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Trevian Market Insight Finland Q2/2023

The transaction volume in the first quarter of 2023 experienced a significant decline, reaching levels comparable to those seen during the financial crisis of 2008. However, there are signs of market expansion as a great number of properties are entering the market, indicating a potential increase in market activity. Notably, significant real estate transactions have already been announced in the second quarter of 2023. These transactions focus primarily on logistics, and residential sectors. The buyers in these transactions include established investors within the Finnish market as well as new large international private equity investors.

Finland’s NATO membership is regarded as an accelerating factor in the arrival of new international investors into the country. Amidst the evolving market conditions, the real estate sector is set to experience various corporate and ownership arrangements.

Regarding the broader economic landscape, Eurozone inflation is expected to decrease during the summer, driven mainly by a decline in energy prices. A slowdown in overall inflation growth is already visible, while a slight decrease in core inflation is also anticipated. Market forecasts suggest that the ECB will raise interest rates by 25 basis points in July. In addition, at least one more interest rate hike in the fall is currently considered possible. The market predicts that interest rate hikes will end in 2023, with
the possibility of rate cuts in 2024. The news of interest rate stabilization has already contributed to finding common price levels between buyers and sellers.

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Trevian Asset Management is a Finnish real estate investment and asset management company focused on commercial and residential real estate, owned by its key personnel. We offer full-service asset management and structured investment services throughout the whole investment lifecycle. The services are focused especially for institutional real estate investors, banks, and other professional investors. Trevian’s assets under management is 1.2B€. www.trevian.fi/en