Finland : Helsinki office market2015 overview
- Tenants have the upper hand as a result of high vacancy rates in Helsinki
Infrastructure projects within the Helsinki metropolitan area are shifting the focal points of residential and office area demand and changing the criteria for new construction locations.
This can already be seen near railway stations, where a significant number of new properties are being built. The Länsimetro extension, for example, is expected to improve the market position of Espoo office areas located near the stations.
The vacancy rate kept high levels
The Helsinki metropolitan area market is still plagued by high vacancy rates and the amount of available offices will rise as space-efficiency becomes more popular. Office space per person is over 20 m² on average but in many multispace offices this ratio is closer to 10 m² per person. The rising vacancy rate triggered falling rents in certain areas. Conversely, office rents continued to rise in the Helsinki city centre.
The investment market growth exceeded expectations in 2015
In 2015, the volume of large transactions came close to the record years of 2006- 2007, when the real estate investment volume reached over €5 billion (residential included).
In 2012-2013, the investment volume stayed around €2.0 to €2.5 billion and in 2014 it reached over €4 billion.
The lack of secured investment properties and low yield levels in Europe's main market areas continue to drive investors to seek for higher yields and thus spread risk in Scandinavia and Finland. On the other hand, capital from the domestic pension funds was passive on the buyer side.