Housing The turnaround in the rental market intensifies: “Large investors are ready and willing to buy hundreds and thousands of apartments”

World CBRE, the largest real estate consulting company, estimates in a recent report, Finland 2022, that transactions made by professional real estate investors will grow by ten per cent in Finland this year.

Last year, real estate investors investments rose 20 percent in the second year to 7.14 billion euros, CBRE estimates.

The driver of growth last year was the enthusiasm of international investors to buy rental housing in Finland.

This year, that enthusiasm seems to be growing even more.

“It’s huge activity and deals ”, CBRE Research Director Jussi Niemistö tells about the market situation.

According to him, it already seems that in the first half of 2022, investors’ home sales can be made in euros as much as in the whole of last year.

The increased valuation level of apartments is already attracting sellers, Niemistö says.

In Helsinki, the return target calculated for the capital of so-called prime properties of international real estate investors has decreased to less than 3%. In Turku and Tampere, it is less than 3.5 percent, Niemistö says.

According to Niemistö, this is a clear change of direction in the allocation of funds to large investors. While in 2014 almost no major investor invested in rental housing in Finland, now the share of international investors in the professional rental housing trade in Finland is already in the 35% range.

Niemistö says that international investors are approaching the Finnish rental housing market, ready for huge investments.

“It can be said that large investors are ready and willing to buy hundreds and thousands of homes.”

Investors enthusiasm for the purchase of rental housing is surprising in that at the same time in the metropolitan area there is twice the number of rental housing available compared to the time before the pandemic.

Rents have often been declining. Tenants have been able to afford to choose the best from the plentiful supply.

“Institutional investors are looking beyond this stage. They believe the situation will return to normal. It may be more difficult now, but in the medium and long term more people will move to the cities and the popularity of renting will increase all the time, ”explains Niemistö.

Read more: Foreign investors are now looking for apartments in Finland, according to the expert it may appear in rents in a surprising way

According to him, Europe is now seeing a similar development that took place in the United States as early as ten years ago.

The supply of rental housing is increasingly falling into the hands of large institutional investors.

“It’s changing the dynamics. One company can rent more than a thousand apartments under a certain brand. ”

CBRE: n The Finland 2022 review predicts that demand for modern offices will remain good and that the situation in retail properties will improve with the end of restrictions.

Growth in demand for industrial and logistics properties is forecast to remain strong, especially driven by growth in e-commerce.

In the Helsinki Metropolitan Area, trade in industrial and logistics properties is limited by the fact that there is little to sell.

Therefore, in logistics properties, trade is concentrated in frame municipalities.

According to Niemistö, domestic professional investors are largely interested in the same targets as foreign colleagues.

“Our investor survey says something similar: rental apartments, core offices and logistics properties are of interest.”

American CBRE is the world’s largest real estate advisor in terms of number of employees and market value.

It has more than one hundred thousand employees and more than 500 offices around the world. The market value is double that of the second in the industry, JLL (Jones Lang LaSalle).