Nordic Investor Confidence Index Q3 2023
Challenging market conditions ...influence investment objectives across the Nordics INVESTMENT OBJECTIVE
TRANSACTION VOLUMES (EUR Billion)
Sweden
Nordic
90 Q3 2023
50%
Q1 2023
Norway Finland
14%
64%
28%
8%
Q3 2022
52%
34%
14%
Q3 2023
53%
34%
13%
Q1 2023
74%
Q3 2022
Q3 2023
21%
58%
27%
45%
Q1 2023 47%
Q3 2023
48%
15%
Q1 2023
7% 34%
8%
28%
64%
24%
45%
70
60
50
8%
45%
24%
80
5%
48% 58%
Q3 2022
Q3 2022
Denmark
36%
38%
30 12% 17%
20
Q3 2023
49%
42%
9%
Q1 2023
50%
39%
11%
Q3 2022
51%
32%
40
10
17% 0
Increase: more acquisition than disposal
Stable: as much disposal as acquisition
Decrease: more disposal than acquisition Cushman & Wakefield – Nordic Investor Confidence Index
Denmark
Finland 2019
Norway 2020
2021
Sweden 2022
H1 2023
Nordic
Expectation of stable occupier demand for logistics assets … with retail demand expected to deteriorate
54%
Norway
Q3 2022
Finland
Q3 2022
Q3 2023
9%
29%
63%
19%
11%
28% 67%
32%
12%
Q3 2023 6%
48%
24%
52%
Q1 2023
8%
Q3 2022
10%
66%
Improve
Show little or no change
24%
60%
32% 24% Worsen
Cushman & Wakefield – Nordic Investor Confidence Index
35%
Q3 2023
60%
24%
Q1 2023
76%
21%
79%
19%
81%
Q3 2023
28%
Q1 2023
20%
72% 79%
8%
Q3 2023
49%
32% 67% 48%
9%
Q1 2023 6% Q3 2022
43%
68%
Q1 2023
Q3 2023
Nordic
Q3 2022
Q3 2022
36%
69%
65%
Q3 2022
14%
58%
29%
33%
Q3 2022
34%
67%
Q1 2023 Q3 2022
Denmark
66%
Q3 2023 Q1 2023
46%
Q1 2023
Sweden
Q1 2023
51%
67%
Norway
47%
31%
10%
Improve
47% 36% 41% Show little or no changes
29%
Finland
Q3 2023
29%
Q3 2023
44% 59% 49% Worsen
Q3 2023
15%
Q1 2023
13%
Q3 2022
69%
16%
66%
22%
21%
60%
Q3 2023
19%
80%
17%
Q1 2023
13%
57%
30%
Q3 2022
15%
58%
27%
Q3 2023
20%
Q1 2023
62%
10%
18%
67%
Q3 2022
20%
Q3 2023
18%
24% 69%
59%
Q1 2023 Q3 2022
48%
Denmark
63%
Nordic
8%
35%
Sweden
Q3 2022
56%
Norway
9%
43%
Finland
Q1 2023
52%
Denmark
Nordic Sweden
Q3 2023 5%
LOGISTICS / INDUSTRIAL
RETAIL
OFFICE
10%
23%
89% 23%
11%
59%
18%
Q3 2023
30%
63%
7%
Q1 2023
31%
59%
11%
Q3 2022
35%
Improve
55%
Show little or no changes
10% Worsen
Strong rental growth in offices
… across the Nordics region
PRIME OFFICE RENT GROWTH (INDEX 2010=100) 240
220
200
180
160
140
120
100 2010
2011
2012
2013
2014
Denmark
2015
2016
2017
Finland
2018
Norway
2019
2020
2021
Sweden
Prime Office Rent Growth (Index 2010=100), as of Q3 2023 Denmark
Finland
Norway
Sweden
119
152
178
220
Cushman & Wakefield – Nordic Investor Confidence Index
2022
2023
Yields expected to decompress across all sectors… … with office assets believed to be most affected
Q1 2023
15%
82%
Q3 2022
11%
82%
84%
Q1 2023
28%
63%
Norway
Q3 2023 10%
72%
Q3 2023
26%
68%
Q1 2023
38%
56%
Q3 2022
18%
77%
Q3 2023
16% 12%
72%
Q1 2023 11% 17%
72%
79%
Q3 2022 11% 16%
73%
Q3 2023
81%
Q3 2023
70%
74%
Q1 2023
Q1 2023 9% 17%
93%
Q3 2023 13%
35%
Q1 2023 12% 25% Q3 2022 Decline
18%
52% 63%
36%
47%
Remain stable
Increase
Cushman & Wakefield – Nordic Investor Confidence Index
Q3 2022
30% 41% 19%
Q3 2023 13%
55%
33%
54%
Q1 2023
20% 18%
62%
Q3 2022
24%
Decline
Remain stable
Q3 2022 10% 19%
Q3 2023
49% Increase
72%
45%
Q1 2023
55%
48%
48%
12%
83%
71%
Q1 2023
63%
29%
Q3 2023
79%
45%
Q1 2023 9% 18%
73%
Q3 2022
80%
Q3 2023 14% Q1 2023 9% Q3 2022 Decline
56% 42%
21%
34%
59%
Q1 2023
17%
75%
Q3 2022
11%
80%
Q3 2023 Q1 2023
28%
65%
9%
83% 89%
Q3 2023 Q1 2023
No Data
Q3 2022
55%
12%
Q3 2023
Q3 2022
Q3 2023 10% 19%
Q3 2022 10%11%
81%
27%
56%
Q3 2022
Q3 2022 13%8%
19%
37%
Nordic
77%
19%
Q1 2023
Sweden
18%
Q3 2022
51%
Norway
Q3 2023
60%
44%
Finland
77%
30%
Q3 2023
Q3 2023
33%
67%
Q1 2023
21%
75%
Q3 2022 30% 49%
45%
34%
Remain stable
Increase
Denmark
15%
Q1 2023
Nordic
Q3 2022
66%
