International real estate investors are returning to the Helsinki region after a few-year absence. Last year, foreign real estate investments in Finland – and particularly in the capital region – grew considerably in comparison to the preceding four years, reveals Erkki Hakala, the managing director of the property transactions advisor Catella.
“In terms of investments, we are returning to the levels that preceded the boom in 2007,” Hakala says.
After discovering Finland in the early 2000s, foreign real estate investors and equity funds have acquired Finnish properties valued at a minimum of 15 billion euros. Although exact statistics are unavailable, most of the money ends up in the capital region, with especially Helsinki welcoming foreign investors with open arms.
“They bring us capital, […] and capital is welcome,” summarises Hannu Penttilä (SDP), the deputy mayor of Helsinki.
The investments peaked in 2007, when foreign investors acquired Finnish properties valued at nearly four billion euros. In the subsequent years, however, real estate investments waned across the world in the face of economic uncertainty and difficulties in securing capital.
“Helsinki is the number one target in Finland. It's difficult to kindle the interest of international investors in smaller localities,” says Thomas Blumberg, an expert at the consulting firm PwC.
Blumberg is confident that investment activity will pick up in the coming years, but also calls attention to the problems in the Helsinki region's real estate market. “There is a lack of suitable targets on the market. Nor is the fact that the capital region has one million square metres of empty office space exactly good news.”
Both Blumberg and Hakala also estimate that the illiquidity of the Finnish market is a disincentive to foreign investors. In Sweden, the size of the real estate market is five times that of Finland and transactions are completed notably faster. For investors, being able to sell their assets is an important factor when mulling over an investment opportunity.
Thus far, international investors have been drawn particularly by the Helsinki region's large shopping centres, most of which are currently in foreign ownership.
Jyri Hänninen, Joonas Laitinen – HS
Aleksi Teivainen – HT
© HELSINGIN SANOMAT
Photo: Aku Isotalo / HS