Newsec assesses that the total transaction volume during 2015 will amount to approximately SEK 135 billion.
“An increased flow of foreign capital has previously characterized the end of an upswing in the real estate cycle, which has been followed by decreasing real estate values. On today’s market, with a large flow of mainly pension capital to the real estate market, along with a continuously low interest rate climate there are no tendencies to dropping values” says Jakob Petterson, Head of Research, Newsec Sweden.
Institutions and listed real estate companies have been and are large net buyers. A large part of the Swedish institution capital is now being invested in housing, while the listed companies mainly acquire office properties. Real estate funds were large net sellers during 2014, and this trend has been reinforced this year.
“Good access to cheap capital, along with an excess of buyers with a long investment horizon has lead to a plummeting yield, mainly in commercial segments in the best locations. The yield for housing in growth areas has also decreased considerably, as well as well-located housing properties, housing in worse locations and for million program properties. However, this segment still has not attracted international capital” says Jakob Pettersson.
Increased International Interest in Swedish Properties
Sweden — During the first eleven months of 2015, international investors have doubled their relative investment volume compared to the same period the previous year, They are now accountable for approximately 30 percent of the transaction volume, according to Newsec. The corresponding investment volume from international investors has not been seen since 2008.