Aberdeen expects the Nordic property markets to outperform the rest of Europe in 2007 despite predicting a deceleration in total returns in the region as capital values weaken.
The Nordic property markets have been recovering strongly, with rental levels increasing and vacancies generally decreasing across most cities and sectors. The recovery is underpinned by strong fundamentals, with the Nordic region expected to continue outperforming Core Europe in terms of economic growth. Real GDP is predicted to have reached 3.9% in 2006, significantly higher than the 2.7% forecast for the Euro Zone as a whole.
Aberdeen estimates that total unleveraged property returns in 2006 will have amounted to 15.1% in the Nordic region, which would represent an increase of 210 basis points compared to 2005.
Aberdeen’s 2007 forecast for total Nordic property returns of 10.3% compares favorably to the 8.1% predicted for Europe as a whole. Aberdeen is expecting office returns in 2007 to be weaker in all four countries compared to the record expected returns of 2006 with the best performance predicted for Norway at 14.5%. The office sector is expected to do well due to a continued improvement in market fundamentals and somewhat stronger growth in services employment. With the exception of Sweden, we are forecasting that offices will outperform retail in the Nordic region this year.
Jon Lekander, Head of Investment Strategy at Aberdeen Property Investors commented;
“The Nordic Region remains an interesting market for international investors looking for strong growth and regional diversity. All four countries are performing well, but Norway stands out as the best single market for 2006.”
Alessandro Bronda, Head of Research at Aberdeen Property Investors commented;
“The Nordic Region’s strong economic growth continues to create a healthy demand for property investment. We predict investment volumes in commercial real estate are likely to have reached a record high in 2006 and expect them to remain at a high level through 2007.”
For more information, please contact:
Jon Lekander, Head of Investment Strategy, Aberdeen Property Investors Tel: +46 8 412 80 77, +46 70 211 80 77,
Jon.Lekander@aberdeenpropertyinvestors.com
Alessandro Bronda, Head of Research, Aberdeen Property Investors Tel: +32 476 349 279
Alessandro.Bronda@aberdeenpropertyinvestors.com
Charlotte Barker / Tom Siveyer, Maitland Tel: +44 207 379 5151
About Aberdeen Property Investors
Aberdeen Property Investors is the specialised property division of Aberdeen Asset Management plc, a global investment management group listed on the London Stock Exchange and managing over EUR 100 billion of assets.
Aberdeen Property Investors manages some EUR 10 billion in property investments through property funds and management mandates on behalf of its institutional client base. The division has some 500 employees at offices in ten European countries.
Aberdeen was named the leading Property Investment Manager; Globally, in Western Europe and in the Nordic & Baltic regions in the Euromoney Awards 2006 for Excellence in Real Estate.
Issued and approved by Aberdeen Asset Managers Limited, on behalf of Aberdeen Property Investors, authorised and regulated by the Financial Services Authority.