their increasing groups Other future. inthe Lapland to trips their increase further to agencies travel Chinese by plans major are There in particular. year, in December of the end the towards accelerated year, increase the and previous the to 27% by compared increased tourists Chinese by spent ofnights hotel number The visitors. German and Swedish include groups visitor foreign large other two The 10%. than more by decreased spent of nights number the although Finland, visiting group tourist foreign biggest the as position their retained year. Russians previous the to 3.2% in 2016, some by compared grew hotels Finnish the in of tourists number the Finland, Statistics to According at 68%. higher clearly was rate occupancy the region, Uusimaa the In average. on at in 2016 54.5% stood country whole in the rooms of hotel rate occupancy the Finland, Statistics to According 2017 in Hotels market differently. allocated be might tenant and landlord the between responsibilities use, in retail example for space, of other amount is asignificant there where centres city in properties some In costs. operational and maintenance all for is responsible operator The agreements. rental net long, triple favour typically investors property hotel Finnish yields supported the capital growth ofproperties. hotel growth capital the supported yields of 12.4% in 2016 (5.2% return in 2015).total Decreasing a delivered properties hotel Index, KTI the to According in 2016. transaction property hotel significant only the was This fund. CapMan’s 2016 from in summer property George St. the 2017. acquired Immobilien Deka of half first in the completed be to scheduled both and buildings, of old office redevelopments both project, George St. Kämp’s and Haven of Hotel extension the CBD: Helsinki in the underway projects two were there end, year At the hostel). (Forenom Pitäjänmäki and (Cumulus) Meilahti (F6), centre incity located are and properties, office old from converted all were hotels new three other The

Photo: City of Helsinki / Antti Pulkkinen 63 4 Property sectors: market structure, practices and investment performance 64 5 Property markets in different regions – outlook for 2017 some 36% of the Finnish GDP. 36% Finnish of the some 31% about delivers for and jobs of all accounts population, 26% Finnish of the it accommodates but country, entire of the 1.2% for area of the accounts area land region’s The 1.5 inhabitants. million almost has and of 14 municipalities consists region Helsinki of 1.1 entire The people. million apopulation has Kauniainen, Vantaa and Espoo, Helsinki, of cities of the consisting area, metropolitan Helsinki The area 5.1 Helsinki metropolitan The context. portfolio in awider included typically are investments These markets. residential and in retail especially cities, insmaller operate also companies and funds domestic Some owner-occupiers. and investors local by dominated traditionally are regions city insmaller markets Property segments. market selected in their cities in these invest also investors international Some areas. market in these only operate who players local are there cities, these all In strategies. investment in their markets target as centres” “growth these and area Helsinki the define investors domestic Many Kuopio. and Lahti Turku, Jyväskylä, of Tampere, Oulu, centres growth regional the include markets second-tier The region. capital in the invest only players global large many and investors, foreign among is well-recognised area The area. metropolitan Helsinki in the concentrated is also market investment property institutional The area. metropolitan Helsinki inthe is located inFinland stock office total of the 60% some by value, measured markets: office in the prominent most is the dominance Its market. property Finnish in the region dominant is the area metropolitan Helsinki The outlook for 2017 different regions– marketsin 5 Property Percentage of jobs, 2015 jobs, of Percentage structureThe of the economy 15.7% 13.6% HELSINKI REGION 25.4% 0.4% 44.9% andforestry ■ Agriculture ■ Retail ■ Manufacturing ■ Publicservices ■ Privateservices by the Helsinki Region Chamber of Commerce. Chamber Region Helsinki the by review, published industry region Helsinki the to according on average, country (25%) entire in the than lower clearly are (16%) services in manufacturing public and of occupations proportions the hand, other the On country. entire the across -than -59% higher is significantly sectors retail and service private in the of jobs proportion the region, Helsinki the In base: Economic Population: cities. in these concentrated are region Helsinki of the population of the majority the and activities, administration Jobs, area. metropolitan Helsinki inthe located are agencies positively to the economy in the Helsinki region. As a result, aresult, As region. Helsinki inthe economy the to positively contributed also sector construction The restaurants). and (hotels sector hospitality inthe and services, consumer and financial in professional, recorded was development 2016, In positive onaverage. country whole inthe than region Helsinki in the positively more developed have jobs of number the and of production amount the years, recent In of jobs. structure and profile knowledge the impacts also of Finland centre administrative the as position region’s The country. whole in the than region Helsinki in the role have astronger businesses logistics and trade wholesale industries, high-tech well as as development and research services, financial and professional Specialist cities. main other of the those from significantly differ region Helsinki of the areas specialist The Most major company headquarters as well as government government well as as headquarters company major Most 21.5% 11.7%

WHOLE FINLAND

4.5% lo I H Vantaa: Espoo: H a nformation industries, professional professional industries, nformation nd financial services, wholesale trade, trade, wholesale services, financial nd gistics, public sector services sector public gistics, 28.5% elsinki region: 1,454,000 region: elsinki elsinki:

Source: HelsinkiChamber ofCommerce

2 2 6 33.7% 19,000 74,000 35,000

so called Rail Joker, a fast tram connection from Keilaniemi Keilaniemi from connection tram Joker, afast Rail called so of the construction The started. been already has Kivenlahti to extension western further of the 2017. construction The of summer in the started be to is expected traffic where in Espoo, Matinkylä to extended is now line being Metro in 2015. Western completed The was centre, city the with areas residential significant several and airport Helsinki the connects which Road, Rail Ring The area. metropolitan Helsinki in the construction and growth the support network transportation public in the investments major Current growth. population natural onpositive extent, alesser to although also, and migration internal and immigration both on is based growth population The in Helsinki. live would of whom 700,000 some 1.7 to inhabitants, million grow to is expected region in the population the 2030, By Europe. in areas city growing fastest of the is one area metropolitan Helsinki The region. of the expectations growth on the is based region Helsinki of the development positive The country. in the elsewhere than in Helsinki higher significantly are development property of commercial volumes the Also region. Helsinki in the in 2016 concentrated was construction residential RT, 45% some of Industries ofConstruction Finnish Confederation the to According 6%,and respectively. in2016, 10by significantly grew region Helsinki in the sector construction in the of jobs number the Turnover and earlier. years five 2% than lower at about alevel still was production total in 2011, than 2% some higher country, whole in the whereas in 2016 was region Helsinki in the production total the Helsinki region is expected to grow to 1.7grow million by 2030” ”The population”The of the and by property sector,and by property EUR billion stock, estimatedCommercial values property by region Warehouse/logistics, area Helsinkimetropolitan Other industrial, Helsinki metropolitan area Other industrial,Helsinkimetropolitan * Turku, Tampere, Oulu,Lahti,Jyväskylä andKuopio Retail&hotels, Helsinki metropolitan area Retail&hotels, Helsinkimetropolitan Warehouse/logistics, othermajorcities* Warehouse/logistics, ofFinland rest Other industrial,othermajorcities* Office, Helsinki metropolitan area Helsinkimetropolitan Office, Retail&hotels, othermajorcities* Other industrial, rest ofFinland Other industrial,rest Retail&hotels, rest ofFinland Retail&hotels, rest Office, othermajorcities* Office, Office, rest ofFinland rest Office, 0 5 (Jumbo) and Matinkylä (Iso Omena), as well as in the Helsinki Omena), Helsinki (Iso inwell the as as Matinkylä and (Jumbo) (Sello), (Itis), Aviapolis Leppävaara in Itäkeskus located are centres shopping Main in Vantaa. Tikkurila and in Espoo of Tapiola centres regional include areas important other Leppävaara, and CBD the to inaddition markets, retail the In in Vantaa. area airport the and inEspoo Leppävaara and Keilaniemi Helsinki, in areas Pasila−Vallila−Kalasatama the and Ruoholahti include locations office prime other CBD, the Outside location. market retail and office prime the as both position undisputable an (CBD) has district business central Helsinki the markets, property area metropolitan Within Helsinki the made. be to is still rail Pisara of the construction the about decision final city. The inner in the transportation public ease would which Hakaniemi, Töölö, Station, and Pasila Central between planned is being connection rail Pisara called so the 2019.early Furthermore, in started be to is planned of Helsinki, parts northern the through go would which in Helsinki, Itäkeskus to in Espoo Of this, about 2 million sqm is located in Helsinki. in Helsinki. is located sqm 2million about this, Of 3.9 sqm. million about to amounts area metropolitan of the stock space Retail of offices. 0.9 sqm million Vantaa about and 1.8 sqm million about accommodates Espoo in Helsinki. 5.9 is located some sqm million area, metropolitan Helsinki in the of offices stock total sqm million 8.6 around Of of Tripla). (Mall Pasila and (REDI) in Kalasatama developed being currently are centres shopping major New Kluuvi). and Citycenter Esplanad, Galleria Forum, (Kamppi, CBD 10 the property marketsthe in property the Helsinki metropolitan area” metropolitan Helsinki connections boosting are ”New public traffic public”New traffic 15 20 Source: KTI 25 65 5 Property markets in different regions – outlook for 2017 66 5 Property markets in different regions – outlook for 2017 in Helsinki in 2050. Areas with increasing commercial commercial increasing with Areas in 2050. in Helsinki jobs 560,000 be will there that predicts plan master The process. plan master new in the debates serious most the caused plans These use. residential into park central of the parts and area airport Malmi the instance for areas, of new zoning the well as as workplaces, and housing of neighborhoods mixed new with boulevards city urban into routes traffic incoming of current transformation the includes plan the construction, residential enable to In order possibilities. cycling and in pedestrian improvements well as as hubs rail important most the emphasises plan the connections, traffic of city. terms In inner in the density building increased the of onavision is plan based master new The people. 860,000 at least to grow will in Helsinki population the 2050, by that, onaprediction is plan based in late2016.plan The master city new the approved of Helsinki council city The Helsinki 5.1.1 area Helsinki metropolitan the in areas office Main Source: StatisticsFinland Espoo centre Lauttasaari Olari &Matinkylä Myyrmäki &Martinlaakso Töölö Kallio Tikkurila area Vallila Sörnäinen &Kalasatama Pitäjänmäki Kilo &Mankkaa Leppävaara Otaniemi &Keilaniemi Aviapolis Tapiola &Niittykumpu Ruoholahti Pasila Helsinki citycentre Area © OpenStreetMap contributors @ Helsinki City Survey Division, the municipalities of Helsinki Region and HSY, 2014. Licence; Helsinki City Survey Division’s open open Division’s Survey City 2016. 2/ KTI. by Helsinki map the to Licence; HSY, 2014. and Additions 1.0. Region licence Helsinki of data municipalities the Division, Survey City @Helsinki contributors © OpenStreetMap - QGIS Development Team, 2015, QGIS Geographic Information Open System. Source Foundation Geospatial Project. 2.12.2 QGIS using created Map increasing building density in in density building increasing ”The new master plan city ”The is based on avision of the inner city” 28 32 32 19 30 22 46 22 31 37 54 57 40 68 72 28 57 256 buildings No. of 97,896 132,474 146,238 176,030 176,685 220,883 236,024 252,488 289,441 298,820 336,427 340,904 345,235 372,781 386,100 412,861 636,843 1,780,377 area (sqm) Gross floor construction of which is set to be completed in 2018. completed be to is set of which construction the library, central new the accommodate also will area The sqm. 40,000 some by supply office the increased and area CBD the extended station railway main of the vicinity in the Töölönlahti of the development area recent The region. in the location office preferred most the remains and conditions, market in challenging resilience its proven has CBD Helsinki the years, Inrecent of occupiers. needs well the to responds and refurbished, and well maintained it is mostly but 1900s, early and late1800s in the built was CBD in the stock office of the majority The offices. ministries’ and headquarters company some with –together etc firms, service financial firms, law consultancies, –business services business-to-business offering companies mostly are centre city in the users Office buildings. cultural several and functions administrative sector public important most the accommodates also area small geographically This markets. property retail and office in the both in Finland, submarket property single important most is the CBD Helsinki The HelsinkiThe CentralBusiness District Herttoniemi. and Pitäjänmäki areas industrial and office traditional the well as as axis, Vallila−Kalasatama Pasila− extending the instance for include, supply property