Sweden
73%
25%
Norway
20%
Q3 2023
Finland
Q1 2023
RESIDENTIAL
LOGISTICS / INDUSTRIAL
Denmark
74%
Nordic
19%
Sweden
Q3 2023
Q3 2022
Denmark
RETAIL
Denmark
Finland
Norway
Sweden
Nordic
OFFICE
11%
Q3 2023 13%
85%
46%
41%
Q1 2023 12%
30%
58%
Q3 2022
24%
59%
Decline
17%
Remain stable
Increase
Prime office yields continue decompressing in Q3 … with similar levels across all the Nordic markets
PRIME OFFICE YIELD (Net Initial) 7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00% 2010 2011 2012
2013
2014 2015
Denmark
2016
Finland
2017 2018
Norway
2019
2020 2021
2022
Sweden
Denmark
Finland
Norway
Sweden
4.25%
4.25%
4.25%
3.85%
Cushman & Wakefield – Nordic Investor Confidence Index
2023
Worsening financing conditions universally expected … however investors increasingly expecting stable conditions FINLAND
DENMARK
55%
NORWAY
SWEDEN
47%
51%
NORDIC
48% 55%
61%
64%
64%
67%
67%
74%
75%
56%
73%
75%
37% 37%
45%
40% 28%
Q3 2022
9%
5% Q3 2023
24%
23% 16%
13% Q1 2023
32% 23%
25%
38%
31%
29%
8%
35%
30%
Q3 2022
Q1 2023
4%
3%
5%
Q3 2023
Q3 2022
Q1 2023
Improved conditions Cushman & Wakefield – Nordic Investor Confidence Index
2% Q3 2023
Unchanged conditions
7%
2% Q3 2022 Worsened conditions
Q1 2023
Q3 2023
10% 3% Q3 2022
Q1 2023
7% Q3 2023
Overall value of Nordic portfolios expected to worsen … with stable values expected in Denmark
Nordic
PORTFOLIO DEVELOPMENT Q3 2023
5%
Q1 2023
5%
39%
Sweden Norway
5%
50% 7%
36%
Q3 2023 Q1 2023
Q1 2023
6%
60%
37%
4%
Q3 2022
46%
77% 34%
Q3 2023
17%
64%
19%
Q3 2022
63%
42%
58%
36%
60%
28%
25%
72% Development of initial market yields
Q3 2023
Q3 2022
41%
33%
4%
Q1 2023
52% 56%
Q3 2023
Q1 2023
60%
46%
Q3 2022
Finland
56%
45%
Q3 2022 4%
Denmark
INFLUENCING FACTORS
17% 9%
43%
39%
43%
15%
49% 48%
Improving
Unchanged
Cushman & Wakefield – Nordic Investor Confidence Index
Rental development 38%
Worsening
Financing conditions
Vacancy development Development of operating and maintenance cost
Logistics segment expected to perform best … in the coming six months
SEGMENT EXPECTED TO PERFORM BEST IN THE COMING SIX MONTHS 3% 8% 24%
12%
15% 21%
16%
Logistics
Cushman & Wakefield – Nordic Investor Confidence Index
Industrial
Residential
Office
Hotels
Public properties
Retail
Environmental aspects remain of high importance to investors … despite a more challenging market WILLINGESS TO PAY A PREMIUM FOR HIGH SUSTAINABILITY
97%
Q1 2023
98%
Q3 2022
96%
Q3 2023
98%
Q1 2023
100%
Q3 2022
98%
Q3 2023
99%
Q1 2023
95%
5%
Q3 2022
95%
5%
Q3 2023
96%
Q1 2023
100%
Q3 2022
97%
Q3 2023
92%
8%
Q1 2023
94%
6%
Q3 2022
93% Yes
No
Cushman & Wakefield – Nordic Investor Confidence Index
Finland
Norway
Sweden
Nordic
Q3 2023
7%
Denmark
Denmark
Finland
Norway
Sweden
Nordic
DO INVESTORS CONSIDER SUSTAINABILITY CLASSIFICATIONS?
DO INVESTORS CONSIDER SUSTAINABILITY CLASSIFICATIONS?
Q3 2023
72%
28%
Q1 2023
70%
30%
Q3 2022
70%
30%
Q3 2023
72%
28%
Q1 2023
74%
26%
Q3 2022
78%
22%
Q3 2023
3% 6%
36%
96%
Q1 2023
71%
29%
Q3 2022
72%
28%
Q3 2023
64%
36%
Q1 2023
68%
32%
Q3 2022
69%
31%
54%
Yes, it is part of our formalized investor prerequisite Q3 2023
55%
45%
Q1 2023
60%
40%
Q3 2022
54% Yes
46% No
Yes, but we do not have a formal approach to it
Yes, but not of importance No
CONTACT US Sweden Michal Toporowski Senior Research Analyst michal.toporowski@cushwake.com +46 73 052 65 56
Denmark Anne Sofie Ravn Christensen Head of Research asr@cw-red.dk +45 53 53 50 77
Norway Hans Petter Skogstad Head of Research / COO hps@cwrealkapital.com +47 93 86 66 85
Finland Ville Suominen Partner, Valuation & Advisory ville.suominen@cushwake.fi +358 44 568 4300 Cushman & Wakefield – Nordic Investor Confidence Index