As Europe continues its recovery from
COVID-19, nations across the continent are seeing a continued rebound in
consumer demand. Thanks to the ongoing recovery from the pandemic, Finland saw
healthy economic growth in 2Q2022. While quarter-over-quarter GDP growth was
only 0.3 percent, investment across sectors of commercial real estate grew,
totaling $8.99 billion in the first half of 2022.
According to Cushman & Wakefield,
demand for Class A office properties has remained strong as pandemic-related
sanctions were eased at the start of the year. Employers who are bringing
workers back to the office are looking for flexibility and amenities that are
primarily offered by the top assets in the sector. Class B properties,
meanwhile, face a dearth of interest and are disproportionately contributing to
the 11.5 percent vacancy rate when looking at office as a whole.
Retail, meanwhile, has faced differing
challenges depending on the area of the market. Big-box stores and food and
beverage spaces are bright spots, with demand for space remaining relatively
consistent. Global logistical challenges, thanks in part to the war in Ukraine,
have spelled trouble for high-end stores and fashion outlets. These assets have
also suffered due to uncertainty in international tourism as COVID-19 still
continues to complicate matters.
Industrial, as in the U.S., has performed
well throughout the pandemic, with prime rents topping $100 psf for the last
four quarters. Finland is also seeing an expedited shift to e-commerce in the
wake of COVID-19, which has boosted demand for light industrial, warehouse, and
logistics assets. Finnish exports also rebounded in 2Q2022 to grow by 6.16
percent QOQ, after contracting by 9.8 percent QOQ in 1Q2022.
Looking forward, Finland joining NATO,
along with Sweden, could make it easier for interested European investors to
enter the national market. Nordic countries as a whole expect capital
allocation to continue to be strong throughout 2022.
Data collected from reports by Cushman & Wakefield and CBRE.