Finland Market OverviewThe Finnish economy expanded in the first quarter of 2023 and is expected to see accelerated growth through the second half of the year. GDP growth is forecast at around 1.7% for 2023, while improved conditions in the energy market have had a beneficial impact on inflation, which is expected to fall below the 2% target set by the European Central Bank for 2024. Household consumption and consumer confidence is expected to increase over the second half of this year.
OfficeDemand continued to be stable for prime offices and premises with strong amenities that bring additional value to employees. Some companies are growing and expanding; however, the most common inquiries are from companies that are downsizing or looking for cost savings. Some occupiers are willing to pay higher rent/sq.m for premises that bring additional value for the tenants through taking less space. Long-term confidence is still present, but many are looking for shorter contracts and flexibility. Vacancy increased by 0.8 percentage points compared to the previous quarter – a negative net take up of nearly 40,000 sq.m.
In the retail sector, the activity remains good in the food and beverage sector, however more caution has been evident compared to 2022. Demand for Helsinki CBD high street space has increased, and slight improvement in the occupancy has been seen in this area . However, high street demand still remains low compared to pre-COVID, and the pressure for rent levels, especially in large units occupied by e.g., fashion retailers, has pushed prime rents further down in Q2 2023.