Press release 6.3.2026

The total return on property investments held by professional investors increased to its highest level since 2021 and amounted to 3.5 per cent in 2025. Capital growth remained negative, however, the decline in capital values slowed down significantly compared to the previous three years. The average income return increased to 5.1 per cent, supported by both improved economic occupancy rates and lower capital values. Across the main property sectors, industrial properties delivered the highest total returns in 2025.

The KTI Property Index is based on 50 professionally managed real estate portfolios with an aggregate capital value exceeding € 35 billion. The index covers approximately 36 per cent of the professionally owned investment property universe. The KTI Property Index measures annual total return on standing investments, comprising annual realised net income and capital growth.

Capital values declined by 1.6 per cent on average

The increase in interest rates triggered a decline in the capital values of investment properties in 2022. In 2025, capital values continued to decrease, although significantly less than in the previous three years. The increase in yields continued to pressure capital values in 2025, however, towards the end of the year, yields started to stabilise as transaction activity in the property market picked up. Differences in total returns between property sectors remain pronounced. The average income return increased from 4.8 per cent in 2024 to 5.1 per cent in 2025.

Total return on residential properties increased to 3.3 per cent

Residential properties represent the largest sector of the professionally managed real estate investment market, accounting for approximately 35 per cent of the total invested universe. Capital values for residential assets declined sharply between 2022 and 2024, but in 2025, capital growth ended up only slightly in negative territory. The income return on residential properties continued to strengthen, primarily supported by lower capital values, but economic occupancy rate also improved compared to the previous year, averaging 93.5 per cent in 2025. The decline in capital values remained most pronounced within the newer residential stock. Among Finland’s major cities, capital growth turned slightly positive in Helsinki and Tampere.

Office properties remained the weakest performing property sector

Total return on office properties returned only marginally into positive territory in 2025, reaching 0.4 per cent, as the sector continued to be weighed down by uncertainty and weakening occupier demand. The average annual decline in capital values of office properties over the past five years has approached 5 per cent. In 2025, capital values were primarily pressured by a continued increase in yields, which rose more sharply for office assets than for other property sectors. Income return increased compared to the previous year, driven, however, solely by declining capital values, rather than underlying income growth. Economic occupancy rate in the office sector continued to deteriorate, falling below 80 per cent across the office portfolios covered by the Property Index.

Industrial properties delivered the best returns in 2025

Industrial properties – including warehouse, logistics and manufacturing assets – achieved a total return of 7.2 per cent in 2025. Over the past five years, industrial properties have been the strongest performing property sector, generating an average annual total return of 7.9 per cent. In 2025, industrial properties were the only sector to record positive capital growth. Returns were further supported by a significantly higher income return compared to other property sectors. Industrial properties, however, represent well below 10 per cent of the total value of the invested property universe in Finland.

Total return on retail properties increased to 4.8 per cent

The average total return on retail properties increased by nearly one percentage point compared with the previous year. Capital values continued to decline, although at a slower pace than in earlier years. Shopping centre assets underperformed other retail properties in 2025, as both capital growth and income return remained weaker than for other types of retail properties.  

Capital growth of public use properties close to zero

The share of public use properties – assets used for the provision of publicly funded services – increased to over 10 per cent of the total property investment market in 2025. In recent years, the sector has demonstrated stronger performance than most other property segments. The sector’s returns are supported by stable income returns and high occupancy levels. Capital growth was only marginally negative in 2025, as yields remained broadly stable, and total return increased to 6.2 per cent. Among public use property sub-sectors, educational properties once again delivered the strongest performance, with capital growth turning clearly positive.

For more information:
Hanna Kaleva
hanna.kaleva@kti.fi
Managing director, KTI

KTI is an independent market information and research service company servicing the professional property investment sector in Finland.

16 January 2026

Property transaction market clearly picked up in Finland in 2025. According to the KTI statistics, property transaction volume reached almost €4.4 billion in 2025. The volume almost doubled from the exceptionally low level of less than €2.3 billion in the previous year. 

Transaction activity accelerated towards the end of the year. Due to several portfolio transactions, the transaction volume in Q4/2025 amounted to €1.9 billion, which was the highest quarterly volume since April-June 2022. The growth in transaction volume was partly influenced by different kinds of portfolio arrangements and the financial challenges of some sellers. 

Domestic investors net sellers, investors from other Nordic countries active 

Transaction activity was boosted in particular by the growth in foreign investment demand. The share of foreign investors of the total volume increased to 60 per cent. In total, foreign investors acquired properties in Finland for some €2.6 billion in 2025, compared to some €1.0 billion in 2024. About two-thirds of the purchases by foreign investors were made by investors from other Nordic countries, mainly Swedish and Norwegian. 

The total sales of domestic professional real estate investors exceeded their acquisitions in 2025. On the buyer side, the largest domestic group were property investment companies, with a 14 per cent share of the total volume. 

Public use properties rose to the top of the statistics, retail property transaction volume picked up 

For the first time, public use properties became the most traded property sector, accounting for 30 per cent of the total volume in 2025. The sector’s annual volume of €1.3 billion comprised several portfolio transactions, for example, of various nursing home and daycare properties, as well as a few large individual property transactions. The largest transaction of the year took place at the very end of the year, when the Norwegian Public Property Invest bought the property portfolio of the Swedish SBB. The value of Finnish properties accounted for over €500 million in the transaction. 

