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Residential property driving Nordic market close to transaction record in first half of 2018

Press Release   •   Jun 29, 2018 08:30 CEST

Aker Brygge, Oslo

The overall transaction volume in the Nordic property market reached the second highest level ever in the first half of 2018, driven by large investments from international investors in the residential sector.

According to new figures from Pangea Property Partners, transaction volumes in the Nordic property market reached almost €21 billion in the first half of 2018. This is a decrease of 10 percent from the same period last year, but still the second highest level ever recorded.

“The transaction activity continues to be very lively. Typically, the volume is slightly lower in the first half of the year, and we could very well be heading for a new record year in 2018,” said Mikael Söderlundh, Head of Research and Partner at Pangea Property Partners.

Country-wise, volumes have increased in Denmark (+57 percent) and Norway (+11 percent) from last year, while the volume in Finland has decreased (-48 percent) from a high level. Sweden remains the largest property market in the region, but the volume has dropped 16 percent from the first half of 2017.

Based on property transactions above EUR 5m

The Nordic property market remains attractive for international investors. Foreign buyers accounted for 41 percent of the volume in the first half of 2018, and in Finland and Denmark the share of foreign buyers was 66 percent and 57 percent respectively.

The largest sector in the first half of 2018 was residential, accounting for 32 percent of the volume, overtaking office, which was the largest sector in 2017 but now accounts for 23 percent, followed by retail, accounting for  17 percent. The average transaction size amounted to €44 million, which is slightly lower than last year.

“The interest in the Nordic residential market has increased significantly among international investors, and we have seen several large portfolio deals in 2018. The investors are seeking both prime residentials as well as development projects across the Nordics,” saidBård Bjølgerud, CEO and Partner at Pangea Property Partners.

The largest property transactions in the Nordic region in the first half of 2018 were:

  1. Starwood's and Vonovia's acquisition of Victoria Park with residential properties in Sweden (SEK ~14.3bn)1
  2. Heimstaden Bostad's acquisition of several residential portfolios in Denmark and Norway (SEK 8.4bn)2
  3. Cibus' acquisition of 123 grocery stores in Finland (EUR 0.8bn)
  4. Danica's acquisition of SEB Pension with properties in Denmark (DKK 6.2bn)3
  5. Asset Buyout Partners' acquisition of Mongstad Group with properties in Norway (NOK 4.0bn)

1 Shares acquired as of end of June 2 Adjusted for ownership change before and after 3 Part of full company takeover

During the first half of 2018, Pangea Property Partners has executed about 30 transactions and advisory mandates across the Nordics with an underlying property value above €1.5bn. For example, the company advised Starwood on the acquisitions of Victoria Park (32 percent of the votes) and residential project Primus 1 in Stockholm (together with Oscar Properties), and Aspelin Ramm on the sale of ALNA senter in Oslo for NOK 2 billion, the largest Nordic retail single asset transaction so far in 2018.

“We have a strong current pipeline with several different types of mandates and we expect transaction activity to remain high throughout the year,” added Mr. Bjølgerud.

Attachments

  • Chart: Nordic transaction volumes, 2008-H1 2018
  • Chart: Nordic transaction volume split by geography and sectors, H1 2018
  • Chart: Share of foreign buyers in the Nordic countries, H1 2018
  • Pictures

Pangea Property Partners is an independent Nordic corporate finance and advisory firm focusing on the real estate sector. The company has offices in Stockholm, Oslo and London with more than 30 employees. We also have a strategic cooperation with Mrec in Finland. Since 2010, Pangea Property Partners has advised on more than 350 transactions with an underlying property value above €29 billion. The mandates include property divestments and acquisitions as well as large corporate transactions, capital raisings and debt financing.

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