JLL Nordic Outlook Report Autumn 2021
In this edition of the JLL Nordic Outlook, we cover the Nordic office, logistics, retail and residential markets and review developments in investment and capital markets. The theme for this report is the increasingly important topic of Environmental, Social and Governance (ESG) investment.
The Nordic equity markets, bond markets and real estate markets have continued to rebound over the past 12 months, strengthened by the economic rebound and the stabilization of interest rates on attractive low levels, despite pockets of higher inflation. Listed Real Estate companies in the Nordics are trading, on average, on record high premiums to net asset value (NAV) and asset values, owing to the attractive return fundamentals. Mergers and acquisitions (M&A) have supported the transaction market with a property value of more than SEK 60 billion in Sweden during the first half of 2021 and additional pending announced transactions, worth more than SEK 40 billion, for the second half of 2021. Low-risk logistics, residential and community service properties remain in favour, and office transactions have rebounded strongly when adding mergers and buy outs to the investment volume, reaching prices that represent more than 10 percent of portfolio premium to asset values.
In this edition of the JLL Nordic Outlook, we cover the Nordic office, logistics, retail and residential markets and review developments in investment and capital markets. The theme for this report is the increasingly important topic of Environmental, Social and Governance (ESG) investment: confirming the growing demand for sustainable space among tenants and the strong focus among investors to meet stakeholder demand while both reducing risks and potentially enhancing the return outlook of their portfolios.
Despite broad vaccine rollout, ongoing COVID-19 restrictions are keeping the hospitality and retail sector under some pressure and have delayed the return to the office. However, declining bond market spreads and improving availability for financing, in combination with a solid economic rebound, continues to fuel demand for real estate assets. Moving forward, we see potential for a record high level transaction market for 2021 on a broad basis, with further potential for lower yield requirement backed by rental growth and an attractive yield gap for long-term investors.
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