Nordic Credit Rating (NCR) said today that the strength of the Nordic property market was visible in the reported figures of regional property managers following a strong trend of consolidation in 2021 which pushed transaction volumes far beyond previous record levels. On average, property values in a sample of 43 Nordic property managers increased sharply by 10.0% over the year, compared with 3.3% in 2020.
The most pronounced value changes were recorded in the community service property segment where the managers in our sample recorded rises averaging 17.3%. Value gains for managers of industrial and logistics properties were also significant, averaging 14.1% over the year.
"We view the significant value gains as illustrative of favourable market conditions for Nordic real estate companies in 2021," said NCR credit analyst Marcus Gustavsson. "While value gains have led to improved loan-to-value ratios in the sector, we view overall financial risk as broadly unchanged," he added.
Looking ahead, NCR believes that Russia's invasion of Ukraine has increased uncertainty in the sector, and will likely result in lower transaction volumes amid disrupted capital markets and expectations of higher financing costs.
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Mille Fjeldstad, analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com