ht tp://qgis.osgeo.org Helsinki CBD CBD Helsinki summer of 2016. summer in the fund CapMan’s from project George St. the bought of 2017. summer inthe Immobilien inKamppi Deka George St. and spring, in the completed be to is scheduled Kluuvi in Haven of Hotel extension The underway. projects other 2017, in early and two completed, are was there project hotel In 2016, F6 the years. in recent use residential or hotel either to converted been have CBD in the buildings office Several year. of the end the towards improve to started rate vacancy the Catella, to inlate2016. 86% at some However, according stood offices CBD of the rate occupancy the database, rental KTI Inthe CBD. in the space of vacant amount the increased recently has conditions economic tight and space office efficient of modern, supply of increased combination The Esplanades. Southern and Northern the instance, by, in buildings for needs, occupier the to respond to order in planned being or underway projects redevelopment major in late 2017. several also completed be are There to expected CBD, inthe Kasarmitori by construction under project office is anew there years, many After Additions to the map by KTI. 2/2016. KTI. by map the to Additions © OpenStreetMap contributors - QGIS Development Team, 2015, QGIS Geographic Information Open System. Source Foundation Geospatial Project. 2.12.2 QGIS using created Map metropolitan area. Helsinki in the areas other for than positive more remained CBD in the rents office for outlook the Barometer, Property RAKLI-KTI Inthe month. per €31 sqm per exceeded agreements innew of rents quartile upper the database, 1.1%. some by rental in2016, KTI the In increased and again growth towards aturn in 2015, took a slight drop rents the After years. of 1-2% in recent annum increase per a stable shown has offices CBD Helsinki the for index rental KTI’s ”Rental growth continues growth ”Rental in the Helsinki offices” CBD ”Prime office yields office ”Prime in the Helsinki CBD continued continued CBD Helsinki decreasing in 2016” in decreasing

http://qgis.osgeo.org 67 5 Property markets in different regions – outlook for 2017 68 5 Property markets in different regions – outlook for 2017 currently stands at some €120−130 at some for month per sqm stands per currently rents of retail quartile upper the database, rental KTI the In premises. best the for tenants find to easy however, very It is still, years. slightly in recent increased it has although low CBD, in the remains space retail of vacant amount The locations. shopping important pedestrian areas have been developed around the most extensive years, In recent streets. two these between located is store department Stockmann traditional The streets. two these connecting streets the and Esplanade Northern the and Aleksanterinkatu include streets shopping main The in February. Sponda by of Forum acquisition in 2016 major news the the was Insegment, this station. railway main the to next Citycenter and area, Kluuvi in the Kluuvi and Esplanad Galleria area, Kamppi in the Forum and Kamppi include CBD in the centres shopping Main 3.9%. to amounted which growth, capital by supported was and areas, in other offices for than stronger be to continued performance in 2016. 8.2% was The offices CBD Helsinki on return total the Index, KTI Inthe yields. decreasing and growth rental positive both by supported been years, have, in recent offices CBD of Helsinki values market The Advisers. Estate Real Barings with in co-operation deal the made which fund, German unnamed an by property sqm of a5,400 acquisition the was transaction largest 2016. The in CBD Helsinki in the out carried transactions property office notmany supply, were limited the to there due Mainly this. lowerthan clearly are properties best Yields very the for 2015. since percentages of 0.5 late 2016, a decrease showing in at 4.7% stood CBD Helsinki the for yields office prime survey, Barometer Property RAKLI-KTI the to According small premises. In the RAKLI-KTI Property Barometer, Barometer, Property RAKLI-KTI the In premises. small offices RentalKTI index, Helsinki CBD 100 120 140 160 180 200 80

09-1995 Rental index(HelsinkiCBD1993=100) 09-1996 09-1997 show investment strong 09-1998 Helsinki offices CBD 09-1999 09-2000

performance 09-2001 09-2002 09-2003 09-2004 09-2005 09-2006 Source: KTIandStatisticsFinland 09-2007 09-2008 09-2009 09-2010 09-2011 09-2012 09-2013 09-2014 09-2015 09-2016 CBD, Ruoholahti, Leppävaara and Pitäjänmäki rents,Median all office agreements –Helsinki per sqm. per at €100 stood rent in late2016, average the and negative slightlymore turned rents retail CBD’s the for outlook the Ruoholahti Campus in Salmisaari. The most significant significant most The inSalmisaari. Campus Ruoholahti of its phase third the developing Technopolis is currently Group. Kesko by operated and rented and bySponda owned centre, shopping Ruoholahti in the is concentrated in Ruoholahti space Retail funds. international some well as as companies property and institutions domestic include area in the Investors slightly, Catella. to according increased again rate of 2016, half however, latter the vacancy the During area. in the space of vacant amount the decreased have lettings major and tenants, new attracted has area the years, Within past the onaverage. month per sqm per €23−24 at some stand currently in Ruoholahti rents Office companies. insurance and banks consultancies, business companies, industrial and high-tech as such of businesses, avariety accommodate area Salmisaari adjacent the and Ruoholahti route. radial of western a major point starting at the CBD the near area office is amodern Ruoholahti Salmisaari – Ruoholahti in late2016. opened was Kortteli floor restaurant extensive an instance, for Kamppi, In centres. in shopping space more up taken have services consumer other and cafes is restaurants, that trend Another recently. premises of large users some attracted also have CBD in the centres shopping hand, other the On locations. expensive most in the stores by opening market Finnish the entered have brands luxury international some hand, one the On of years. couple past the during markedly changed has CBD Helsinki in the premises of retail base tenant The €/sqm/month 10 15 20 25 30 5

1996 premises in the Helsinki CBD 1997

”The tenant base of”The retail 1998 1999 2000 Leppävaara 2001 is changing” is 2002 2003 2004 Helsinki 2005 2006 2007

