With summer upon us, many are preparing to take a well-deserved time off to spend with family and friends. Before doing so, I would like to share my observations on our performance during the first six months of 2025.

The Nordic commercial real estate market experienced a dynamic first half of 2025, characterised by both expansionary trends and sector-specific headwinds.

Key Trends:

Healthy Demand for Logistics and Data Centres
Expansion of E-commerce and digital transformation fuelled robust demand for logistics and data centre facilities, resulting in strong investment volumes in these areas.

Mixed Performance in Office Space
While prime office space in major Nordic cities remained resilient, older and less adaptable assets faced higher vacancy rates. This disparity suggests a growing preference among corporates for flexible and sustainable office solutions. 

Sustainability Still a Key Driver
Green certification and energy efficiency have emerged as critical determinant in attracting both tenants and investors. Assets with robust sustainability profiles have demonstrated better market performance relative to their less sustainable counterparts. 

Investor Sentiment is Positive
With expectations of portfolio value-appreciation over the next 6 months. This is further supported by the perceived stability of prime yields, sustained occupier demand and improved financing conditions.

Sector Performance:

Office
Demand for flexible workspaces and co-working facilities continued an upward trajectory. Prime, centrally located office properties are thriving, potentially driven by the adoption of hybrid work models which has seemingly revived demand for modern, centrally located offices. For instance, in Helsinki, the relocation of businesses to central districts has resulted in a 14% YoY increase in prime rental rates.

Living 
Following its position as the pre-eminent asset class throughout 2024, the Living sector was still able to sustain healthy investor demand. Beyond traditional multifamily housing, investment mandates are broadening, with a notable expansion in the investor base targeting Purpose-Built Student Accommodation (PBSA) and micro living.

Retail
Retail assets faced ongoing headwinds due to changing consumer behaviour and the growth of online shopping. Conversely, mixed-use developments integrating retail, residential, and leisure components demonstrated resilient demand. 

Industrial and Logistics
This sector was a star performer propelled by the expansion of e-commerce and advancements in supply chain optimisation. Concurrently, demand for modern logistics facilities in strategic locations remained high.

In 2025, the Nordic CRE market is in a transitional growth phase

While the logistics and data centre segments are expected to sustain their strong performance, the office and retail sectors require strategic adaptation in response to the evolving market dynamics. Furthermore, the integration of sustainability principles and technological advancements will be key factors for success. To highlight one country, I’d like to mention Norway, which, after a slowdown in 2025 marks a new upcycle – economic recovery, stabilising lending and improved yield prospects are expected to boost activity.

Notable transactions

We have acted as advisors on numerous transactions throughout 2025. I would particularly like to mention the Midstar Hotel Portfolio with 28 hotels across Sweden, Denmark & Norway. It is the largest-ever Nordic hotel portfolio acquisition in history.

We wish you a great summer!

As the first half of the year concludes, we extend our warmest wishes for a splendid summer! We hope our customers, employees, and partners alike get the opportunity to bask in the beauty of the Nordic summer. May this be a time to reconnect with loved ones and rejuvenate. Our offices remain open throughout the summer, so please do not hesitate to contact us at any time. In the meantime, I wish you a delightful summer spent with family and friends. 
 
Stay well and take care!

Sincerely,
//Colin