Finland Property Deals at €1.7B in '09

HELSINKI-The volume of major transactions in the Finnish property market last year reached €1.7 billion, with some €590 million dealt in 4Q09, the largest quarterly volume since 3Q08, according to Helsinki-based research group KTI.

Foreign investors accounted for 17% of all deals, a significant fall compared to 44% in 2008 and 59% share in 2007. Retail properties were again the most popular property type, accounting for more than 30% of volume, followed by industrial properties and office.

On the supply side in the Helsinki metropolitan area, only some 60,000 square meters of new office space was under construction at the start of 2010, with another 80,000 sq.m. under redevelopment. Office building has dropped significantly over the last year: after more than 100,000 square meters new space came onto the market, only a few new projects have been started. This compares with the beginning of 2009 when more than 150,000 square meters of new office was under construction and some 40,000 square meters in major redevelopment.

In the residential market, Statistics Finland reported that the prices of existing apartments and terraced houses continued to increase, rising 2.8% in 4Q09 over 3Q09. In Greater Helsinki, this was 3.4%, against 2.2% elsewhere in the country. However, residential prices in Helsinki soared by 11.6% over the year, and rose by well over 10% in other cities such as Espoo and Turku.