Christina Gustafsson, Executive Director, MSCI commented, “In 2014 we saw capital growth in Norway, which we had not seen for the previous two years. The capital growth is mainly a result of increasing values in Oslo offices, which in turn is mainly explained by yield compression of some 20-30bps.

“In Sweden, the best performing sector is Offices while returns on Retail remained low. Most Swedish segments have experienced value increases and strong total returns whereas Denmark is a market of two sides, where Residential is very strong, but the office market, particularly in the outskirts of Copenhagen are weak, largely because of high vacancy rates.”

In Finland, Residential was the best performing sector for the seventh consecutive year, due to the positive development of market values. Residential properties delivered a total return of 8.2%. In all other main property sectors capital values decreased.

The IPD Nordic Annual Property Index measures the combined performance of real estate markets in four countries. The index is based on the IPD Indexes for Denmark, Norway and Sweden and the Finnish Property index which is produced by KTI in Finland. The index tracks performance of 6,454 property investments, with a total capital value of € 98 billion as at December 2014.