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Rents and returns

There are even differences in the size of the markets. The volume of office space in both Stockholm and Copenhagen are more than ten million square metres. Oslo has 8.5 million and Helsinki—depending on the market report—between 7.5 and eight million square metres. The vacancy rates in Helsinki and Oslo are roughly 6.5 percent. Stockholm is at the high end of the scale with 12 to 13 percent. Copenhagen is at the lower end with around four percent.

Initial returns are noted by Riwis, Jones Lang LaSalle and Atisreal between 3.75 and 5.5 percent, depending on the market and method. There were significant differences in top rents. Stockholm leads the list with 431 Euros per square metres and year. The top rents in Copenhagen are only at 241 Euros per square metres and year. Helsinki and Oslo are in the midfield at 292 and 352 Euros per square metre and year, respectively—and can be compared to Hamburg and Munich. “Comparing market size, Stockholm and Copenhagen can be best compared with Frankfurt am Main; Helsinki and Oslo with Düsseldorf,” explains Gunnar Widenfelt from SEB AG.


Photo: Sweden and its capital Stockholm attract most commercial real estate investments. However, the relative share of international investors is lower than in the smaller countries of Denmark and Finland.

Among the record number of investments, a few transactions —both direct and indirect—can be highlighted. In 2006, mega deals were played out in the Nordic countries, also among Nordic players. With a total value of roughly 1.3 billion Euros, the state-owned real estate company Kapiteeli in Finland was taken over by the real estate stock company Sponda. In Sweden, Atrium went to Ljungberggruppen for a little more than one billion Euros.

More large investments included the purchase of two mixed-use portfolios, according to published data from Newsec: Keops from Denmark bought 172 properties from the Swedish company Kungsleden for nearly 700 million Euros. This is the largest real estate transaction ever in Sweden. SEB and Aberdeen bought a mixed-use portfolio in Norway for roughly 605 million Euros. For around 303 million Euros, Keops took over a Swedish office portfolio from GE Real Estate. That makes the Danish Keops not only the largest international investor in Sweden in 2006, but also the largest in general, followed by the national real estate companies Kungsleden and Fabege.

The Norwegian Norgani Hotels bought a hotel portfolio from the Finnish Kapiteeli for more than 300 million Euros. For over 300 million Euros, CapMan Real Estate Fund I sold an office portfolio with 22 properties. Boultbee Construction and the Royal Bank of Scotland bought the Kamppi Center in Helsinki from SRV Yhitöt Oyi, Pontos.

In Stockholm, Alecta took over the World Trade Center of Hufvudstaden for 331 million Euros. The largest single deal was the sale of Sturegallerian: this property went from Diligentia to Tamweelview European Holdings for 440 million Euros.

For 2007, experts from Newsec expect to continue see office real estate—whether single properties or portfolios— on the market, but also expect comprehensive investments in retail, logistics and larger residential portfolios.