Residential properties were the second most traded property sector, accounting for 22 per cent of the total volume. The largest residential property portfolio transactions of the year were announced in the summer. Firstly, Kojamo sold almost 2,000 rental apartments to funds managed by the American-based Apollo and Avant Capital Partners, and secondly, OP-Rental Yield special investment fund sold approximately 1,000 rental apartments to SATO. Retail property transaction market had a couple of relatively quiet years, but in 2025, sector’s transaction volume more than doubled to almost €800 million. The volume comprised mostly various supermarket, hypermarket and big box property transactions. 

The transaction volume of office properties almost tripled compared to the previous year but remained still quite low. Industrial properties had topped the sector statistics in 2024, but in 2025 industrial were the only sector in which the transaction volume decreased compared to the previous year. Office and industrial properties accounted for 11 and 13 per cent of the total volume, respectively. Unlike many previous years, a few significant hotel property transactions were also made during 2025. Some hotel property transactions were influenced by the seller’s difficult situation. 

More detailed information and analysis on property transactions in Finland can be found in the KTI Transactions information service. For more information, contact: Mikko Soutamo (+358 50 548 0480, mikko.soutamo(a)kti.fi,) or Olli-Pekka Virkola (+358 50 330 5287, olli-pekka.virkola(a)kti.fi). 

Press release 6.3.2025

The total return on properties owned by professional investors rose to 1.9% in 2024. The decline in the market values of investment properties continued, but at a slower pace than in the previous two years. The income return increased to 4.8% on average, supported by the declining market values. The weaker-than-average performance of the two largest property sectors – residential and office properties – weighed on the overall returns of property investments.

The results of the KTI Property Index are based on 54 professionally managed real estate investment portfolios in Finland with a total value of approximately 37 billion euros. The index covers 39% of the total invested property market in Finland. The KTI Property Index describes the total return on investment properties owned throughout the year, which comprises the annual realised net income and capital growth.

Decline in market values slowed down

The rise in interest rates has been weighing on the market values of investment properties since 2022. In 2024, the market values of the Finnish investment properties decreased by 2.8% on average. Although the development of interest rates stabilised during the year, the yields for properties still increased throughout 2024. In addition, the general uncertainty of space demand weighs on the market values ​​of office properties in particular, where also rental growth prospects remain subdued. Rental value growth was the most positive for public use properties. Also in retail and residential property sectors, positive rental outlook supports the market values.

Total return on residential properties rose to 1.2%

Residential properties are the largest sector of the professional property investment market in Finland, accounting for approximately 35% of the total property investment universe. The significant decline in the market values of residential properties pulled the sector’s total returns into negative territory in 2022 and 2023. In 2024, the decline in values slowed down markedly, and the slightly increased income return pulled the total return into positive territory at 1.2%. In the Helsinki metropolitan area, both the capital growth and income return of residential properties were weaker than in the rest of the country. The average occupancy rate remained low, which continued to weigh on income return in the Helsinki metropolitan area. Among the major cities, the highest total return for residential properties in 2024 was recorded in Oulu.

Total return on office properties remained negative

As the only property sector, total return on office property investments remained in negative territory in 2024, ending at -0.7%. Due to increasing yields, the market values of office properties decreased more than in other property sectors. After a sharp drop in 2023, the decline in the market values of office properties in Helsinki CBD leveled off in 2024, but, due to a lower income return, CBD offices still underperformed the office properties in the whole country on average. The average returns for the office market are also weighed down by both non-existent rental growth expectations and the further decline in occupancy rates. Operational costs of office properties also continued to rise as attracting and retaining tenants requires more efforts from the landlords. However, the income return for the office sector increased from the previous year, supported by the decline in market values.

Industrial properties produced the highest returns for the fourth consecutive year

The attractiveness of industrial properties – various warehouse, logistics, and manufacturing properties – has strengthened in the Finnish property investment market in recent years. In 2024, industrial properties were the most traded sector in the transaction market, accounting for over 30% of the year’s total transaction volume. However, the sector’s share of the total real estate investment market remains at only approximately 8%. As in the previous three years, industrial properties were the best-performing real estate sector in 2024, with a total return of 4.9%. A strong income return was sufficient to compensate for the slightly negative capital growth.

Weak performance of shopping centres weighs on the returns of the retail property sector

The average total return on retail properties was 3.9% in 2024. The decline in the market values of the sector slowed to less than 2%. Unlike in other property sectors, the average income return of retail properties decreased in 2024, particularly due to the increased costs of shopping centre properties. Also the capital growth remained more negative for shopping centres than for other retail properties.

Market values of public use properties decreased the least

The public use property sector, which has grown markedly in recent years, includes, for instance, various nursing home, educational, and healthcare properties. The sector’s share of the total Finnish property investment market rose to nearly 10% in 2024. The total return on public use properties rose to 4.6% in 2024, as the decline in values slowed to approximately 1% on average. Supported by long-term leases and solvent tenants, the sector’s contract rents continued to rise, and the occupancy rate remained high at over 98%. Supported by a more moderate decline in market values, educational properties outperformed nursing home and healthcare properties in 2024.  

For more information:
Hanna Kaleva, Managing director, KTI, +358 40 5555 269

KTI is an independent market information and research service company servicing the professional property investment sector in Finland.