The Nordic countries offer attractive investment opportunities based on political stability, cheap financing and efficient case processing in the public-sector. This is particularly the case in Denmark, however, the country's proerty sector suffers from a lack of transparency regarding prices, returns and rent levels. This makes it difficult to benchmark investments against the market.
Henrik Steenstrup, Deputy Chief Executive of Nordea Ejendomme, the real estate arm of the Nordic financial group, made this assessment on Wednesday at a panel debate at this year's real estate convention Mipim in Cannes. The discussion was on why the Nordics generally offer more to investors than other regions are able to.
"The Swedish market is by far the most transparent in Scandinavia — ahead of both Denmark and Norway. One cause of the lacking transparency in Denmark is that properties have traditionally been owed by pension funds and other funds, from which it is difficult to get data. They don't want to release their data," said Henrik Steenstrup at the event hosted by the asset manager Catella. The event also included presentations by the Swedish real estate investment company Hemsö Fastigheter and the Finnish pension fund Varma
According to Henrik Steenstrup, investors are unnecessarily skeptical as a consequence of insufficient data on prices and required rates of return — they may even stay away and invest their capital elsewhere.
Gustav Björkman, Hemsö Fastigheter's Head of Investment agrees that real estate prices are more transparent in Sweden. He also thinks there is an increasing tendency for properties to be sold as corporate sales, where it is the equities or company shares that change owners, not the properties, which the companies retain.
Gustav Björkman predicts a decline in that trend. According to him, there is a political awareness that this shortcut around public records is being used too often, and this may result in tighter regulation.
Nordea Ejendomme has, according to Henrik Steenstrup, around EUR 3.4 billion in Danish assets, which are invested on behalf of Nordea's insurance branch Nordea Liv & Pension as well as other financial investors.
This article was published by AMWatch's sister sites FinansWatch and EjendomsWatch.
English edit: Daniel Frank Christensen