2008 Pitäjänmäki 2009 2010 2011 2012 Ruoholahti

Source: KTI 2013 2014 2015 2016 growth strategy. growth of Helsinki City in the of growth” “axis an as is named area Pasila−Vallila−Kalasatama The Vuosaari. to operations its moved harbour the when development for released was land where area, Kalasatama developing is the there Sörnäinen, supply. to Adjacent office amultifaceted by characterised are areas Vallila. and These Sörnäinen Pasila, include centre city of the out somewhat situated areas office traditional Other Pasila –Vallila –Kalasatama buildings. industrial and warehouse old nine demolish to apermit with in late2016, together granted were area in the buildings residential for permits building first The Jätkäsaari. to next area, land Telakkaranta of the development the planning is currently Skanska 2030. by 17,000some inhabitants accommodate to is planned area The in Jätkäsaari. active be to continues development residential City. the by Rental developed be will that building school aprimary to is next bunker The use. residential for also and centre a sports into developed be will which building, oldbunker, the warehouse Jätkäsaari called so of the reconstruction the start to about in late2017. started be to SRV is also postponed been has Construction building. hotel one and buildings residential two office, of one consisting area, in the block Wood City in late2016. SRV the is planning in Jätkäsaari opened was centre congress and hotel Clarion 16-storey new The area. in the completed be to about is just terminal passenger a new and inJätkäsaari, located is still Tallinnto Petersburg St and ferries passenger serving West Harbour The Vuosaari. to operations its moved harbour the after development for freed was which area, Jätkäsaari growing is the Ruoholahti to Next Company.Insurance Life Fennia from building office sqm of a9,000 acquisition PATRIZIA’s in2016 German the was area inthe transaction Photo: City of Helsinki / Suomen Ilmakuva Oy In the competition, a plan to develop the Central Pasila Tower Pasila Central the develop to aplan competition, In the of Helsinki. City and State of the project ajoint as underway is currently High-Rise” “Helsinki title the under competition construction and design Tripla, to international an Next hub. transportation apublic and facilities parking well as as space, office and hotel residential, of retail, sqm 183,000 comprise will complex the in 2022, completed in 2017. started be will When centre shopping sqm a 85,000 of construction the and works, construction land with YIT by started been has of Tripla Mall project three-block the station, railway current of the surroundings in the area, Pasila Central Inthe redevelopment. major under is currently Pasila respectively. 8,600 and of 25,000 figures current to compared residents, 20,000 and jobs 50,000 some accommodate will area the plans, long-term city’s the In significantly. increase to planned are in Pasila stock property residential and commercial Both media companies. and service business and companies insurance agencies, city and government including users, of office mixture acolourful accommodates currently Pasila station. of the south area machinery old the railroad and areas Pasila Upper and Northern the Ilmala, developing the Pasila, Western and of Eastern submarkets traditional the including areas of several consists Pasila centre. city of the north area market property multifaceted and hub railway important is an Pasila accommodate both residential and office properties. properties. office and residential both accommodate will areas These station. railway of the north areas Pasila Northern and Ilmala the develop to plans major also are There Tower of the part Area. western in the planned Area, Start-Up sqm a40-50,000 for executor an at finding aims also competition The buildings. 15-floor in at least space commercial and office of residential, sqm 150,000−200,000 include will area The chosen. be will Area 69 5 Property markets in different regions – outlook for 2017 70 5 Property markets in different regions – outlook for 2017 accommodate some 20,000 people and 8,000 jobs. 8,000 and people 20,000 some accommodate to is planned area the 2030, inabout completed When development. property new extensive and infrastructure in investments significant requires development where and combined, be will services private and public and working living, where area is another Kalasatama area. Kalasatama developing is the Sörnäinen to Adjacent month. per sqm per €20 above clearly are they stock, below €15, modern in the whereas are rents buildings, older the In in Vallila Sörnäinen. and stock office modern and older between markedly vary Rents for space. need decreased agencies’ state the to due postponed be will project the that announced just they site, onthe but building office of anew construction the start to planned Senate property. office amajor demolishing is currently Properties Senate State’s the in Sörnäinen, Also project. of this vicinity in the property office in an invested In 2016, Antilooppi project. office K6 sqm 12,000 the developing is currently CDF Skanska In Sörnäinen, buildings. office refurbished many accommodates currently which area, harbour and industrial a traditional Vallila to is Sörnäinen, Next Vallila. in Sturenkatu, property office of an acquisition fund’s eQ’s was transaction In 2016, recorded only the space. office of lettable sqm 8,700 some comprising project, Fredriksberg of their phase first the developing currently is NCC area in this Also premises. of the part rent to going is Tax The Administration project. reconstruction sqm a17,000 with area in the premises its develop to continues Group OP companies. telecommunications and of banks offices head example, for accommodating, currently Pasila, to next area light industrial and office Vallila is atraditional in 2016. sqm per €18−20 at some stood agreements in new rents average the database, rental KTI’s In area. in the stock modern and older between significantly levels vary in 2016.in Pasila Rental decrease to continued space office of vacant amount The Pohjolan Liikenne. company bus for building office and depot bus new is the inPasila project construction ongoing Another Hansainvest. to sold been has project The headquarters. move their also will they where project, Asema Ilmalan of their phase first the build to started 2016, early In Hartela projects. Centre Virium Forum and Ilmalanrinne in their area in the developer is amajor Pension Fund, YLE the with together Sponda, Pasila−Vallila−Kalasatama axis” Pasila−Vallila−Kalasatama ”The 60,000 sqm shopping 60,000 ”The ”Active construction in the the in construction ”Active centre REDI is set to be REDI centre completed in 2018” its new department of urban environment in Kalasatama, inKalasatama, environment of urban department new its for building office new amajor is planning of Helsinki City The inKalasatama. property office an developing currently is Invest Lindström Also use. itresidential into redevelop to plans and office head former Kesko’s bought Varma time, same At the users. other to rented be will space of office sqm 7,000 2019. some in early addition, In completed be to set in Kalasatama, Kesko for office head 27,000 sqm a new develop will Varma that 2016, announced Varma and Kesko In 2017. project. in the investor is the Immobilien Deka in late completed be to is scheduled in Kalasatama centre well-being and health sqm 20,000 of Helsinki’s City The funds. life and insurance LocalTapiola’s and funds Group’s OP Ilmarinen, fund pension include SRV, to project inthe addition investors tower. In office one and hotel one towers, residential six centre, shopping sqm a60,000 comprise will which centre, REDI the constructing SRV is currently In Kalasatama, dwellings. occupied owner- and rental both comprises stock Residential projects. residential with started in Kalasatama work Construction and professional service companies. service professional and IT example, for among, attractiveness their retained have station railway the to closer buildings modern the whereas low rents, relatively through tenants attract to forced been have investors in particular, buildings older In Pitäjänmäki. in buildings and areas different the between markedly vary levels supply, space rental heterogeneous of the Because of use. changes for opportunities for looking are investors low to demand, in late2016. Due 60% some only at stood rate year, occupancy and past the within markedly increase to continued space office of vacant amount the database, rental KTI’s In years. several for Pitäjänmäki in high remained has space office of vacant amount The corporations. and investors foreign funds, and companies property institutions, comprises and is varied area in the base investor The 1990–2000s. inthe use office mainly into converted was that area old isindustrial an centre, city Helsinki of the north kilometres seven situated Pitäjänmäki, Pitäjänmäki located. are headquarters of company couple a where stock office modern a relatively accommodate station railway Käpylä of the surroundings The Käpylä. area residential traditional is the Pasila of eastern North in 2016. completed was phase second Park’s Business Aitio NCC’s project. Rasti Manskun of Skanska’s phases two first the accommodates currently area supply. space The modern mostly with area office Ruskeasuo developing is the Pasila to Next Ruskeasuo in 2017. start to is expected construction The investors. private to project the of selling aim the with ”Several office projects office are ”Several underway in Kalasatama”underway and Vantaaand rents in Helsinki,Prime office Espoo be connected with the existing Megahertsi centre. The The centre. Megahertsi existing the with connected be will which station, metro the by centre Hertsi sqm 20,000 of the construction the start to about are Hartela and YIT area. in the small is rather of offices stock total the although years, several for high remained has rate vacancy office The stock. residential extensive is also supply. There retail and office with area diversified amore into transformed gradually has that area old iswarehousing an Herttoniemi line. metro the and route radial eastern the both to adjacent CBD, of the east kilometres five area is an Herttoniemi –ItäkeskusHerttoniemi −Vuosaari development. residential to is limited 2017. construction new this, Beyond in late completed be to set area, in the centre data sqm a30,000 constructing is currently Sonera space. of lettable sqm 10,000 some comprising area, in the Garden Business Ultimes of the phase first the 2016,In completed Peab Invest 10 15 20 25 30 35 €/sqm/month 5 Photo: City of Helsinki 1995 1996 1997 1998 1999 2000 2001 Helsinki 2002 2003 2004

