Nordicum - Real Estate Annual Finland 2020 | Page 55

The opening of Mall of Tripla.
Kokko points out that the question
of “second city” liquidity is always in the
minds of international investors venturing
inland into cities such as Tampere, Turku
and Oulu.
“Quality real estate in each of these
three cities will most likely retain their
liquidity, even if there is some turbulence
along the way.”
Shopping Center Survival
Despite the challenging outlook of retail
trade and shopping center markets, prop-
erty market professionals’ expectations for
retail rents are now more positive than in
the spring. According to KTI Finland, the
increasing shopping center supply in the
Helsinki metropolitan area, is, however,
increasing the uncertainty in the market, and
pressuring the outlook for rents and occu-
pancy rates.
Kokko agrees that shopping centers
are a bit of puzzle: with the rise of e-com-
merce, the “death of the shopping center”
has been making headlines for a while now,
but Finland seems to be going against the
trend – Mall of Tripla and Ainoa (comple-
tion of Phase III) being the latest additions
to the roster in the metropolitan area.
“It appears that shopping centers with
solid locations will do just fine, even if
they have to adjust their offering to cope
with the changing customer needs,” Kokko
says, pointing out that it is now the “holis-
tic experience” that the consumer is after.
Building sprawling shopping complexes in
a field somewhere, however, seems some-
thing that is best left to the previous century.
Rental Records
Similarly, plenty of questions abound in res-
idential rents which continue to increase in
all major cities despite the rapid increase
in supply. In 2020, a record number of
new rental apartments will be completed
in the Helsinki metropolitan area. Strong
rental demand supports the attractiveness
of ­residential properties in the investment
market.
Kokko remarks that the growing pop-
ularity of rental reflects a lifestyle choice:
young people are not as keen to own their
homes as previous generations.
“There must be a lot of different rea-
sons behind this trend, but, for all intents
and purposes, it seems that rental living is
becoming more popular now.”
International Edge
The Finnish real estate market has had a
rather international flavor for a long time,
and the year 2019 is no different in this
regard. Out of all transactions this year, the
share of international investors was about
45 %. Demand has ranged from offices and
apartments to societal real estate which seem
to be gaining in popularity.
For some foreign investors, Finland is
an old hat, while for more distant visitors the
country is a fresh frontier: the emergence of
South Koreans, for instance, into the scene
has been widely noted.
“Korean investors have landed in
Europe in a big way and they are, for the
most part, seeking cashflow that is both
long-term and stable,” he assesses.
Recipe for Success
Looking into the future – 2020 and beyond
– Kokko believes that the winners and los-
ers of the real estate race will be determined
by a few key things.
“First of all, there is the sustainability
angle. Climate and environmental concerns are
now important to everybody in this business,
and new technology will hopefully help to cre-
ate smarter and more environmentally-friendly
buildings in the near future,” he starts off.
The second issue is quality: there is a
lot of worn-down supply in Helsinki offices,
for instance, that will continue to struggle.
“Modern, flexible premises is what the occu-
piers and investors want now and this is not
going to change in the future.”
Third issue concerns connectivity:
“middle of nowhere” properties have never
been very popular, but now they are clearly
in the bottom pariah class.
“Solid public transportation and acces-
sibility across the board is required in most
cases.” l
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