Â鶹ӳ»­

Total returns on Nordic property were slightly below the 10-year annual average in 2012 due to a decline in capital returns across the region, according to IPD.

Nevertheless, the Nordics remain relatively stable when compared to the wider European picture.

The latest IPD Nordic Annual Property Index showed that Nordic commercial property delivered a total return of 5.6% for 2012, compared with 8.2% for 2011.

All four Nordic countries covered by the index - Norway, Sweden, Denmark and Finland - posted a decline in total return compared with 2011. Sweden was in pole position at 6.4%, whereas Denmark was the lowest performer (3.8%).

Gradually higher risk appetite among investors turned direct property into an underperformer as riskier assets such as equities delivered a total return of 18% (MSCI Nordic).

Income return remained stable in 2012 with only minor movements compared with 2011, ranging from 4.8% in Denmark to 6.3% in Finland. Capital return was negative in Denmark, Finland and Norway while Sweden was the exception at +1.2%.

All four Nordic countries posted lower capital returns compared with 2011. On aggregate, they declined to 0.3%.

Historically 2012 was slightly lower than the 10-year annual average total return of 7.6% per annum.

Christina Gustafsson, managing director of IPD Norden, said: 'Although capital return is virtually zero across the Nordics, and total returns have come down, they remain seemingly robust from a European perspective. Across sectors, residential again gained pole position ahead of the commercial sectors.'

The IPD Nordic Annual Property Index is developed in cooperation with KTI and sponsored by Aberdeen, BNP Paribas Real Estate and Newsec. The index covers almost €88 bn of directly owned real estate in the region.

The IPD/KTI Nordic Property Investment Briefing on 25 April 2013 in Stockholm will provide further details and analysis of the Nordics as a commercial property investment market.

Click on the links below for the full report and information on the IPD / KTI Nordic Property Investment Briefing.

PropertyEU's latest takes place on 27 March. Places are limited so sign up today!