Differences and similarities

The mentioned factors are generally true for the Nordic markets, but each country is unique. The first mistake is usually made through wrong use of the term “Scandinavian”: Scandinavia includes Sweden and Norway, and—separated by water—Denmark and Norway.

Finland is actually a world of its own, which (in part) belonged to Sweden for centuries—bilingual street signs in Helsinki and other cities are reminders. It also has more than just a geographical closeness to the Baltic countries, particularly Estonia. Estonia, Latvia and Lithuania identify themselves more with the Nordic world than the Eastern world—in part because of its emancipation from Russia. They are also included in the so-called “Baltic Sea States”, as well as Germany, Poland and the Russian Federation.

As differentiated as the Nordic world is, it is also closely connected. The now completed Øresund Bridge is a symbol of this closeness, which connects Denmark and Sweden as a railroad and street bridge: from the Swedish city Malmö, one can reach the Danish capital Copenhagen faster than the own Swedish capital Stockholm.

Denmark, Sweden and Finland were top runners this spring in fulfilling the Maastricht criteria, according to the statistics of the European Union. As much as this value unifies the three countries, a closer look at the winners is different. With roughly 9.1 million residents and 450 square kilometres, Sweden is the largest of the three Nordic countries. Finland comes in at 5.4 million residents and Denmark with 5.3 million residents. Finland, however, has 338 square kilometres of space—eight times more space than Denmark that comprise only 43 square kilometres. In Norway, 4.6 million people live in a space of 324 square kilometres.

Looking at the capitals and their surrounding regions, Stockholm, with around 1.9 million residents is roughly the same as Copenhagen with 1.8 million, followed by Helsinki with about 1.2 million and Oslo with one million residents. Do not be fooled by the selling prices either. The Euro is only valid in Finland; the other countries still use their national “Crown” as their currency.

Photo: Helsinki offers interesting opportunities for investors through its many urban development and renewal projects. For example, on the former harbour area a new inner-city quarter will be developed in direct proximity to the completed project Ruohalahti.

New record in transaction volume

Catella estimates the total commercial transaction volume in 2006 for Denmark, Finland, Norway and Sweden as roughly 30.6 billion Euros. That is a new record compared to the past years. “This amount translates into a market share of 13 percent of the total European region,” explains Johan Ericsson, CEO of Stockholm-based Catella Property Group. The majority share goes to Sweden with 14.5 billion Euros. The transaction volume in Norway, coming in at second place, is half as large—7.8 billion Euros, followed by Finland with 5.5 and Denmark with 2.8 billion Euros.

This means an increase in all four countries compared to the previous year. The share of international investors, however, is very different: In 2006 in Denmark and Finland, the share of international investors was around half—50 and 54 percent, respectively. The share of international investors in Sweden was only 39 percent and in Norway only one percent. “No way to Norway” is a suitable expression, but there is really no reason for this, since the country has many excellent capitalised investors as well as several properties that would certainly be sold. According to IPD Investment Property Database calculations, the income returns for 2006 for office and retail were 6.7 percent. In the calculations for capital growth, returns for office space were 10.8 percent and 9.1 percent for retail. These figures are not much different from those for Denmark and Sweden.

Italy
Positive trend reversal