#exporeal Nordic cities benefit from urbanisation trend

The four countries that make up the Nordic region - Sweden, Norway, Denmark and Finland - are attracting record levels of investor interest due to increasing urbanisation, delegates heard at PropertyEU's Nordics Investment Briefing which was held at Expo Real in Munich.

Interest is mainly focused on the four capital cities because ‘nowhere is the urbanisation trend more apparent than in the Nordics,’ said Marcelo Cajias, senior manager of research at Patrizia Immobilien. ‘Demographic concentration in the cities brings investment opportunities, and transaction volumes are reaching record levels.’

In the Nordics 25% of the population lives in the four big cities, compared to 9% in Germany, which means demand for housing is high and going to increase further. That is an obvious area to invest in, said Rikke Lykke, managing director of Patrizia Nordics: ‘There is a lack of residential in all big cities so it makes sense to go there, as there are no vacancies and plenty of tenants. We are particularly positive on Copenhagen and Helsinki.’

The Finnish capital is one of the fastest-growing cities in Europe; its population is set to rise from 600,000 to 860,000 by 2050 and this is leading to a construction boom.

‘Another interesting factor for investors in Helsinki is the liberalisation of rents, which makes the case for residential even more compelling,’ said Mikkel Bulow-Lehnsby, CEO of Nordic Real Estate Partners. In the Danish capital government institutions are moving out of the city and 80,000 m2 of office space will become available in the city centre, Likke pointed out: ‘There will be a lot of conversion to residential.’

As for Sweden, the biggest of the four markets, transactions are set to reach an all-time high of €15 bn this year, said Daniel Andersson, senior director of Sweden capital markets at CBRE: ‘Lack of product is the only thing that is holding us back.’