«The Finnish property market reached a record level transaction volume of EUR 6.0 billion in 2007 with the share of foreign investments increasing to 65%. The investment market remained active also in the latter half of the year especially by Finnish investors. Over half of the transaction volume took place outside the Helsinki Metropolitan Area, led by a number of portfolio transactions. The beginning of this year has already seen large transactions take place as CapMan’s new hotel fund purchased a hotel portfolio for EUR 805 million and Citycon sold 40 % of its share of Iso Omena shopping center, purchased last year, to an affiliate of GIC Real Estate, the property investment arm of the Government of Singapore Investment Corporation. Uncertainty in the financial market, however, has decreased the availability of bank funds and the costs of financing have increased. This has led to a rise in riskier objects’ yields and therefore a decrease in values. The Helsinki Metropolitan Area office vacancy rate was 8.0 %, a situation which has remained constant for the last 3 years. Office construction however is very active and approx. 240,000 m2 of new office space will be completed in 2008. We expect the vacancy rate for the whole region to rise to a level of 9-10 % by 2009 at the latest. Vacancy rates in older office premises will rise as tenants show a preference toward new and efficient premises, causing pressure for owners to develop and renovate older premises. Retail and logistics premises are well in use, vacancy rates are low, and prime objects are desired investment objects despite low yields. Although 2008 will provide challenges, continued strong international demand and stable core yields should allow the Finnish property market to ride out the coming cooling down period in the economy» (CS della Società)
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