Nordics to retain economic shine in 2012-13

Nordic markets feature high on the radars of property investors thanks to their relatively strong economic performance and liquidity.

The region's property markets, however, are dominated by local institutional equity and cross-border activity in Nordic real estate is down well below the 50% mark seen at the peak of the market. Nevertheless, the region ticks all the boxes in terms of economic attractiveness, PropertyEU's Nordic Investment Briefing heard recently.

Stockholm and Oslo feature in the ranking of the top 10 most active investment markets in 2011 and the Swedish capital is placed eighth out of 10 in the list of most attractive markets for property investment this year.

The Investment Briefing was hosted by CBRE in London on 29 March.

The Nordic countries are forecast to retain their position as relatively strong economic performers this year and in 2013 compared to other markets in Europe.

Norway, Peter Damesick, EMEA Chief Economist at CBRE noted, suffered a relatively mild downturn compared to most other western European economies and its recovery has pushed GDP above the pre-crisis level.

Damesick gave the keynote presentation at PropertyEU's Nordic Investment Briefing, hosted by CBRE in London, recently.

Sweden suffered more of a contraction, but its recovery has been one of the strongest in Europe. Finland - a more narrowly based economy - suffered a deeper contraction but has also seen a strong rebound.

Denmark, Damesick said, remains the weaker performer. He highlighted 'fiscal rectitude' in terms of keeping tight control on debt to GDP ratios as an important feature of the Nordic economies.

While Greece has a ratio of 160%, Norway is at 40-60% and Sweden is around zero. The Nordics - three of which are outside the eurozone - has, as a result, seen bond yields retaining a tight spread relative to the German bunt.

But the Nordic currencies have strengthened against the euro which could be seen as a negative development by some euro-denominated investors.

Click on the link below for the PDF of our summary of the Nordic Investment Briefing which is published in the April edition of PropertyEU.