Source: RAKLI-KTIProperty Barometer 2005 Espoo 2006 2007 2008 2009 Vantaa 2010 2011 2012 2013 2014 2015 2016 (autumn 2017) Espoo and Vantaa and Espoo occupancy rates in Helsinki,Office an attractive area for retail and living. The Itis shopping shopping Itis The living. and retail for area attractive an as development its line, supports metro eastern the by as well as route, radial eastern the Iand Road of Ring junction at the location area’s The area. Itäkeskus is the east Further centre. the above built be also will buildings residential Three retailers. other 40 some and hypermarket aPrisma accommodate will centre logistics property stock. Logicor is one of the main owners owners main of isthe one Logicor stock. property logistics extensive an well as as jobs 2,000 about accommodates currently harbour The years. in recent rapidly developing been has that area is another area, harbour new the Vuosaari, demolished. be will property old hypermarket in 2017. the phase, opened be first of the completion Upon will Citymarket anew where Easton, centre shopping the of phase sqm 20,000 first, the building is currently Kesko metres. of 115,000 square area leasable agross with Europe in northern centres shopping largest of isthe one centre 100 70 75 80 85 90 95 %

03/2004 09/2004 03/2005 Helsinki 09/2005 03/2006 09/2006

03/2007 Espoo 09/2007 03/2008 09/2008 03/2009 Vantaa 09/2009 03/2010 09/2010 03/2011 09/2011 Source: KTIRentaldatabase 03/2012 09/2012 03/2013 09/2013 03/2014 09/2014 03/2015 09/2015 03/2016 09/2016 71 5 Property markets in different regions – outlook for 2017 72 5 Property markets in different regions – outlook for 2017 Office development projects in Helsinki metropolitan area Helsinki in metropolitan projects development Office size of circle = size of project, light circle = project under planning under =project circle light project, of =size circle of size rapidly developing residential areas. areas. residential developing rapidly also are areas Rastila adjacent the and Vuosaari Columbus. centre shopping sqm 21,000 is the station metro Vuosaari the to Next in Vuosaari. building aterminal developing is currently MetsäFibre area. inthe space logistics of the area Helsinki metropolitan the in industrial Occupancy rates retail of offices, and 100 administrator of this data is Helsingin kaupungin kiinteistövirasto. The data has been downloaded fromOpenStreetMap the license the fromOpenStreetMap using 16.11.2016 downloaded been has data The The stations. and kiinteistövirasto. lines Line Rail kaupungin Light Helsingin @Jokeri is data kanssa. this of administrator organisaatioiden mittaustoimen kuntien kaupungin muiden alueen ja Helsingin is HSY:n creator yhdessä original the and kaupunkimittausosasto kiinteistövirasto kaupungin Helsingin is data this of administrator The http://qgis.osgeo.org. Map Region Project. @Helsinki Foundation @ contributors Geospatial Source Open Information. 2017, Team, Geographic QGIS Development QGIS 2.18.3; QGIS using created Map 70 75 80 85 90 95 %

2003

2004 Office 2005

2006 Retail 2007

Creative Commons Nimeä 4.0 Kansainvälinen (CC BY 4.0). Additions to the map by KTI 2/2017. KTI by map the to Additions 4.0). BY (CC Kansainvälinen 4.0 Nimeä Commons Creative 2008 Industrial 2009 2010 2011 Source: KTIRentaldatabase 2012 2013 2014 2015 2016 earliest. at the in 2020 completed be to is expected Kivenlahti to of 2017, summer the until extension the and postponed been has Matinkylä to line metro new of the opening The Espoo. in stations new of the vicinity in the markets property the is boosting line metro western new of the construction The Leppävaara. in project ongoing only was there year of the end at the and in Espoo, completed were projects in 2016, office no and development, new slowed down has supply Abundant in late2016. rented were investors large by owned premises office of Espoo’s 77% some only database, rental KTI the In Leppävaara). (Keilaniemi, locations in good areas modern relatively and (Kilo−Mankkaa) stock older with submarkets remote both include vacancies high from suffering Areas years. few past the for in Espoo areas many for aproblem been have rates vacancy office High properties. and areas in different rates vacancy levels and of rental development diverse the in seen be also can which is multifaceted, stock property commercial city’s The centres. regional five within scattered stock city, property has biggest second Finland’s Espoo, 5.1.2 Espoo

