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Nordic commercial real estate market headed for a new all-time high

Max Barclay, Head of Newsec Advisory

The macroeconomy is weakening but the outlook for commercial real estate in the Nordics remains strong. According to new figures from Newsec, the leading Nordic property advisor, 2021 will be the strongest transaction year in the coming five-year period and probably this decade. In 2020, Newsec forecasts a Nordic transaction volume of around EUR 45 billion followed by a new all-time high of EUR 50 billion in 2021.

The transaction volume in the Nordic region has doubled from EUR 20 billion to EUR 40 billion over the last ten years and the market continues to attract international investors, with more international capital flowing into the region. Last year foreign investors accounted for 31 percent of the total transaction volume in the Nordics with the largest non-Nordic investors being German, American and British.

“The Nordic property market has seen a sharp increase in both capacity and activity in recent years and is now one of the most liquid and active markets, not only in Europe but the entire world. Although the macroeconomic outlook is weakening, we see a continued favourable climate for real estate investments in the Nordics with new record years ahead of us”, said Max Barclay, Head of Newsec Advisory.

Rising investment allocation to real estate
The low-interest environment combined with a volatile stock-exchange drives the investment allocation to real estate, which is becoming an even more popular investment class. In fact, it has been rising steadily in popularity among all kinds of investors. Among the thirty largest pension funds in the Nordics and Baltics, there has been an increase of almost 100 percent in investment allocation to real estate over the past 15 years, with an increase from an average of 5.8 percent in 2005 to 10.9 percent in 2019. In Sweden, the allocation has risen by as much as 165 percent.

“We see that total returns will be lower than in previous years, but property will still yield more than other asset classes. The record volume in the Nordics is driven by factors such as the persistent low interest rate climate, the increasing amount of capital looking to property to secure high returns, and the likelihood of major M&A transactions”, said Max Barclay, Head of Newsec Advisory.

Breakdown by market
When breaking down the Nordic volume in 2020 and 2021, the other countries will not have quite as record-breaking years as Sweden, which is predicted to reach an impressive all-time high of EUR 21.5 billion in 2021, preceded by EUR 20 billion in 2020. In Norway, volumes of between EUR 9 and EUR 10 billion are forecast, falling short of the record volume seen in 2015, but with strong potential to constitute the second strongest year to date for the market. In Denmark, a volume of around EUR 9 billion is expected in both years, below record levels, but still a strong performance. Finland will produce a volume of EUR 6 billion in both years, in line with the historical average, while the Baltic region will outperform the historical average slightly, with volumes of around EUR 1 billion.

Access the full report at

About the report
The Newsec Property Outlook has been published twice a year since 2001. The free report describes and forecasts the real estate market in Northern Europe, with a focus on the Nordic and Baltic countries. The report has come to be a handy tool for investors, property owners and tenants.

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Annika Wahlund Head of Press, Newsec Advisory
Max Barclay Head of Newsec Advisory