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Finland's Real Estate Market Recovery in 2025

The Finnish real estate market is on a noticeable upward trajectory in 2025, reflecting an optimistic turn after years of uncertainty. Transaction volumes are climbing, liquidity is strengthening, and there is a notable surge in interest from foreign investors. This shift suggests a regained confidence in the market, indicating that activity levels are on track to surpass last year's figures, which sets a solid groundwork for future growth in the sector.

The momentum began in 2024, as recovery was evident across Europe and the Nordics, and Finland is now distinctly benefiting from this trend. Analysts predict that the residential segment will emerge as a crucial driver, contributing significantly as the year unfolds. Despite persisting high construction costs—a consequence of economic impacts stemming from geopolitical tensions—the initiation of new projects is cautiously advancing. Growth areas characterized by net population inflows are serving as a stable demand foundation, invigorating construction activity, and reinforcing the alignments between supply and demand in residential real estate.

On the commercial front, activity is picking up, but investors are becoming increasingly selective, channeling their capital toward high-quality assets that promise stability. Properties with long-term leases are especially appealing as they offer a sense of security for investors looking to navigate the fluctuating market landscape.

International investors' interest in Finland is noticeably heightened, as the country positions itself as a desirable destination for both real estate and infrastructure investment opportunities. Factors such as improved market conditions and relaxed lending criteria are facilitating heightened investment activity among existing stakeholders and newcomers alike, as they explore assets through revised or entirely new investment strategies.

The increased interest from core investors highlights strong confidence in Finland’s stable operating environment. A varied real estate landscape allows for diversification, presenting a wealth of options for different investment strategies, making Finland an attractive prospect for a diverse array of investors.

Looking long-term, the fundamentals of Finland's real estate market are solid, with yields remaining competitive in comparison to other Nordic nations. Currently, there is a significant disparity in yields for prime office spaces relative to Sweden, a situation that tends to balance out over time as financing conditions align across markets.

Strengthening lease fundamentals in prime assets across Finland are expected to narrow this yield differential, offering lucrative opportunities for several investment approaches, especially for those employing yield shift strategies, as Finnish prime office yields inch closer to those of other regional markets. In contrast, the retail sector is currently seeing balanced pricing without substantial yield differentials, indicating a more stable market environment.

The latter half of 2025 promises enticing opportunities across various real estate investment strategies. As polarization in the market continues, the emphasis on a strategic approach is paramount—investing in burgeoning centers and well-managed properties can provide both stability and returns, whereas peripheral areas hold greater risks. Investors with a discerning eye for prime locations and top-quality assets stand to gain the most from the ongoing market recovery.

For more insights and detailed analysis, reach out to Kasper Joukama, Transactions Manager at Trevian Asset Management. His extensive expertise can provide deeper understanding into navigating this revitalizing landscape effectively.

Contact: Kasper Joukama
Transactions Manager, Trevian Asset Management
Phone: +358 40 076 4547
Email: [email protected]