Helsinki Region Infoshare Region Helsinki

service service project includes major investments in both transportation transportation in both investments major includes project The redevelopment. major undergoing is currently which area, residential and office retail, Tapiola is atraditional Technopolis’s campus. Innopoli including companies, at high-tech targeted parks business well as as institutes research several accommodates also area Otaniemi The space. of retail sqm 6,000 some 2018, include will and in completed be to is scheduled €100 project million The construction. under is currently building campus and centre metro University Aalto The premises. of new development and buildings of existing redevelopment both includes centralisation The area. in the campus main its centralising it is currently and in Otaniemi, is located University Aalto Keilaniemi. to next is located area Otaniemi The Tapiola. and Otaniemi between tunnels the extend will is completed, phase first the once started be will which phase, second 2018. until The area in the traffic impact will project The development. residential for opportunities the improve and area of the attractiveness the Tapiola, and increase both to Keilaniemi in order between I Road Ring the covering is currently of Espoo City The Niam. by Center Science Life sqm 32,000 of the acquisition in 2016 the in Keilaniemi was transaction largest The improve. conditions market rental the before started be to expected not are these but station, metro the to close buildings residential and office high-rise some including area, in the planned being projects development office major several are There space efficiency. increased by driven been have of which many in Keilaniemi, lettings major some been has 2016. There during improved situation the but years, in recent buildings office modern in vacancies high relatively from suffered has Keilaniemi month. per sqm per €22 some are rents average database, rental KTI Inthe in Ruoholahti. than lower slightly are levels rental Average concepts. park business modern some well as as Fortum, and Oil Kone,Tieto, Neste Mobile, Microsoft including properties office head major several accommodating area office is a modern Keilaniemi areas. station new in the is active construction residential and Retail premises. of office oversupply from suffered years, have, in recent areas of these Many stations. metro new accommodate all −will Matinkylä and Niittykumpu Tapiola, Otaniemi, −Keilaniemi, Espoo in southern submarkets property commercial established five The Matinkylä TapiolaKeilaniemi – Otaniemi – – ”A new line metro in will start ”The shopping centre Ainoa Ainoa centre shopping ”The is developing in Tapiola” in developing is the of summer 2017” currently owns the whole centre. Also in Matinkylä, inMatinkylä, Also centre. whole the owns currently Citycon space. of lettable sqm 100,000 almost comprise will of 2017. half centre shopping the this, first the After in completion for is scheduled phase 2016, second the and in opened was of redevelopment phase first The station. metro Matinkylä the accommodate will and extension, and redevelopment amajor is undergoing centre shopping Omena Iso buildings. office modern some accommodates also which in Espoo, centres retail significant most of the one is project, line metro current of the stop final the Matinkylä, project. in the investor is the in 2017. completed be to Yieldscheduled OP-Rental fund and underway is currently building retail sqm of a7,000 construction the station, Niittykumpu the In facilities. sports several accommodating Tapiola the park, to sports next is located station Urheilupuisto The Niittykumpu. and Tapiola Urheilupuisto after are stations two next The Tapiola in the active area. remains also development Residential redeveloped. been has which of part a large stock, office a diversified accommodates also Tapiola The area started. be to is planned centre shopping of the phase third the and demolished, be will building store department Stockmann former the this, after and premises, 2017.new these move to March will Stockmann in completed be to is scheduled space, of retail sqm 20,000 some comprising centre, shopping Ainoa of the phase second The stock. property new and existing and infrastructure complexes, further projects are being planned. being are projects further complexes, of these some In Park. Business Derby SRV’s and Quartetto Hartela’s Polaris, jointproject Lemminkäinen’s and NCC’s Alberga, NCC’s including buildings several with complexes park by business is characterised area Leppävaara The supply. residential modern some and mall shopping a traditional centre, shopping Sello the stock, office expanding a diversified, comprising area, Leppävaara is the railroad western the by and I,Turku motorway Road Ring along of Otaniemi, North Leppävaara in 2020. completed be to is scheduled apartments, residential some also and space of retail sqm 41,000 some comprise will which 2017. centre, in summer Lippulaiva new The opened be to planned and built, being is currently centre Pikkulaiva Atemporary demolished. be will building centre shopping current the where project, amajor start to about is Citycon is located. Lippulaiva centre shopping the where area, aresidential is mainly Espoonlahti area. Espoonlahti line, is the metro extended the along also west, Further centres. shopping Liila and Merituuli the well as as properties retail bigbox mainly accommodates currently area The of Suomenoja. area manufacturing light and retail traditional is the West of Matinkylä underway. is development residential extensive some 100,000 sqm of lettablesome 100,000 ”Iso Omena”Iso will comprise space” 73 5 Property markets in different regions – outlook for 2017 74 5 Property markets in different regions – outlook for 2017 its daughter company LAK Real Estate, all major property property major all Estate, Real LAK company daughter its and of Vantaa, Finavia City the include area in the players main The years. few past the during rapidly developed has Helsinki-Vantaa the Airport around Aviapolis area The Aviapolis properties. service and retail several and projects residential abundant including areas, station the around development property boosted has Line Rail Ring of the development The centre. Tikkurila traditional inwell the as as surroundings, its and airport the around concentrated are areas market property commercial important Vantaa,In most the 5.1.3 Vantaa planning process. in the issues procedure technical some to due postponed been have projects the but area, in the centre shopping a large for plans also are There units. retail large other and stores electronics car, furniture, mainly comprises space retail III, Road Ring and Turku of the motorway junction at the centre Espoo to next situated area, Lommila the In centre. in Espoo located are Entresse and Espoontori centres shopping The route. railway western the alongside and Turku the motorway to close of Leppävaara, west situated is buildings, retail various well as as city of the buildings administrational the accommodating area an centre, Espoo Espoo centre active. is also construction residential areas, surrounding its and InLeppävaara Sello. centre shopping sqm 100,000 the accommodates also Leppävaara recently. increased has area in the space office of vacant amount The functions. office head its concentrated has Nokia where in Kilo, area Karamalmi is the West sqm. of Leppävaara per €20 at some stand Leppävaara in offices for rents Prime Catella. to according 20%, some at high, remains in Leppävaara rate vacancy office The Finland. Ramboll firm consultancy technical the accommodate will building the completed, when in 2018; 2017 completion for in early is set and started be will work construction The in Leppävaara. project building office new of Hartela’s acquisition the 2016, announced Keva late In foundations. domestic smallish by sold were both and respectively, space, of 7,200 lettable and sqm 4,900 some comprise buildings The building. Fuuga Quartetto purchased Antilooppi and Basso, Quartetto acquired Fennica fund investment special in Quartetto: out carried were transactions in late2017. completion for due Park, 2016, In Business two Alberga in the phase another developing is currently NCC ”Office development”Office continues ”Offices in Leppävaara attract in Leppävaaraattract ”Offices to active be in Leppävaara” investors” development of two logistics projects in the area. in the projects logistics of two development the started recently has YIT project. Logistics HUB the in investor is the Etera property. logistics and office sqm a 20,000 completed just has Logistics HUB and terminal of 2017:half cargo sqm anew, is developing Finnair 35,000 first inthe completed be to scheduled are Two projects larger Park. Business Logistics K3 in the another and Finavia for one Aviapolis area: in the completed were projects logistics In2016, new two years. in recent area in the active been has development supply. space Logistics modern rather with hub logistics supply. important an Aviapolis is also retail abundant and properties logistics premises, office modern includes Aviapolis area in the stock property Commercial connections. railway main and centre city the with area the linking Aviapolis, thus in well as as airport at the stations has Line Rail Ring The is estimated. jobs 15,000 additional of some growth further and jobs, 35,000 about accommodates area The growth. significant for plans further and area in the inhabitants 18,000 some currently are There companies. property several and developers largest hotel in Finland comprising 540 rooms. 540 comprising in Finland hotel largest the become will which centre, in the hotel of the extension the start to about is Varma just owner centre’s The premises. leisure and of hotel, office comprised centre leisure Flamingo is the of Jumbo neighbourhood immediate the In area. in the centre retail major is the centre shopping Jumbo sqm 85,000 The Estate. Real LAK by use hotel into reconstructed be will terminal, the from metres 100 some just building, old office An started. was Hotel Airport Helsinki Scandic 148-room of the 2017, in late 2016. Inearly opened was hotel construction the Clarion 258-room new the area, AviapolisStation new the In area. Aviapolis in the transactions in portfolio included properties several were there addition, In area. in the properties logistics two acquired fund Aberdeen’s and park, business Gate8 in the Piano property office the acquired fund NREP’s 2016, In investors. attract to continues area airport The projects. additional any postponing thus are developers and area, in the high relatively remains rate vacancy office The parks. business existing inthe planned being are phases new several but underway, projects office no currently are There Station. Aviapolis the to next property Aviabulevardi sqm 9,000 of the construction the completed CDF 2016, In III. Skanska Road Ring by complexes park business several and Vantaa Campus Technopolis the Helsinki- area, airport in the WTC the including area, in the is abundant supply space office Modern ”The hotel”The supply is increasing continues to active be in the ”Property development development ”Property vicinity of the airport” in the Aviapolis area” is underway. development residential rental abundant Kivistö, in Also of 2017. quarter second inthe started be to is estimated project of the phase sqm 35,000 first of the construction The NCC. and Skanska between is ajointproject this station; Kivistö new the to close centre shopping sqm 110,000 is a area in the planned project individual biggest The area. in the accommodated be to planned being are jobs many as nearly and inhabitants new 30,000 Some Line. Rail Ring the alongside motorway Hämeenlinna the and III Road Ring to close is inKivistö, area development Vantaa’s biggest Kivistö area. in the active is also development Residential premises. hotel and retail office, comprising property use multi- sqm 10,000 almost an is developing vicinity, Sponda 2017. inearly completion for is due the In investors, are Etera and fund NREP’s where Dixi, centre office and retail of the phase second The area. inthe investments new out carrying or planning are investors property several and infrastructure, its of Vantaa is developing City The redevelopment. major under is currently area the and Line, Rail Ring the by markedly enhanced were centre Helsinki and trains long-distance airport, the between connections for ahub as position Tikkurila’s buildings. administration city’s of the most accommodates also Tikkurila Vantaa. in area retail and office important most –the area airport the –alongside and centre urban main is the Tikkurila Tikkurila gardening. and furniture vehicles, motor for outlets as such units big-box retail and park retail by favoured areas retail important also are Tammisto areas and Pakkala the Aviapolis area, of the part southern the In in Koivuhaka. property in a retail invested 2016, Yield OP-Rental fund in2016. late In Renting Nordisk RBS to sold it was and renovation, major under is currently building The is located. of Vantaa Energy office head the also area, Inthe Koivuhaka. in properties logistics developing are Oy Lindström and in2016. Logicor area inthe unit retail anew completed Veho retailer car The units. retail large accommodates of mainly Aviapolis, east just area, Koivuhaka The Total returns in Finnish cities 2016, all property Rest ofFinland2.1% Whole Finland6.2% Jyväskylä 1.8% Tampere 4.6% Helsinki 8.0% Kuopio 6.1% Vantaa 6.8% Espoo 6.7% Turku 5.6% Lahti 7.2% Oulu 4.8% 5- 3- 1012345678 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 Income return, % %■Incomereturn, ■ Capitalgrowth, Finnish cities Finnish rents in major Prime office cities yieldsPrime in major office Finnish 10 €/sqm/month 10 15 20 25 30 35 % 4 5 6 7 8 9 5

1995 1995 Turku Oulu Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki Turku Oulu Jyväskylä Turku Oulu Vantaa Tampere Espoo Helsinki 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003

Source: KTIIndex 2004 2004 2005 2005 Source: RAKLI-KTIPropertyBarometer Source: RAKLI-KTIPropertyBarometer 2006 2006 2007 2007 2008 2008 % 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 (autumn (autumn 2017) 2017) 75 5 Property markets in different regions – outlook for 2017 76 5 Property markets in different regions – outlook for 2017 central locations.central in construction housing new enables which intensified, be will use land decisions, these to Due areas. pedestrian and light transportation mainly into turned be will itself centre the and planned, being are facilities parking underground new in 2021. centre, completed be city the In should phase in 2017, started be first will the work and construction The inTampere. tramway anew develop to adecision made council In late 2016, city the 2020s. in the developed be to planned is being hub transportation public a modern station, railway At the centre. city in the traffic the lightens tunnel inlate2016. The opened −was kilometres − 2.3 tunnel longest Finland’s centre, city of the side northern the in Tampere. isOn developing network transportation The onaverage. country whole in the than stronger been has Tampere in the region economy the In2015−16 of area. in the growth environment the business the in developing cooperation active pursuing municipalities of eight consists Tampere region The technology. healthcare and automation and machinery technology, information include Tampere in the region areas expertise Technology companies. service well as as businesses technology high attracted recently has that city Tampere old isindustrial an countries. Nordic in the city inland Tampere largest is the Population: Location: Tampere Oulu, Turku, and Lahti Kuopio Jyväskylä, centres:5.2 growth Other Tampere, stock. office older some accommodates also area The of Myyrmanni. slightly north in Myyrmäki, located is also IsoMyyri, sqm 15,000 the centre, shopping other Citycon’s is located. centre shopping Myyrmanni sqm 40,000 the station, the to next centre, Myyrmäki In active. be to continues construction residential and inhabitants, 15,000 some accommodates currently area The Line. Rail Vantaa Ring the by in western centre is aregional Myyrmäki Myyrmäki

T T i 1 nland city in the Nordic countries Nordic in the city nland 70 km north of Helsinki; the biggest biggest the of Helsinki; north 70 km ampere region in total: 370,000 370,000 in total: region ampere 228,000 ampere: metropolitan area area metropolitan Transaction volume in cities outside the Helsinki MEUR 100 150 200 250 300 350 400 50 0 ■ 2010201120122013201420152016 uk Tmee uu JyväskyläKuopio Oulu Tampere Turku

