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

Chapter 7
Investments in office and residential markets in Sweden
Sweden attracted most of international investments in 2007. Swedish property investment
market is the largest in the Nordic region as half of the total investment volume invested
into the Nordics belongs to the Swedish commercial property sector. Domestic as well as
foreign investors have been attracted by Swedish real estate market. Mainly due to the
foreign investors on the market Swedish economy and Real Estate Market have been
strong for the last ten years. The amount of foreign capital invested in Sweden was more
than 50 per cent in 2007. Sweden is the fourth largest investment market in Europe as
well as one of the main recipients of cross-border investments. In 2007, around SEK 70
billion (EUR 7.7 billion) was invested in Swedish Real Estate. The investors outside the
Nordics accounted for more than 50 per cent of capital inflow in Swedish Real Estate in
2007. Investments come from Belgium, Germany, Ireland, US, UK, Finland, Norway,
Netherlands, Denmark. There has been a strong demand in all asset classes in Swedish
Real Estate Market in the last five years. Since 2006 until 2007, there had been a strong
demand for such types of properties as offices (35 per cent), Industrial/Logistics
(26 per cent), Retail (19 per cent), Residential (11 per cent), mixed (7 per cent) and other
(2 per cent). In 2007 types of premises were acquired by the foreign investors such as
offices (34 per cent), mixed (25 per cent), retail (14 per cent), residential (12 per cent),
industrial (11 per cent), hotel (2 per cent) and other (2 per cent). The total demand of real
estate in Sweden is 5.1 million sq.m.. Foreign investors are interested in properties in any
region in Sweden. However, the investment preference is given to the main metropolitan
areas as Stockholm, Gothenburg and Malmö (ISA Report, see Table 7.1 below for the
types of premises acquired in 2007).
Table 7.1
(Source: JLL, sited in ISA Report 2007/8)
Swedish property market attracts investments due to: 1) low transfer taxes; 2) low costs
for tax, legal and other advisory services; 3) transparent property market (reliable legal
system and common use of standardized documentation, available documents in
English); 4) easy access to the database (openness of public property records, easy access
to market data); 5) large pool of professional portfolio managers and facility management
companies. Domestic investors have been very active during 2007 making competition
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