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Perhaps everybody knows the wise proverb United we stand, divided we fall which probably could be used while speaking about shopping centres (SC) in Lithuania. Although their major goal is to attract as many as possible visitors and to generate enormous turnovers which means being better than other competitors, all the largest shopping centres happen to be located in the same part of the city which is on the right bank of the river Neris. Why are they herded together? That is the question which came into our minds. Let’s try to find an answer to it.
The first explanation which came to our minds why there is such a high density of shopping centres in one part of Vilnius was the principle of economies of scale. Although this conception is usually used to analyse one unit of business, it seems that shopping centres are willing to establish a ‘Silicon ...

As a part of my studies on BI Norwegian Business School, I wrote a Master Thesis, together with a fellow student, Ketil Nereng. The topic: “Forecasting rental rates for Norwegian commercial real estate”. The study uses rental rate statistics from Eiendomsverdi Næring, a Norwegian firm solely working with gathering and producing real estate statistics. The goal of the study was to identify key determinants of changes in real rents and producing a forecasting model able to outperform a random walk and yield significant forecasts.

Because too much of the future market rents are a function of today’s rent, conjecture and speculation on future rent levels. Of course a qualitative approach is an important aspect in establishing prognosis on rent levels, but a more quantitative approach is required. Rent levels in the Oslo market have showed a highly cyclical movement for the period in which data is available. ...

When was the last time you were asked to do something you are not responsible for? Well, I have been many times. For instance, regarding a bill issued by a colleague from another department, or that the coffee machine is out of coffee – I did not simply walk away just because it is not my responsibility. How long does it take to pass a message to a colleague instead of simply telling client “Sorry, I cannot help you with this”? Does it take longer to open the coffee machine and fill it with fresh coffee beans than asking someone else to refill it?

Everyday situations may seem irrelevant to what we do for a living, however, from my humble experience, I have noticed that persons who care about people surrounding them are the ones who care about their clients and partners the most. Bringing two (or more) cups of tasty ...

Previous years’ economic recovery was in many ways an illusion and the world economy stands before an extended period of slow growth as businesses, households and governments consolidate their balance sheets. Politicians on both sides of the Atlantic Ocean will make the necessary decisions to avoid a deep global depression. The decisions will, however, be characterized by disagreement, skepticism and reluctance – and the market turbulence will persist throughout 2012.

The Nordic economies have shown strong development during recent years, and the region seems to stand out from the rest of the developed world with its strong growth and stable macroeconomic fundamentals. Low sovereign debts, transparent economies and consumers with sound personal finances give the region the rare combination of financial stability and growth.

The economies of the region are, however, highly exports dependent. The exports sectors represent around half the combined Nordic GDP – of which the majority goes to EU-countries ...

Roughly 6.7 million people live in the three Baltic states, with over 175,000 square kilometers of territory. In terms of size the region is comparable to Denmark, Finland, Slovakia or Switzerland. Interestingly enough, the Baltics historically became considered as a single (and separate) region – not CEE and not Nordics, but something in between.

Therefore, in the minds of RE investors a separate region also means a separate regional real estate transactions market. And indeed a very small one. This causes all sorts of fears, beginning with illiquidity, and ending with general distrust. To overcome these fears and mitigate at least to some extent the illiquidity risk, the integration to broader regional RE market should be highly desirable for each of the Baltic states. In general, there are two directions:

1) Nordic property market
2) CEE property market.

Any of these directions would certainly serve its purpose of broadening and deepening the perception ...

The darkness is spreading across Europe and the moment of truth is approaching. The development has gone so far that, at the time of writing (December 1), it has become increasingly clear that unless the European leaders come up with a reasonable solution within a few weeks there is great risk of a euro zone break-up. This fragmentation would threaten the European cooperation, involve a rapid and deep global recession and push the global banking system towards a collapse.

The debt crisis is based on structural economic imbalances within the euro area that has been around since the beginning. The development, however, had not had to go so far as it has. When aggregating the euro area net lending, the conditions look much better than for both Japan and the U.S. – countries which have a much higher standing on the financial markets.

Although population growth in Europe is weak, the euro ...

Most people feel that shopping malls and major retail centers are too alike, all with the same stores. And in times like these, with low growth, the high street brands tend to advance their positions and take market shares. So why is it that so few international brands have entered the Northern European markets?

The industry has not been idle but has worked for many years to attract new players. In Sweden, international mall owners and retail consultants have used their existing network and offered good establishment opportunities. It has not been entirely in vain, and there are some new brands which have established a large number of new stores during recent years, for example Deichmann, New Yorker, Media Markt and Desigual. But we need more. We’d love to get more concepts who establish a large number of stores!

Our geographical location on the edge of Europe and the fact that our ...

At Newsec, we position ourselves as ”The Full Service Property House”. After all, we are the leading strategic advisor in Northern Europe who offer all the services needed in a property allocation – from property strategy to transaction, from asset management and leasing to valuations.

In our latest newsletter, published today, we have talked to Statoil, Fabege and Folksam about how they benefit from being clients in “The Full Service Property House” and what they expect from a strategic advisor. Read their answers here

Standing on a piece of land and looking at an obsolete factory, picturing a shopping center in its place, might be difficult for most people. But it’s not if you’re working at Newsec.

Newsec Finland’s Leasing & Retail team has had an enticing opportunity to be a part of a building project from early on. We have helped our client develop a concept for a new shopping centre with a gross leasable area of 38.000 sqm and leased the first phase almost full before the opening date.

For us, the project started in early 2010 when we were asked work on a new shopping center, “Herman”, in Kuopio. The shopping center would be anchored by K-Rauta with a new concept and 10.000 sqm. Leasing of shopping centre premises always begins with the concept and the right mix. We developed a concept for the centre and in this case, the city plan presented ...

The fall is the time for budgeting, forecasting the future, giving the “truth” about the next years or quartiles situation. Prophesies and budgets all work with the same simple laws as all reporting: simplicity, speed and getting an idea of the bigger picture are key factors.

Focus should be on the big picture, not on one cent preciseness. What are the most important factors in the future of each property? What is the key point in good performance of the portfolio? One should have scenarios and simulations for the most important issues, so there can be a relevant discussion of the impact of choices made in the planning and realization of plans during the next period. Only through this discussion will a quality level understanding of the future emerge.

A prognosis, budget or forecast is only as good as the view of the future of the actual people constructing the report. A ...