IV of Technopolis Yliopistonrinne were completed. Also Also completed. were of TechnopolisIV Yliopistonrinne and in Tampere. III unit 2016, In phases production phone the close it that will announcing Microsoft to due mostly is negative, rate vacancy office of the development the for outlook of 2016. rate,end at the The a13.6%to vacancy equivalent space, office of vacant sqm 120,000 some were there Catella, to According users. of large reorganisations major well as as supply new both to due significantly increased recently has space office of vacant amount The €10−15 sqm. between per vary typically rents the stock in older whereas sqm, per €20 around levels are rental buildings, in modern locations office best Inthe Technical the University. alongside Hervanta in well as as hospital University the near in Kauppi centre the to Tulli, close and of in Hatanpää areas areas in the centre, city in the is found space office In Tampere, modern investors. estate real international and domestic both attracted has region The region. Helsinki the outside in Finland area market property active most is the Tampere region The west of the city centre. In Lempäälä, south of Tampere, some south Lempäälä, In centre. city of the west in Tesoma, centre retail in 2018. anew is developing Kesko completion for is due which centre, shopping sqm 52,000 a developing is currently Sponda Koskikeskus, to next area, Ratina the In Hämeenkatu. to next centre shopping Koskikeskus in the and Hämeenkatu, street, main the along in Tampere is situated space retail expensive most The area. factory Finlayson inthe project Varma’s mix-use was project construction office ongoing only the year-end, At the market. into came space office new some project, Pohjola hospital OP’s in the ”A new tramway will built be 530 ”The office vacancy rate vacancy office is ”The increasing in Tampere” in increasing in Tampere” Source: KTI cities, autumn 2016 autumn cities, Prevailing rents in major office Finnish is expected to be completed by 2023. by completed be to is expected complex The facilities. leisure and hotel residential, arena, of multi-use sqm 120,000 some comprising project Arena) and (Deck Areena and Kansi the for developer the as chosen been SRV has station. Tampere of railway the vicinity inthe arena multi-use amajor build to plans are There Tampere. in projects residential the in investors are companies property and funds Domestic infrastructure. transportation developing the by boosted partly ongoing, projects development numerous are There in Finland. regions city growing fastest of the is one which in Tampere, high is also activity development Residential airport. of the vicinity in the underway is project of Tampere. Another south in Lempäälä, and in 2016 completed in Pirkkala were premises logistics New centre. shopping Ideapark of the vicinity in the underway also are projects construction retail new 10 15 20 25 30 /sqm/month

Photo: SATO 0 5 Based on lease agreements inKTIdatabase. Based onleaseagreements Lower quartile Upper quartile

Helsinki Median

Espoo

Vantaa

Tampere

Turku

Oulu

Jyväskylä

Kuopio Source: KTI

Lahti index spring 2000 =100 2000 spring index Turku, and Oulu, Lahti, Jyväskylä Residential indexes rent inTampere, companies. The largest transaction was that of the Finnmedi Finnmedi of that the was transaction largest The companies. and funds property Nordic and domestic included Investors million. €350 some to in 2016, amounted and inTampere significantly increased volume Transaction first due to the rapid growth in the high-tech sector, which which sector, high-tech in the growth rapid the to due first mid-1990s; the since markedly evolved has of Oulu City The Population: Location: Oulu Tampere. in properties residential rental in invested companies investment housing and institutions Trophi. and Finnish Hemsö Hemfosa, investors Swedish the instance, for in Tampere included, in transactions buyers Other funds. two Technopolis eQ’s and between out carried hospital, Tampere university the to close campus 100 110 120 130 140 150 160 170 90

2000 apr Turku OuluJyväskyläLahti Tampere

2001

2002 2003 2004 O O 6 00 km north of Helsinki north km 00

ulu region in total: 250,000 250,000 in total: region ulu 199,000 ulu: 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: KTI 2014 2015 2016 77 5 Property markets in different regions – outlook for 2017 78 5 Property markets in different regions – outlook for 2017 Swedish Alma Property Partners who, together with Avant Avant with who, together Partners Property Alma Swedish the by out in 2016 carried was transaction largest The below 5%. stands still it yet in Oulu; increased has space retail of vacant amount the projects, retail of new completions the well as as centre, city inthe stores department Anttila and Stockmann the of both closings the to in 2016. Due extended was centre, city of the north in Ritaharju, centre shopping Ideapark the in 2016. addition, In completed were projects retail two centre, city the from 1.5 kilometres some area, Limingantulli in 2016. Inthe centre shopping of the development the completed Arina co-operative local the centre, city In the market. office in the player important is an inOulu, founded originally Technopolis, company property listed The strong. quite remained has market in the position whose funds, pension domestic attract to enough is large market estate real Oulu’s improved. also has situation employment sector’s construction The sector. this in investments foreign attracts region the and established, been have start-ups ICT new 500 some years, three past Within the improved. recently has situation economic 16%. at some However, the stands rate unemployment the and sector, inthis restructurings the from suffered has region in ICT. The expertise its for is known Oulu industries. metal and paper, chemical include sectors manufacturing important most The jobs. all 10% of about for account currently they and years, recent in region in the decreased has jobs of industrial number The region. of the specialities as regarded are sectors technology other and services technology Information on services. is structure economic region’s Oulu of the emphasis The network. Europe Arctic of the is part city The country. entire of the area of the one-half –about Finland of northern all covers influence whose city technology and science is auniversity, Oulu municipalities. neighbouring of merger the to due recently more and jobs, new created Value added by employee (€) parenthesis in employee by Value added Value addedby sector and region 2014 Jyväskylä region (65,150€) Jyväskylä region Tampere (70,194€) region Helsinki region (81,123€) Helsinki region Whole Finland(70,542€) Kuopio region (67,155€) Kuopio region Turku (71,774€) region Lahti region (64,858€) Lahti region Oulu region (70,606€) Oulu region 80 40 60 20 100 0 % Agriculture, forestry and fishery andfishery forestry ■ Agriculture, Private services ■Publicservices trade■Privateservices ■ Wholesaleandretail mainly residential properties. residential mainly comprised in Oulu transactions Otherwise, deals. portfolio of larger parts as or players by local out carried mainly transactions, smaller several also were Talenom. There firm accounting to is rented which property, office sqm 7,000 anew Yield OP-Rental bought summer. inthe project centre shopping Ideapark the acquired Partners Capital Swedish-language university in Finland. university Swedish-language main the example, for city, accommodating, university traditional Turku is astrong of Finland. corner south-western in the municipalities of eleven consists Turku region The Population: Location: Turku cities. major in other than moderate more been has growth However, rental in Oulu. active remains construction residential rental centres, growth in most As tenants. to attract continues centre city the city, of the whereas outskirts the on 11%. at some found be mainly stands can Vacant premises currently and increased, recently has rate vacancy office The at €12−14 stand month. per sqm currently per rents Office Linnanmaa. Technologiesin of Bittium office head sqm 8,600 is the project biggest The areas. Karjasilta and Limingantulli Linnanmaa, inthe built being currently are properties office New centre. city of the east Peltola and just University, Oulu and companies high-tech several accommodates which centre, city of the north area Linnanmaa the are of Oulu area central the outside areas market office important most The Construction ■ ManufacturingConstruction

”New offices being offices ”New built in

T T w 1 60 km west of Helsinki; in south- of Helsinki; west km 60 urku region in total: 318,000 in total: region urku 188,000 urku: estern corner of Finland corner estern Source: StatisticsFinland Oulu”

in 2016. The company is currently developing a 9,500 sqm sqm a9,500 developing is currently company in 2016. The area in the transactions in two holdings its it increased and in Kupittaa, owner major is the Turku Properties Technology space. manufacturing high-quality and of office consists and companies, service business-to-business and biotechnology at high-tech, targeted is mainly area This Turkuin the area. market office active most is the station, railway the to next and area University the near located area, Kupittaa The Properties. Technology is Turku player local largest in Turku.The invested have Trophi Hemsö, and Hemfosa, instance for including, players, Nordic Some area. in the holdings their increased recently have funds property inTurku, and investments have typically institutions Domestic players. local and domestic by is dominated market investment Turku property The Finland. 14.4%some southwest whole in the at stands it still recently, but decreased has unemployment sectors, industry in several development positive the to Thanks Turku in the region. development economic strong the to of Turku, contributes north kilometres 60 some in Uusikaupunki, growth Valmet Also, Automotive’s area. in the people 4,000 employ some bioindustries and area, Turku in the is accommodated industry medical Finnish the of Half facilities. in its investments significant made also has Werft Meyer years. several for is secured shipyard Werft Meyer in the employment the orders, major several to due strongly, and, developing is currently industry shipbuilding of view. point The development economic region’s the from importance of great been traditionally has which business, shipbuilding extensive an by supported are region in the industries Metal biotechnology. and cluster, sea the around businesses include areas competence current region’s The of the Turku region is strong” ”The economic development ”The

