By Andreas Schiller
May 2007

The real estate markets in Northern Europe are stable and solid. High liquidity and transparency are paying off just as much as positive economic data. Direct and indirect investments are increasing.

Photo: The Øresund Bridge, the railroad and street connection between Denmark and southern Sweden symbolises the increasingly close relationship of the Nordic states. Even when looking at the investment flows in the Nordic countries, it is clear the markets are merging.

There is a joke from the real estate industry: Hoping for a mandate with one of the Nordic investors, a real estate agent—whether British or German—met this investor for dinner. At the end of dinner, the investor asks him to order another drink. Well, the real estate agent orders two beers. The investor, however, doesn’t drink it. The agent asked the waiter what he did wrong, and the waiter answered, “You should have ordered vodka.” The agent asks, “Why vodka?” The waiter said, “Well, it has more liquidity and transparency.”

High transparency and low transaction costs

Our waiter seems to know something about the real estate industry. It is true the Nordic markets are characterised through liquidity and transparency. Sweden is the forerunner.

In the “land register” that is ope3rn to everyone on the internet, you can find the exact addresses, and data about buyers and sellers, as well as price and time of transaction. Also, anyone can see who paid how much tax or who did not. “High transparency—through a lot of open information—combined with impressive macroeconomic data, a good infrastructure with transactions—agents are always working for one side only—and low transaction costs are some of the contributors to a liquid real estate market,” Gunnar Widenfelt, Deputy Head of Commercial Real Estate of SEB AG in Germany, stated at the event “Nordic Boom” held by Catella Property Group in Frankfurt am Main in the spring of this year. More than 100 real estate experts were there to become more familiar with the Nordic markets. Interest “up North” is not only found in Germany, but in many other European and other markets. Who is going there and why?