Investors' capital allocation into office and residential markets in ...

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the similar premises in the same area. The ownership of the apartment in a newly-built building is possible once there is a local shortage of the apartments of the same type in the area. Investors are not attracted by these types of investments because of the low returns. The situation looks better for the nationals of the EU and of the EFTA countries, who reside legally in Switzerland. Since the 1 st of June, 2002, the Lex Kohler law is not applicable towards these individuals as they are considered to have the same rights as Swiss nationals concerning the acquisition of the real estate in the country (Peregrina D. and Ducrey O., 2007). Nowadays, the non-Swiss are able to acquire residential and business properties in Switzerland without any authorisation procedures. It is also possible for foreign investors to invest their capital in single-family houses, block of flats, apartments and building land planned for construction. After the restrictions on the purchase of the business property were abolished, the prices went up due to the foreign investments; similar situation is going to be on the Swiss residential market and potential purchasers are going to compete as the amount of the properties available on the market is limited. In Switzerland it takes 16 days to buy commercial property. The direct investments in the construction of residential properties in Switzerland will cause the national economy to go up at the same time the rents will balance out as the new supply of the residential stock is going to be delivered (Peregrina D. and Ducrey O., 2007). The situation for foreign banks looks better after the abolishment of the restrictions on the property acquisition by non-residents. These banks will be able to participate in the auction sales of the real estate by following debt enforcement procedures. At the same time non-residents will be able to buy shares of the real estate companies and investment funds. In general, foreign investors can invest into any type of the real estate properties in Switzerland without limits. Taxes are optimized for real estate properties acquired by foreign investors. The changes in the legal system will make an impact on trusts and make them legally recognized (Peregrina D. and Ducrey O., 2007). Once there is no difference between the buyers of the properties, Swiss authorities will try to control the development of the holiday houses and the measures will be applicable towards all purchasers (both Swiss and non-Swiss) of secondary residences in the country. Still, removing the old regulations will speed up the development of Swiss real estate market giving opportunities for real estate trusts, residential and business developments and public-private partnerships (Peregrina D. and Ducrey O., 2007). 18
Chapter 5 An overview on the property markets in Sweden 5.1 Office market overview Between 2002 and 2007 the office market has recovered from weakness. There has been an increase in trends in Stockholm CBD area in 2007. There are 11.6 million sq.m. of office space in the Greater Stockholm market, only Stockholm CBD area comprises approximately 1.8 million sq.m.. Major office locations in Stockholm area are Stadshagen, Norrtull, Frösunda, Solna Business Park, Solna Station, Solna Strand, Kista, Globen, and Nacka Strand, Alvik, Hammarbyhamnen and Marievik. The large domestic commercial property owners are AP Fastigheter, Vasakronan (now bought by AP Fastigheter), SEB, Alecta, Humlegården, Folksam, AFA, AMF Pension, Diligentia, Hufvudstaden, Balder and Fabege. Due to many ongoing development projects, there will be a new supply of the office space in 2008, 2009 and 2010. The demand for modern buildings prevents both less attractive and modern submarkets to develop. The refurbishment projects are the solution to the problem. The vacancy rate in Stockholm is 10 per cent. Strong rental market influences the vacancy rates both in the Greater Stockholm area and attractive suburban office premises. There has been an increase in the number of large leasing transactions recently. At the same time in attractive locations the vacancy rate for modern office buildings is below 10 per cent. The Kista office market, located outside of the central area of Stockholm, has a vacancy rate of 12 per cent. In attractive Solna submarkets the vacancy rate has fallen down from 20 per cent to 14 per cent (December 2007). Office locations in the suburbs such as Globen, Alvik, Marievik and Nacka Strand have average vacancy rate of 15 per cent (Newsec Nordic Report 2008). Notwithstanding to the slow growth during 2008, vacancy rates will continue to decrease because of the strong labour market in H1 2008. Due to the fall of vacancy rates the rents increased over 10 per cent in 2007 in Stockholm CBD area and will continue to go up in early 2008. The new supply of office premises in 2009–2011 should be able to slow down the dramatic growth of the rents in CBD area. The rents for modern office premises (CBD AA) are SEK 3,800–4,500/sq.m. and for less modern premises (CBD A) they are SEK 2,700–3,400/sq.m. The same situation is in the suburban submarkets where the decrease in vacancy rates below 10 per cent pushed the rents up. The rent levels in Solna, Marievik, Kista and Globen are SEK 1,700–2,100/sq.m. (for modern premises) and SEK 1,000–1,400/sq.m. (older premises in similar locations). Today refurbished office space in CBD, Kista and main road to Arlanda, international airport, is of great interest for potential tenants (data on development in Stockholm area see below Table 5.1). 19
Page 1 and 2: KTH Arkitektur och samhällsbyggnad
Page 3 and 4: The treaty between Switzerland and
Page 5 and 6: Table of Contents CHAPTER 1 .......
Page 7 and 8: 1.2 Aims and objectives The aim of
Page 9 and 10: Chapter 2 Methodology In the paper
Page 11 and 12: expectations rise, making the price
Page 13 and 14: single assets or in a multi/mixed a
Page 15 and 16: In 2007 the transaction volume in t
Page 17: concluded that the continuation of
Page 21 and 22: Table 5.1.2 Development in Gothenbu
Page 23 and 24: (Global Property Guide, August 2008
Page 25 and 26: in the heart of Geneva CBD area is
Page 27 and 28: However, there has been an increase
Page 29 and 30: for the foreign investors in proper
Page 31 and 32: Chapter 8 Investments in office and
Page 33 and 34: The fall in the prices of Swiss Rea
Page 35 and 36: Total return from the investments i
Page 37 and 38: Credit Suisse The company provides
Page 39 and 40: Fixed income trading revenues were
Page 41 and 42: (Source: FOLKSAM Life Administratio
Page 43 and 44: Foncipars fund invests in residenti
Page 45 and 46: - Separate Accounts: France, Italy,
Page 47 and 48: Chapter 10 Conclusions Real estate
Page 49 and 50: References AMF Pension (2008) http:
Page 51 and 52: Swiss info http://www.swissinfo.org
Page 53 and 54: Real estate in relation to other in
Page 55: Blackstone, office property “Euro

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