Photo: SATO 17 per sqm per month, and in the Kupittaa area, they are are they area, Kupittaa in the month, and per 17 sqm per €13- at about stand centre city in the space office for Rents vicinity. in its and Hansa centre inshopping found be can space retail expensive most the centre, city the In units. retail large other also and Skanssi centre shopping sqm 38,000 the accommodates area Skanssi The area. in the located is also Mylly centre shopping sqm 58,000 The retailers. car and furniture by, is occupied instance, for units of large supply abundant aquite InHauninen, centre. city of the east area Skanssi the well as as in Raisio area Hauninen the centre, city the include Turku in the area submarkets space retail important most The companies. at creative targeted centre office and centre conference arena, event is an which Centre, Logomo in the well as as areas, Port and Pitkämäki in the found be can supply office modern Kupittaa, to addition In are underway. building Pohjola hospital Group’s OP well as as building school medical a new building, hospital University new of a vicinity, construction the In the in Kupittaa. building office sqm a1,200 and arena /multipurpose sports indoor technology. The Jyväskylä region’s industry areas cover cover areas industry region’s Jyväskylä The technology. new and industries traditional both emphasises structure economic Jyväskylä’s roads. main national important several of atjunction the located town is auniversity Jyväskylä Population: Location: Jyväskylä sector. property residential rental in the well as as markets property retail in the transactions several were There Hemfosa. Swedish the to centre city inthe one sold and in Kupittaa, property office another acquired also company The Turku Properties. Technology by in Kupittaa property PharmaCity of the acquisition the was transaction biggest in €3702016. million some The to in Turku volume amounted transactions property The recently. sector in this decreased also have rates Vacancy sector. shipbuilding of the situation good the by supported is currently premises manufacturing and logistics for Demand development. low the by of level new is supported rate occupancy high The below 9%. stands and cities, main in other than lower in Turku remains rate vacancy office The month. €15-20 per higher, sqm about somewhat per ”2016 arecord was year in the continues to active be in the Turku transactions property

Kupittaa in area Turku” ”Property development development ”Property J J c 2 yväskylä region in total: 181,000 in total: region yväskylä 139,000 yväskylä: entre of Finland entre 70 km north of Helsinki, in the in the of Helsinki, north km 70 market” 79 5 Property markets in different regions – outlook for 2017 80 5 Property markets in different regions – outlook for 2017 slightly during the past year. past the slightly during increased it has although low inJyväskylä, very remains space retail of vacant amount in 2016. The of Jyväskylä south in Muurame, completed also was centre shopping smallish A in Seppälä. positive remains rents retail for outlook The 2017. in early area in the started was project sqm 10,000 2016. Another in early million €70 for centre the acquired in late2017. completion for is due and LocalTapiola’s fund area, in the started was Seppä centre shopping sqm 24,000 of a new construction The in 2016 co-operative. local bythe completed was hypermarket Prisma sqm a22,000 Seppälä, In centre. retail significant is another centre city of the north area Seppälä The investors. national some well as as retailers local include players major The centre. regional important is an centre city Jyväskylä’s market, property retail the In slightly negative. remains development rental for outlook inThe Turku. than slightlylower levels are rental properties, prime In tenants. attracting continued have in particular, offices, Modern future. near in the started be might projects up, new pick is to some demand ifspace but years, in recent scarce been has development 11%, at some New remains Catella. to offices according of rate vacancy The centre. city the to next area, Lutakko in the found be also can supply office modern Some use. office into redeveloped been have properties old industrial side, where northern in the Tourula and centre, city of the south area Mattilanniemi/Ylästönniemi the include supply modern with areas office Other locations. central most the in developed been recently has stock new no but region, the in area market office important most is the centre city The 19%. at some stands and in Jyväskylä high remains Unemployment workforce. of the 80% some employ services while industries, manufacturing in the are 17.5% Some region in the jobs of the industries. healthcare well as as ICT and materials construction and wood metal, to is that home city industrial is atraditional Lahti Population: Location: Lahti volume. total of the half almost for accounted transaction Seppä €150 some to The million. in 2016, amounted and in Jyväskylä increased also volume transaction The investors. Nordic and domestic larger attract also properties care and residential cities, main other inall As players. local by dominated are markets investment property commercial the Otherwise, funds. property and institutions Finnish attract in Jyväskylä assets largest The where there is also a strong educational base. The region’s region’s The base. educational astrong is also there where design, and tech in clean competence emphasises region The services. professional to transferred been have jobs more Recently, industries. plastics and furniture woodworking, ”Retail property development development property ”Retail

continues to active be in L L 1 04 km north-east of Helsinki north-east km 04 ahti region in total: 200,000 in total: region ahti 119,000ahti: Jyväskylä”

of 34,000 sqm. Hypermarket and supermarket property property supermarket and Hypermarket sqm. of 34,000 area a leasable with Karisma centre is shopping there area, Karisto the In street. main in the and Trio centre shopping the around is concentrated centre city in the supply Retail in 2016. completed was terminal transport public city’s The areas. pedestrian increasing and facility parking underground new a by, constructing instance, for attractiveness centre’s the increased has city The uses. other into buildings industrial old transferred have that efforts of redevelopment result a as increased has centre city of the attractiveness The city. the with merging Nastola neighboring the 2016, to due in people 15,000 some by increased of Lahti population The 16%. than less at currently stands recently, unemployment and improved markedly has However, situation the years. in recent Lahti in high been has Unemployment 30%. to decreased has share industry’s while region, in the jobs of the 60% around represent currently occupations trade and Services region. in the operators logistics attracted has location favourable with Kuopio. Traditional industry areas are mostly related related mostly are areas industry Traditional Kuopio. with merged was Juankoski municipality neighbouring the as people, 5,000 some by increased of Kuopio population the of 2017, beginning the In Finland. ineastern Savo, is situated of province of the capital the and city auniversity Kuopio, Population: Location: Kuopio Catella. to 12%, some to according increased has vacancy Office in 2016. in Lahti market transaction Rental residential properties dominated the property to be rented to other tenants. of premises sqm 45,000 some be also will 2018.by There phases in several completion for is due which project, in the tenants of is the one Science of Applied University Lahti use. educational into, instance, for in Mukkula premises factory old its is redeveloping Invest Isku use. office police for area in the property office an developing is currently Properties Senate State’s The use. residential mostly into redeveloped be to is planned area garrison Hennala former The 2017. in early area the to is moving courthouse The companies. service business for premises office instance, for redeveloped, it has where properties, of old industrial developer and is owner amajor Oy Renor station, railway the near area, Askonalue old industrial the In year. of the end at the underway in 2016 being completed one and projects recently, two with active relatively been has development ”Unemployment decreasing decreasing ”Unemployment

K K 4 00 km north-east of Helsinki north-east km 00 uopio region in total: 132,000 in total: region uopio 118,000uopio: in Lahti” in to wood. As in most major Finnish cities at the moment, the Key terminology service sector is the biggest employer in the area. Of the jobs in the region, some 8% are in manufacturing industries. The proportion of occupations in the public sector is greater Property Kiinteistö than in other major cities. In its strategy, the city emphasises Building Rakennus food, health and bio, and environmental industry sectors. Unemployment has decreased in Kuopio during the past Rent Vuokra year, and it currently stands at a lower level than in other Rental agreement Vuokrasopimus main cities outside the Helsinki metropolitan area, at some 13.8%. Of the main cities, the share of private sector jobs Tenant Vuokralainen is the lowest in Kuopio. Landlord Vuokranantaja The property investor base in the Kuopio property market Tax Vero is dominated by domestic players consisting of both national and local investors. In 2016, one commercial property Investment Sijoitus transaction was made, where Royal House acquired three Return Tuotto office / multi use properties from Ilmarinen. Lujatalo bought an educational property from the Savonia University of Yield Tuottovaatimus Applied Sciences. Operating cost / Ylläpitokustannus / Maintenance cost Hoitokustannus The Kuopio office stock is concentrated in the city centre as well as in Technopolis Kuopio’s two locations close to the Transaction Kauppa University and hospital areas. The amount of vacant space Limited company Osakeyhtiö is relatively high, and the outlook for demand is not very positive. Kuopio Energy is currently developing a 2,500 Housing company Asunto-osakeyhtiö office property for its own use. Technopolis is planning Real estate company Kiinteistöosakeyhtiö, to extend its campuses by one office and one laboratory kiinteistöyhtiö building, to be started in 2017. Mutual real estate company Keskinäinen The retail space market in the Kuopio city centre is kiinteistöyhtiö competing with the newly constructed Matkus Shopping Real estate investment company Kiinteistösijoitusyhtiö Center some 10 km outside the city. The city centre’s attractiveness has been supported by the completion of Pension insurance company / Eläkevakuutusyhtiö / an underground parking facility and the refurbishment of Pension fund Eläkerahasto some retail properties. In the city centre, VR Group, the Property fund Kiinteistörahasto City of Kuopio and Lapti Group are planning to start the construction of a 37,000 sqm travel centre and multi-use Office (space) Toimisto(tila) property in 2018. Retail (space) Liiketila, Myymälä(tila)

OP’s Real Estate Fund Finland III is currently developing a Shopping centre Kauppakeskus hospital building for the Group’s OP Omasairaala. In the Industrial Teollisuus Neulamäki area, west of the city centre, two logistics and distribution property development projects were completed Manufacturing Tuotanto in 2016. Warehouse Varasto Logistics Logistiikka Hotel Hotelli

