The Finnish Property Market 2009 - KTI

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Prime office yields in Finnish cities 10 9 8 7 6 5 Helsinki Espoo Tampere Turku 05-1995 09-1995 05-1996 09-1996 05-1997 09-1997 05-1998 09-1998 05-1999 09-1999 05-2000 09-2000 05-2001 09-2001 05-2002 09-2002 05-2003 09-2003 05-2004 09-2004 05-2005 09-2005 05-2006 09-2006 05-2007 09-2007 05-2008 09-2008 (09-2009) Source: KTI´s barometre survey 5.2 The retail market: strong performance stabilising Stock There is some 6.3 million square metres of retail space in the major Finnish cities altogether. The Helsinki area accounts for some 3.1 million square metres. New development in retail space has been geographically more diversified than in the office markets. While office development has concentrated in the Helsinki metropolitan area, new retail space has been built or is being planned in all growth regions in Finland. At the same time, the stock becomes more varied, with traditional city centre high street locations competing with new suburban and out-of-town shopping centres and retail areas. “New retail space has been developed in all growth centres” Helsinki market will be more moderate than in the cities with greater volatility. Helsinki appears to be a significantly more stable market even compared to its Nordic peers, Stockholm and Oslo. Rental levels also have remained relatively moderate and stable in Finnish cities in comparison with other European cities. The increase in rents in prime office locations, which started in late 2005 in the Helsinki CBD, seems now have ended. However, offices in the Helsinki centre are expected to survive the crisis with the smallest damages thanks to limited supply and CBD’s unquestionably dominant position within Finnish office locations. In other locations, especially those with increasing supply and varied stock, rents are expected to fall more significantly. Players Finnish pension funds, property companies, international investors, local investors and owner-occupiers comprise the main investor groups in the Finnish retail sector. The ownership of shopping centre properties is concentrated in big investors’ portfolios. The Finnish shopping centre market is dominated by Citycon plc, which currently owns 22 shopping centres in Finland, eight in Sweden and three in the Baltic countries. Some Finnish pension institutions own whole, typically regional, shopping centres, but also often enter into joint investments with other investors in bigger centres. For example, the Sello shopping centre in Espoo is owned jointly by three pension 36 Prime office rents, Q4/2008 The Finnish Property Market 2009 London Moscow Paris Dublin Milan Madrid Oslo Stockholm Warsaw Amsterdam Helsinki Brussels Budapest Berlin 0 200 400 600 800 1000 1200 e/sqm/year Source: Jones Lang LaSalle, KTI (Helsinki)
TOP 10 shopping centres in Finland Center Retail GLA Main Owners Location ITÄKESKUS 112 498 Wereldhave Finland Ltd HELSINKI SELLO 97 000 KEVA, Etera, Pension Fennia ESPOO IDEAPARK 91 712 Private investors LEMPÄÄLÄ JUMBO 85 000 Rodamco Europe, Pension Fennia, HOK-Elanto, Kesko Plc VANTAA ISO OMENA 48 800 Citycon Plc ESPOO MYLLY 45 321 Kauppakeskus Mylly Ltd RAISIO TRIO 37 100 Citycon Plc LAHTI HANSA 36 688 Several owners: institutions, non-profit fund, property companies TURKU KAMPPI 35 000 Protego Nordic Retail Fund HELSINKI MYYRMANNI 33 000 Citycon Plc VANTAA Source: Finnish Council of Shopping Centres institutions. The Finnish shopping centre market has also attracted foreign investors, such as Wereldhave, Rodamco- Unibail, ING Reim, Protego Real Estate and GIC Real Estate. Domestic property funds, such as those managed by Aberdeen and CapMan, have also invested in shopping centres, concentrating in smaller centres in the Helsinki area and some larger ones in other cities. New development of shopping centres has slowed due to the economic downturn. Of the major projects being planned around Finland, not many will be started before the revival of the financing market and more positive signs from consumer demand. During 2008 and 2009, however, new regional shopping centres have been and will be completed in Tornio, Espoo and Turku, for example. All these centres are in the midsize category of 20,000–40,000 sqm. High street shops are typically located in CBD office buildings, and, therefore, major office investors, such as Sponda and Ilmarinen, also are significant retail owners. Hypermarket and supermarket investments have traditionally been favoured by Finnish institutions. This sector has also attracted foreign investors recently, including AEW Europe and AXA, for example. Supermarket operators normally take a 15–25% responsibility for the entire building. In a hypermarket, the main tenant occupies more than 50% of the floor space. Retail operators – SOK and Kesko, in particular – still remain major owners of hypermarket and supermarket buildings. 37 The Finnish Property Market 2009
Page 1: The Finnish Property Market 2009 1
Page 5: Contents Preface 7 1. Basic facts a
Page 8 and 9: 1. Basic facts about Finland 2. The
Page 10 and 11: subordinated loans or state guarant
Page 12 and 13: Key Figures - Finnish Economy 2001
Page 14 and 15: 14 The Finnish Property Market 2009
Page 16 and 17: The indefinite leases often last lo
Page 22 and 23: Real estate investments’ proporti
Page 26 and 27: The Finnish fund managers concentra
Page 32 and 33: 5. Property sectors - market struct
Page 34 and 35: The office market in 2009 The deman
Page 38 and 39: Rental practices Rental practices i
Page 42 and 43: 5.4 Logistics market - a developing
Page 44 and 45: The Helsinki Central Business Distr
Page 46 and 47: Preferred office locations in Helsi
Page 48 and 49: 6.2 Other growth centres: Tampere,
Page 50 and 51: Throughout the recent years, the va
Page 54 and 55: Key terminology Property Kiinteist
Page 56: 56 The Finnish Property Market 2009

The Finnish Property Market 2009 - KTI

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