RCA Insights

Nordic Commercial Property Markets Shine in 2021

By on November 9th, 2021

A version of this article first appeared in the latest edition of Europe Capital Trends, published Oct. 28. Clients of Real Capital Analytics <<click here>> to download the PDFs and data files for this edition.

Three of the Nordic markets have emerged in 2021 as outperformers compared to the rest of the European market, pushing the Nordic share of European commercial real estate deal volume to a record.

Transaction volumes in Sweden, Denmark and Norway for the first nine months of the year are higher than the same period a year ago and also higher in comparison with their five-year pre-pandemic averages; they are the only leading markets in Europe where this is the case. In Finland, activity jumped versus 2020 but fell short of its prior average. Consequently, the Nordics account for just over 15% of European transaction volume so far in 2021, a record share.

Given the nature of the pandemic and how governments restricted movement and imposed quarantines, the domestic and intra-regional bias of these markets has likely been of benefit. Previous analysis by Real Capital Analytics showed that markets with a heavy leaning towards overseas capital saw a greater withdrawal of capital flows and a slower recovery on average during the Covid crisis.

Some 80% of all acquisitions in these markets in 2021 have involved a buyer headquartered in the Nordic countries. With low rates pushing capital into real estate, investment by Nordic players at home and abroad is at a five-year high.

Sweden’s Heimstaden has emerged as a major player in the European apartment sector. The firm’s closed acquisitions in the Nordic region — primarily in Denmark — total more than €2.2 billion ($2.5 billion) so far in 2021. The investment manager deployed another €1.8 billion elsewhere in Europe, mostly Germany and Poland, and has another €9.1 billion pending through its acquisition of the Akelius portfolio of residential assets.

Blackstone is the only non-Nordic player to feature in the top 10 buyers list, as shown in the chart. The firm has spent just under €1 billion on Swedish industrial property in 2021, adding to a portfolio of European industrial assets that totals more than 1,900, according to Real Capital data.


© Real Capital Analytics

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Tom Leahy

Tom Leahy

Senior Director, EMEA Analytics

Tom Leahy joined RCA in 2014. In his role as Senior Director for the EMEA region, Tom is responsible for the development and expansion of the market analytics service for RCA’s European clients.

Prior to joining RCA, Tom was an Associate Director and then Head of Research at UK-based property consultancy, Lambert Smith Hampton. He started his career as an analyst at research consultancy Property Market Analysis (PMA).