Last year’s surge in real estate investment in the Nordics looks set to be repeated in 2015 as domestic and foreign investors vie for opportunities to maximise returns in the region, market experts told PropertyEU's Nordics Investment Briefing in London on Thursday.

Last year’s surge in real estate investment in the Nordics looks set to be repeated in 2015 as domestic and foreign investors vie for opportunities to maximise returns in the region, market experts told PropertyEU's Nordics Investment Briefing in London on Thursday.

‘We have seen a lot of activity in 2014 and we expect to see a lot more this year, as our clients are keen to invest in the region,’ said Michael James of Paul Hastings, the international law firm which hosted the briefing.

‘2014 was a historic year for the Nordics investment market, which attracted 20% of all investment into Europe. Property investment increased by at least 60% compared to 2013 and by more than 240% compared to 2009, and the momentum seems to be continuing this year,’ said Marcelo Cajias, senior manager of research at Patrizia Immobilien.

‘It is prime time at the moment in all four countries,’ said Andrew Smith, managing director of financial advisor and asset manager Catella. With the eurozone still in turmoil, the main attractions of Norway, Sweden, Finland and Denmark are their macroeconomic stability, characterised by low levels of debt, good GDP growth, modest and stable inflation and good domestic demand – as recognised by their common triple-A status. Having control over their currencies is an added attraction for many investors.

Unlike many European countries, ‘they will not fall into deflation this year, which is very important for household spending and for investments’, said Cajias, as people will not defer purchases in the expectation that prices will fall.

For retail specialists like Grosvenor Fund Management, the macro picture is particularly important and reassuring. ‘The high wealth and high savings rates make us very comfortable with the outlook for the Nordics,’ said chief executive James Raynor. Grosvenor has been in Sweden, which accounts for 25% of its investments in the region, since 2011, and expects its business there to grow.

‘We see our presence as a regional play so we will definitely expand to other Nordic countries, depending on opportunity. On top of a solid macro picture, there are many micro issues that make sense,’ Raynor said. Shopping centres are very popular and often act as town centres, partly because of the cold weather. And while domestic retailers dominate the scene at present, the situation will change as international chains move in and boost demand further.

One trend that is common to the Nordic countries and the rest of Europe is growing urbanisation, with a marked demographic decline in some regions and an influx of people into the cities. ‘Demographics will play an important role when investing in real estate assets, due to significant shifts in regional demand and a concentration of economic production and wealth in some areas,’ said Cajias.

Broadband internet penetration is the highest in Europe, which will fuel ecommerce and have an impact on both the retail and the logistics markets.