Sweden's Real Estate Market

“The European real estate market has been experiencing top-level pricing in global gateway cities. In particular Stockholm, Sweden. Although topping out in price, Stockholm’s real estate market offers a multitude of segments that are promising investment opportunities. With the global cost of equity capital at favorable levels, the investment opportunities and returns are unparalleled,” said Keith Knutsson, Integrale Advisors Managing Director.

Sweden boasts a unique and stable environment for real estate investments. A key determinant in assessing the efficiency and stability of a market is how transparent the market is. The Jones Lang LaSalle (JLL’s) Global Real Estate Index quantifies real estate market transparency across 102 markets worldwide, and Sweden scored among the most transparent.

Mark Brzezinski- The U.S. Ambassador in Sweden states: “according to the World Economic Forum, Sweden ranks number one in the world in leveraging information technologies, and Fortune Magazine notes that Stockholm offers a potent combination of creativity, R&D and business-friendly policies.” This business-friendly environment is reflected in the real estate sector.

The real estate environment in Sweden is sophisticated, with industry leading participants and global players. Transaction volumes in Sweden are growing, the maturity of billions of dollars of commercial mortgage backed securities and structured debt, as well as the liquidation of poorly performing loans will supply an ample amount of properties available for transactions.

“During the first quarter of 2015, the Swedish central bank joined ranks with central banks globally to push base rates into negative territory in the hope of stimulating growth and inflation. While economies such as Japan and the US have been there for some time, the phenomenon has now reached our domestic arena. The Swedish central bank also began direct purchases of bonds on the market, which pushes bond yields on longer maturities below zero. This meant that the year started out as last year concluded, with interest rates falling from historical lows and an intensifying hunt for returns. This led to a strong start of the year for the stock market, particularly in Sweden, where it climbed to some 15%. Sweden also stands to benefit from the pronounced depreciation of the SEK, mainly against the USD, over the last twelve months, which has lent support to Swedish Export industry”, as stated by Catella’s CEO/President Knut Pedersen.

Integrale Advisors, led by Keith Knutsson remains confident in the real estate developments in Sweden and will aggressively pursue forthcoming investment opportunities.