The basic idea behind investments in real estate is familiar to many. One of the most common ways of becoming a real estate investor is to buy a house or apartment and rent it out. This is known as a cash flow property, which generates its owner monthly profit in the form of rental income. An equally common way is to buy a property in disrepair and then repair and renovate it to add value to the investment. In a similar way, a person might buy an empty plot, build a piece of property on it and sell the whole package for more than they have spent creating it. This is the idea behind investments in real estate in a nutshell. Real estate is a popular form of investment because it combines a monthly cash flow and the potential increase in value. This guarantees both good and secure profit. In a historical perspective, real estate investment is one of the safest forms of investing in terms of maintaining and increasing value. No wonder then that so many private persons, foundations and companies have decided to become real estate investors.


ICON differs from other real estate and housing funds with its investment strategy for real estate development. As experts in real estate and investments, we know that it does not pay to invest in projects where the increase in value is left to chance. That is why for our funds we specifically select development projects with plenty of potential to add value by developing them. Equally important as choosing developable real estate is the fact that we focus on successful growth centres when selecting investments. Find out more about our real estate projects here.

We buy plots on which we build mostly housing blocks. We also purchase old office buildings and convert their purpose of use. We apply for the required official permits, so we can refurbish the buildings as good as new. If demolishing a building is more profitable than renovating it – we demolish it the building and construct a new building in its place. We focus on building architecturally beautiful, energy efficient properties that are comfortable to live in and a pleasure to use. The apartments are already sold during construction or at the latest very soon after it.

In short, we add value to the real estate by developing it. When done correctly, real estate development is the most profitable way of investing in real estate. ICON’s funds, bond products and dwellings are a safe way to benefit from the flow of consumers brought on by urbanisation, and to ensure that the investments are located in the right geographical areas.


The trend of urbanisation is common knowledge. The figures on it can be easily found through various sources in terms of net migration. However, merely interpreting the figures is not enough for making professional decisions. At ICON, we actively monitor what happens around us – we follow news about migration to cities indicated by reliable sources, the effects of political risks and decisions on the market, and changes in the various areas related to zoning. Although we do not have a crystal ball for predicting the future, with strategic and active research we can avoid numerous pitfalls in which an individual investor can easily fall. We conduct specific, precise due diligence (DD) on every project, guaranteeing that we spend the time before a project reaches our portfolio on getting to know the project and planning for its possibilities. Efficient and thorough planning in this industry often guarantees the best returns. Every year, we perform an extensive risk analysis on the basis of which we position the location, size, structure, model (conversion or construction) and financing of the project as efficiently as possible with a view to the time in question and the predictable near future.


Our investment strategy is focusing on development projects. The reason for this is that real estate development, when done correctly, is the most profitable form of real estate investment. We build the increase in value into the properties ourselves.

Our projects are situated in the Helsinki metropolitan area and, after careful consideration, we can also carry out projects in growth centres such as Tampere, Turku, Vaasa and Tallinn in Estonia. The great level of services in growth centres attracts new residents to cities, and this creates a need for new and pleasant dwellings.

In the future, we want to be known as an active real estate developer that makes investments in metropolitan areas in Scandinavia and the Baltic countries.


According to a report issued by VTT Technical Research Centre of Finland Ltd, 13,000 dwellings a year should be built in the Helsinki metropolitan area in the 21st century. A look at the statistics shows that this figure was only reached in 2015-2017. Consequently, we have a chronic shortage of 20,000 dwellings in the Helsinki area, left behind by the lack of construction activity in the early years of the 2000s.


Housing prices in Helsinki have risen by approx. 11%, i.e. about 1.7% per year, since 2010 (Table 1). At the same time, inflation has been at 2.35%/year, on average, and the consumer price index 2.3% per year, 19% compounded.

Conclusions should not be drawn on the basis of these figures alone; instead, one must also take account of three other factors affecting the markets: consumers’ purchasing power, unemployment, and the interest level. In the 2000s, wages and salaries have risen an average of 4%. At the same time, housing prices have risen one percentage point faster (Table 2). In the 2000s, unemployment was 8% on average, which does not give special cause for concern. The interest level has been exceptionally low since the recession that started in 2008, and this has supported the real estate markets for its part.

The answer to the question “has the Finnish real estate market overheated or not” has two sides. The locality is of crucial importance. In our view, the housing market in the growth centres in Finland is not at risk of overheating. In depopulating municipalities, housing and real estate prices will very likely decline.



All investments contain a risk related to time. With fund investments, the time-related risk can involve both the projects acquired and the time of the investment. The time-related risk concerning projects purchased can become realised due to the body of civil servants, as even long delays in the start-up of projects, for example. Furthermore, a delay in alterations made to a renovation project can be caused by unforeseen difficulties/findings in structures confronted during the renovation.

The risk related to the time of the investment is universal – i.e. based on, for instance, a fall in all housing prices in in the city centre of Helsinki within a short period of time, or a collapse due to a disruption in the market. If such a large risk becomes reality, all the other operators in the sector are faced with the same situation. At ICON, we have cushioned this risk by acquiring projects that can be easily rented out should such a threat emerge – this would reduce returns for the duration of the market disruption, and a sale would not occur until the time when the situation is over and prices have returned to the correct level.


Since one essential tool in real estate development is external capital during the completion time of the projects, the operation is subject to a material interest risk. As the current situation has prevailed for an exceptionally long time, low interest rates have manifested themselves as higher returns for the investments. If the interest rates return to a normal level, i.e. rise by two-three percent, the effect on our operation would be relatively small, but it does exist and must be taken into account. If interest rates rise to 4-5% or higher, our operation will be adapted in terms of financing, but a decrease in returns due to rising interest rates is a fact. All operators in the industry are affected in the same way be changes in interest rates.


ICON has several partners during the various stages of the processes. We screen our partners by using precise processes well-known in industry, and this preliminary selection reduces the risks in a significant manner. Still, external partners are always a risk, and the potential realisation of this risk must be taken into consideration in the strategy, agreements and management alike. The key aspect is the completion of projects that is protected with the correct contract technology – all unexpected disruptions caused by partners must be eliminated at the earliest stage possible, and one must be prepared to replace operators in the course of projects. Even large operators in this sector may go bankrupt or confront other challenges, considering that it can take several years from the signing of a project to the completion of the project. It would be unjustified not to be prepared for potential interruptions.



The ICON newsletter and expert column are published approximately once a month. In the expert column we describe our own operations, give useful tools to readers, and interview various experts on the real estate sector.

In the newsletter we publish new products and launch pre-marketing of dwellings before public advance marketing begins.