Continued high real estate transaction activity in Sweden – increased international interest

Stockholm 31 March 2016 – The Swedish transaction market got off to a good start in 2016 and the transaction volume for the first quarter amounted to SEK 28.5 billion, which is more than SEK 5 billion higher than the same period in 2015. It is also the second highest deal volume recorded during a first quarter in the last ten years.

Compared with the same period last year, the average transaction has been larger and the share of foreign buyers higher in 2016. Altogether Swedish and Nordic investors were net sellers during the quarter, while German investors and investors from markets outside Europe were net buyers. The share of transactions in the deal size range from SEK 1 billion to SEK 2 billion accounted for 27 percent of the total volume, while the share of transactions in the range between SEK 2 billion and SEK 5 billion was 17 percent of the total.

A number of major portfolio transactions, comprising a mix of different property types, characterized the quarter. These transactions accounted for 40 percent of the total volume. Besides mixed asset portfolio transactions, the single largest segment in terms of volume was office properties, whose share amounted to 20 percent. Residential properties was the second largest segment with a share of 17 percent. Retail properties ended in third place with 7 percent and the share of industrial and logistics properties amounted to 6 percent of the total.

Stockholm and the real estate markets outside the three metropolitan areas, in the regional and smaller cities, attracted the most capital during the quarter. Stockholm accounted for 39 percent of the volume of investments and the markets in the regional and smaller cities accounted for 18 percent. Metropolitan regions Västra Götaland’s and Skåne’s share was 8 percent and 7 percent respectively.

- We expect the high level of transaction activity to continue in the second quarter. The market drivers of 2014 and 2015 are still intact: low interest rates, strong growth in the economy and many different categories of motivated buyers. A positive change from 2015 is that foreign investors' share of acquisitions continues to increase; a negative change is that banks have grown somewhat more restrictive in their approach to lending to commercial real estate, says Daniel Anderbring, Head of Investment Strategy.

- The global capital available for real estate investments has never been greater. The current climate of global economic and political uncertainties benefits real estate investments in transparent and liquid markets like Sweden. While the Swedish market could be affected by global uncertainties, the upcoming Brexit referendum has stifled activity in the UK temporarily; our view is that the Swedish market is fundamentally strong and can contribute to the diversification needs of many international investors, says Agneta Jacobsson, Head of Sweden and the Nordics.

For further information, please contact:

Agneta Jacobsson
Head of Sweden and the Nordics
+46 (0)70 772 64 62
agneta.jacobsson@cushwake.com

or

Daniel Anderbring
Head of Investment Strategy
+46 (0)70 846 47 86 
daniel.anderbring@cushwake.com