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Business Conditions

Business Conditions – Finland

According to an estimate published in December by the Finnish Ministry of Finance, the Finnish GDP declined by 1.2% in 2013. The economy is expected to bottom out and take a turn to slow growth in 2014. The forecast of 0.8% GDP growth for 2014 is based on increasing foreign trade. The current forecast for GDP growth in 2015 is 1.8%. The turn to growth will be supported by the recovery in the eurozone, the strengthening of economic growth in Finland’s key export markets as well as an increase in services and manufacturing.

According to KTI Property Information, the fourth quarter of 2013 was very active with a transaction volume of EUR 1.13 billion. This marks the first time the quarterly transaction volume exceeded EUR 1 billion since Q1/2008. The transaction volume for the full year 2013 was EUR 2.38 billion, an increase of approximately 11% compared to 2012.

The vacancy rate for office premises in the Helsinki metropolitan area continued to increase in the second half of the year. According to Catella Property Oy, the vacancy rate for offices stood at 12.4% at the end of 2013, up 0.9 percentage points from the midpoint of the year.

The recent years have seen a high level of activity in new construction in the Helsinki metropolitan area, but this is now slowing down. According to KTI Property Information, the total floor area of new office projects started in 2013 stood at only 32,500m² at the end of September.

Business Conditions – Russia

Russian GDP growth slowed down in 2013. According to the estimate of the Russian Ministry of Finance, GDP growth in 2013 was only approximately 1.4%. The GDP growth forecast for 2014 is 2.5%. Economic growth in the coming years will be based on export growth, higher purchasing power and increased investments.

The property transaction market remained active. According to CB Richard Ellis, the fourth quarter volume in 2013 was approximately USD 2.2 billion, and the transaction volume for the full year amounted to approximately USD 7 billion.

Office and retail properties remain clearly the most popular investments. At the end of September 2013, office and retail properties accounted for 85% of the total transaction volume.

According to CB Richard Ellis, the average vacancy rate for office premises in Moscow stood at approximately 11% in September 2013. In the third quarter, the vacancy rate for Class A office space increased, while the vacancy rate for Class B office space decreased. Rent levels have not changed for the past two years. Some 586,000m² of new office space had been completed by the end of September. The estimate for the full year 2013 is approximately 860,000m².