Residential Asunto Site Tontti

81 investments are leveraged in order to optimize the return. The sponsors Each fund and account has its own in-house team focusing on active portfolio and asset management. of this publication For our tenants we provide service concepts such as Carefree Space and Easy Going Home, including business premises and rental homes with all accessory services. The market value of the assets under our management Helsinki is the commercial, political and cultural capital is over three billion euros. We have extensive knowledge of Finland and a dynamic hub for international business, and insight of the Finnish real estate business, including with Finnish infrastructure that excels in terms of physical investment strategies, transactions, management and letting. transportation as well as telecommunications. We are part of the finance house LocalTapiola Group, and Helsinki is also a wonderful region for working, playing, we benefit from the group’s vast and versatile financial studying and living. It is clean, stable and secure, with a very knowledge. www.lahitapiola.fi/kiinteistovarainhoito high standard of living and welfare. More than a third of Helsinki inhabitants have higher-level education. According to estimates, there will be 860,000 people living in the city and 1,882,000 in the region by 2050. New residential and working areas currently under construction make Helsinki one of the fastest growing metropolises in Europe. Newsec offers a wide range of integrated professional As a prime location for innovative companies, Helsinki advisory services comprising investment transaction welcomes organisations of all sizes. The City of Helsinki advisory and leasing brokerage, valuation and analysis, real offers consultation regarding the business conditions of the estate consultancy and corporate finance services as well city to investors and companies that are looking for a new as asset and property management, corporate real estate location. The City also provides support for developers and management and corporate solutions. Founded in 1989, investors looking for real estate projects. www.helsinki- Newsec Finland is part of the Newsec Group headquartered finland.fi in Stockholm, Sweden. Newsec has over 270 employees in Finland, with offices in Helsinki, Tampere, Turku, Jyväskylä, Hämeenlinna, Kuopio, Oulu, Imatra and Vaasa. Its clients are among the leading Finnish and international real estate investors and corporations. In a survey carried out in 2017 by the Great Place to Work Institute® Finland, Newsec KIINKO Real Estate Education is Finland’s leading training Finland was nominated for the tenth time among the top company offering a wide range of higher professional workplaces in Finland and as the best workplace within the education and training services for middle management real estate industry. and executive-level leaders operating in the real estate and Newsec – The Full Service Property House in Northern construction industries. Europe – is by far the largest specialized commercial property The company’s unique concept brings together all firm in the region. Newsec offers a comprehensive range of players in the industry – end-users, developers, service services within Capital Markets, Leasing, Asset & Property providers, investors and financiers. This gives KIINKO Management, Valuation & Advisory and Corporate Solutions Real Estate Education excellent insight into the needs of its to property owners, investors and occupiers. Newsec was customers and their businesses. founded in 1994 and is owned by its partners. Today, the RE Finland (formerly The Annual Convention of Group employs over 1,000 professionals in 33 offices. Property Investment Prospects) is one of the main events Every year Newsec carries out hundreds of successful organized by KIINKO Real Estate Education. With over assignments and manages over 2,000 properties with over 500 participants, combining both seminars and extensive 16 million sqm. Through this great volume, and with the networking it is The Finnish Real Estate Summit gathering breadth and depth of its various operations, Newsec has executive and expert level representatives from real estate superior knowledge of the real estate market. related businesses in Finland. www.newsec.com, www.newsec.fi www.kiinko.fi and www.refinland.fi

REAL ESTATE ASSET MANAGEMENT LTD The Ovenia Group is Finland’s leading provider of asset, property and facility management services. The group LocalTapiola Real Estate Asset Management Ltd provides consists of mother company Ovenia Group Ltd, facility real estate portfolio and asset management services to management company Ovenia Ltd, property management separate account investors, and customises portfolios to company Ovenia Isännöinti Ltd as well as real estate meet the best allocation in the direct Finnish real estate consultancy Realprojekti Ltd, which specializes in shopping sector for each separate account. centres and development projects. We provide well-structured real estate funds to Ovenia’s comprehensive service offering covers all institutional or large real estate investors. The funds are sub-areas of real estate asset management and property developed by us; and the fund and the assets are in our management. Ovenia has four key strategic business areas: professional hands. Our funds give investors a defined risk commercial real estate management, business premises and return exposure in the Finnish real estate market in management, residential property management and housing range of the specific fund strategy and sector allocation. services. Ovenia’s main services are leasing (commercial and Our funds invest in direct properties in Finland, and their office premises), property development, shopping centre 82 management, construction and property management business is reflected in its presence in some 20 countries services, housing, real estate financial administration and worldwide. SEB has 4,000,000 private customers, 400,000 business premises facility management (incl. business parks). SME customers and 3,000 large corporations and institutions With over 30 years of experience in business and as customers. The Group has about 15,500 employees. commercial premises and over 70 years of experience in SEB has been present in Finland since 1984, and today residential management, Ovenia is the leading company in has 350 employees based in central Helsinki. its field in Finland. In recognition of its work, Ovenia was the Real Estate Finance, which is a part of Large Corporates first company in Finland to receive ISO 9001 certification & Financial Institutions division, is responsible for real estate for property management. The Ovenia Group administers clients and offers financing, including structured finance and a property portfolio amounting to over 10 million square other SEB products to real estate clients in Sweden, Finland, meters across Finland and the Group’s turnover for 2015 was Norway, Denmark and Germany. approximately €48 million. The company employs over 500 www.sebgroup.com or www.seb.fi property professionals in 23 locations. www.ovenia.fi, www.realprojekti.fi

Sirius Capital Partners is a real estate investment manager focusing on opportunistic and value-add real estate investments in Finland. We make co-investments on a deal- The Finnish Association of Building Owners and by-deal basis, as well as funds or club deals based on an Construction Clients is an interest group and trade investment theme. Our investors range from global and association representing the most prominent real estate, local institutions to multi-managers. residential building and infrastructure owners, investors An exceptional track record in the Finnish real estate and management service providers in Finland. The members investment market, coupled with experience in working represent both the private and the public sector, and member together with leading global investors, makes Sirius a organisations number over 200 in total. The association unique investment manager. Sirius’ partners have extensive brings together real estate and construction professionals. experience in retail estate investments and in principal RAKLI’s activities are divided into three branches and positions in leading industry firms over the past 10-15 years. three committees. The branches are Residential Properties, The firm advises Sirius Fund I Grocery and Sirius Fund Commercial and Public Properties, and Urban Development II. Both funds are fully invested with €235 million in equity and Infrastructure. The committees coordinate investment in total. www.sirius.fi and finance, property management and procurement. For more information, visit: www.rakli.fi.

Skanska is one of the world’s leading project development and construction groups with expertise in construction, development of commercial and residential premises, and SATO is one of Finland’s leading rental housing providers. public-private partnership projects. Based on its global green SATO’s aim is to offer comprehensive alternatives in rental experience, Skanska aims to be the client’s first choice for housing and an excellent customer experience. SATO holds green solutions. The group currently has about 43,000 roughly 25,300 rental homes in Finland’s largest growth employees in selected home markets in Europe and the US. centres and in St. Petersburg. Skanska’s sales in 2016 totaled €16 billion. In our operations, we promote sustainable development Skanska’s operations in Finland cover construction and initiative-taking, and work in open interaction with our services, residential and commercial project development stakeholders to create added value. We operate profitably and public-private partnerships. Construction services and with a long-term view. We increase the value of our include building construction, building services, and civil housing property through investments, divestments and and environmental construction. The combined sales for repair work. Skanska Oy’s operations in 2016 were approximately €946 We have operated in the housing market for 76 years. million and the company employed 2,018 people at the end We believe that in thriving cities people enjoy a high level of of the year. well-being, and with some 175 passionate employees we want Skanska CDF Oy is part of Skanska Commercial to revolutionise housing, to make it more than just walls. Development Nordic, which initiates and develops office SATO Group’s net sales in 2016 were €318.0 million, properties. The company’s operations are concentrated in operating profit €267.2 million and profit before taxes the three metropolitan regions in Sweden, the Copenhagen €219.4 million. SATO’s investment properties have a value region in Denmark, the Oslo region in Norway, as well as of roughly €3.4 billion. www.sato.fi Helsinki in Finland. www.skanska.fi

SEB is a leading Nordic financial services group. As a relationship bank, SEB in Sweden and the Baltic countries offers financial advice and a wide range of other services. In Finland, Norway, Denmark and Germany the bank’s operations have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB’s 83 84 Publisher

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

ISBN 978-952-9833-50-4

Photos: Sponsor companies’ archives

REAL ESTATE ASSET MANAGEMENT LTD The Finnish Property | 2017 Market 2017

THE FINNISH PROPERTY MARKET 2017 KTI Finland in co-operation with: City Helsinki; of KIINKO Real Estate Education; Newsec;LocalTapiola; Ovenia Group; RAKLI; SEB Group; Sirius Capital SATO; Partners and Skanska.