With Finland's economy and property market having showed relative resilience, Catella says the country is now ideally positioned to take full advantage of a global economic recovery. Finland's gross domestic product (CDP) rose 1.5% in 2003, compared with an average 0.8% increase for the European Union, according to Catella.

The company also predicts rising demand from companies in the ICT (information, communications and technology) and forestry sectors, two of Finland's main economic pillars.

Although the office market has weakened during the past two years, it is not suffering from oversupply, according to Catella. The vacancy rate, which stands at 6.8%, may initially rise, with 166,000m? of office space under construction and set to come onto the market, but it is then expected to ease off. Despite this temporary rise in supply, prime rents are predicted to remain stable at around €312 per m?, with yields standing at 6.5%.

Finland's retail sector lacks good quality space, says Catella, which notes that the overall vacancy rate is low, at 1.4%. Tenants should easily be found for the 127,000m? of retail space under construction. Prime rents in Helsinki's central business district stand at €1,428 per m?.

Total property investment for 2003 is expected to equal last year's €2.3bn. The largest deal so far this year was the sale by Nordea of Nordisk Renting, which has a portfolio worth around €450m, to Royal Bank of Scotland. One of the year's large single-asset deals saw Wereldhave acquire a 14,000m? retail property in Tapiola for €36m, in the Dutch investor's second investment in Finland.