#MIPIM Nordic real estate shares enjoy 'hot' climate, Pangea finds

Nordic real estate is hot among international investors, as shown by increasing activity in the listed sector, according to Pangea Property Partners.

Pangea has tracked the increased demand via its PREX Nordic property share index.

The index has risen by 23% so far in 2015 and 54% since the beginning of 2014. Both figures exclude dividends. The index is now at an all-time high and the rise has been significantly stronger than that of the overall stock market.

In the short term Nordic real estate shares focusing on the retail sector have performed best, rising by 27% so far in 2015. Shares focusing on the residential sector have seen the weakest performance, but even these have increased by 15%.

The PREX indices are developed by Pangea, an independent Nordic consulting firm focused on real estate with approximately 30 employees and offices in Stockholm and Oslo.

´There is tremendous interest in Nordic real estate, not least from international investors. We have already witnessed this in the transaction market, and now we also see it clearly in the stock market,´ said Bård Bjølgerud, CEO of Pangea Property Partners.

Overall there has been a positive trend European real estate shares this year. The GPR 250 PSI Europe property index is up 16% by the end of February, but the uptrend in the Nordic countries has been even stronger.

'There are several reasons why Nordic real estate shares have risen this much. The lower interest rates have certainly contributed, but investors also have a positive long-term view of the Nordics as a region. In addition, weaker currencies make price levels more attractive,' said Mikael Söderlundh, head of research and partner at Pangea.

Transaction volumes in the Nordic region reached record levels in 2014. Properties worth almost €30 billion were traded, matching previous peaks before the financial crisis of 2008, according to Pangea.

Pangea is attending MIPIM in Cannes, and Bjølgerud has a busy calendar of meetings. 'A lot of people want to discuss real estate investments in the Nordic region. Last year was very active and we are seeing the elevated activity level continuing into 2015,' said Bjølgerud.

Pangea completed close to 60 transactions in 2014 with an underlying property value of €2.9 bn.

Investment Locations
For more on the top cities in Europe, see PropertyEU's new Investment Locations website