ROI & IRR- Denmark, Finland & Sweden

Goals

To locate the ROI and IRR for Denmark, Finland, and Sweden for construction, and ideally different types of construction.

Early Findings

Denmark

Although we did not locate information for Denmark as a whole, we did find information for Copenhagen.
  • In Copenhagen, according to the Colliers International property price index, Greater Copenhagen commercial properties yielded a total average return of 8.8% in 2017, on a par with the long-term average, resulting from slight compression of income return to around 4.8% and capital growth of 4.0%.
  • Total return on commercial property investments in 2018 is estimated at around 6-7%.

Finland

  • According to the KTI Index, the total return on the Finnish property market remained stable at 6.6% in 2018 (6.6% in 2017), consisting of a capital growth of 1.3% and a net income of 5.3%.
  • In the KTI Index, capital growth for retail properties has been negative every year since 2011, and in 2018, the total return on all retail properties decreased to 2.1%. Shopping centers’ investment performance was even weaker than that of other retail properties. In 2018, capital growth for shopping centers turned negative also in the Helsinki metropolitan area.
  • The Finnish industrial / warehouse property sector produced a total return of 7% in 2018 (5.4% in 2017). Net income remained healthy, but capital values continued to decrease for the 11th consecutive year.
  • According to the KTI Index, hotel properties continued their strong performance and delivered a total return of 8.4% in 2018 (8.7% in 2017).

Results of this Hour of Research

  • We were unable to break down the rates of return by commercial, residential, affordable housing, etc, but we were able to provide several data points that give a picture of the market.

Proposed next steps:

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