Cross-border investment in Nordics surges 23%

09 August 2017

Cross-border investment into Europe's Nordic countries (Denmark, Finland, Norway and Sweden) rose to €5.5billion in the first half of 2017, 23% up on the same period in H1 2016. This represents a 29% share of the total volume invested in the Nordics in the year to date, according to research by international real estate advisor Savills.

Sweden and Norway were the principle recipients of international money, accounting for 66% of total cross border volume, according to Savills. Overall total investment volume in the Nordics reached €19 billion in H1 2017, slightly lower than the record high reached in the same period last year, however Savills expects full-year volumes to reach €33 billion, an increase of 4% on 2016’s total.

H1 investment in Denmark reached a new H1 record this year at €4.2 billion, 19% up on the same period in 2016, says Savills, while in Norway H1 2017 turnover almost doubled to €4.4 billion as a result of a surge of investment into the hotels sector. Half year investment in Sweden reached €7.8 billion, down on 2016 levels, but still 19% higher than the five-year H1 average, while activity in Finland decreased 32% during H1 due to a lack of available prime opportunities.

According to Savills research, offices remain the preferred investment sector, accounting for 34% of all H1 investments in the Nordics, down slightly from 39% in H1 2016. The ‘multi-family’ sector saw a 3% rise in investment on the same period last year, accounting for 28% of the market and receiving €5.4bn, ahead of retail (22% market share, up from 17%) and logistics (10%).

Lydia Brissy, European research director at Savills, comments: “The highly urbanised nature of the Nordics, combined with population growth, is driving a need for professionally managed residential accommodation of different tenures and sizes in major cities such as Copenhagen and Helsinki, and this has caught investors’ interest sending volumes up. Meanwhile, strong investor appetite for offices last year saw the average Nordics prime office yield move in to 3.75%. This is still more attractive than prime office yields in core European countries such as France and Germany, so the sector continues to attract strong investment, but it has did lead to some buyers exploring what other opportunities there were in the marketplace, hence the rise of multi-family.”

Peter Wiman, Savills acting head of Swedish investment, adds: “Overall the property fundamentals of the Nordics are solid, with the region offering an alternative option to core European destinations, given its very competitive pricing. As in any other European markets, alternative assets such as multi-family will continue to capture a growing share of total investment, but we forecast that senior housing in Finland, Sweden and Norway, student housing in Denmark, and the hospitality sector in Norway will also grow in popularity, albeit offices will probably continue to prevail in the face of strong rental growth.”

Read Savills 2017 Nordics report here.  

 
 

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Lydia Brissy

Lydia Brissy

Director
European Research

Savills Margaret Street

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Peter Wiman

Peter Wiman

Head of Research / Head of Investment

Savills Stockholm

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