Nordic property shares with focus on retail continue to trend downwards, while the logistics sector has outperformed due to increasing focus on online shopping, according to new research from Pangea Property Partners.
Over the last three years, Nordic retail property shares have dropped 3% while Nordic property stocks in general have had a good run, increasing by 42% on average.
'The retail sector has been suffering from hard competition and low margins for many years, plus the looming threat from e-commerce. Many centres are performing quite well, but the companies are valued cautiously on the stock market,' said Mikael So¨derlundh, head of research and partner at Pangea Property Partners.
Currently, the larger retail companies listed on the Nordic main list are valued almost 25% below their book values on average, and some smaller retail companies listed on First North are valued even lower, according to the report.
'The negative trend for retail is a global phenomenon, and the largest listed retail companies in the Nordics have actually performed better than their global peers in recent years,' continued Mikael So¨derlundh.
Logistics best performing segment
At the same time, the new shopping patterns have favoured the logistics sector. Nordic property shares with a focus on logistics have climbed 19% in the last year, making it the best performing property segment.
'There is very strong investor demand for logistics right now across the Nordics, resulting in record-low yields. We are working on several transactions and there are domestic as well as international buyers competing for the best assets,' said Ba°rd Bjølgerud, CEO and partner at Pangea Property Partners.
Nordic property shares with a focus on office have also performed well, and increased 11% over the last 12 months, and mixed-use property shares have increased 8%.
Currently, the Nordic listed property sector is larger than ever before with 31 property shares on the main list and 23 property shares and developers on First North. Their combined market cap is about €51 bn, Pangea said.