​Persistent investor demand throughout the Nordics

Cushman & Wakefield “Property Investor Confidence Index” is summarized for the Nordics. Persistent investor demand throughout the Nordics - Investors are experiencing a new situation throughout the region as the post Covid-19 outbreak.

Stockholm, 8 May 2020 – Rising concerns among property investors are characterizing the Cushman &

Wakefield Nordic Property Investor Confidence index results for Q2 2020. However, the Nordic markets are all still active with almost every second responding investor planning to add to their portfolio in the coming quarter. Positive figures with over 50% of investors in Denmark and Norway identifying as net buyers and with only 2% in Sweden planning to decrease their own portfolio through sales in the coming months. Swedish investors are also the most optimistic in expecting new business opportunities due to Covid-19.

Annika Edström, Head of What´s Next at Cushman & Wakefield in Sweden: “Looking at the real estate investment markets in a European comparison, we are highly encouraged by the activity in the Nordics. Digital maturity and access enable business also in the new reality ahead and makes it possible to interact and work through digital solutions available on the market. Innovation and curiosity have made it possible for us to recently close a deal with buyer, seller, consultants and lawyers in different physical locations. This is exciting and we experience many clients in Sweden being positive and curious about new tools and habits necessary to sustain physical social distancing and still get the work done.“

Transaction volumes are predicted to return to pre-Covid-19 volumes again in 2021. Over 50% of participating investors in all Nordic countries are currently evaluating new deals. However, the current uncertain situation has also had a significant impact on the results for both expected upcoming financing conditions and portfolio value development a shift from relatively positive to negative outlook. All markets have seen lower expectations with stable or decreasing values on portfolios and risks of increasing financing costs in the short term. Highest concerns for increased financing costs are observed in Finland, with lower in Norway and Denmark. Danish investors are most positive in terms of own portfolio development. Least positive are the investors in Sweden where none are expecting a positive value development on current assets in the coming quarter.

Hans Petter Skogstad, Head of Research / COO at Cushman & Wakefield Realkapital in Norway: “The hunt for returns continues as investors have both the money and the willingness to invest. Even though property values are expected to decrease in the short term, investors want to grab the opportunity to increase their portfolio. Investors believe that we have to wait until next year before the total transaction volume is back to pre-corona market volumes. At the same time, they respond that they are ready to invest now if the opportunity arises. We see a possibility that the transaction market in Norway may return quickly after the summer holidays.”

Factors impacting the value development are continuing yield development. New for this quarter is that the vacancy development is increasing in importance, pushing down the importance of rental development. Sweden and Finland have also investigated expected upcoming demand for occupier space. Historically high 100% of Swedish investors expect decreasing demand on retail, the worst result since Cushman & Wakefield started to collect data in 2008. Finland on the other hand is expecting an increasing demand for logistic and industrial space.

Ville Suominen, Partner Valuation & Research at Cushman & Wakefield in Finland: “The transaction market halted in the end of Q1 as the COVID-19 pandemic spread and containment measures kicked in, although some ongoing residential and logistic deals were closed by the end of this quarter and the beginning of Q2. Thus, we are extremely positive to see that 40% of the participating investors in Finland have the objective to buy rather than to sell in the coming quarter. As many of the investors view residential and logistics the ‘safest bet’ to cope with COVID-19, most likely these are the sectors where we will see rising activity ahead.”

Cushman & Wakefields Nordic Property Investor Confidence Survey

Cushman & Wakefield Nordic Property Investor confidence index, normally issued bi-annually, is launched in an extra Q2 edition due to the Covid-19 outbreak. The report provides recent confidence for the coming quarter and further insight on how investors expect to and already react in terms of investments and managing properties due to the economic effects of the virus. The report is based on surveys simultaneously sent out to Cushman & Wakefield investor clients in Denmark, Norway, Sweden and Finland. The latest survey was conducted among professional property investors on the 20-25 April 2020.

Further information, please contact:

Annika Edström
Head of What’s Next
+46 70 2345 925
annika.edstrom@cushwake.com