According to global real estate adviser DTZ's Nordic Market Overview Report 2005, Sweden's real estate market hit a record last year with the total value of real estate business in Sweden reaching €15.4 billion - €3 billion more than in 2004. Ola Jacobsson, analyst at DTZ in Sweden explains why the Swedish property market is booming.
"Sweden has a well-diversified economy with a track record of growth and stability and an attractive and transparent business operating environment. Until recently, investors' attention has focused on Stockholm. However, properties outside of large cities are attracting increasing interest from both domestic and foreign investors. We are presently seeing powerful growth in the trend to acquire retail parks or Big Boxes, as they are called in the USA. For example, UK-based Boultbee Land PLC purchased among others S:t Per in Uppsala and Multicenter in Västerås. Last summer, the German real estate fund Oppenheim purchased a portfolio of retail parks for 2.7 million.
In addition to the retail park trend, Sweden is experiencing a strong investment interest in logistics and warehouse properties. According to DTZ's annual logistics report, Motorways of the Sea, an expected 38%increase of total freight, and 21% increase in passenger transport within the EU25 are estimated for 2010, according to the European Commission's estimate on the changes in the transportation of goods traffic between
countries. Harbour cities in Sweden, such as Gothenburg and also Stockholm are predicted to be winners if these market changes take place.
Going forward, interest from international investors is expected to continue, especially in retail properties. The rental market is anticipated to remain stable with marginal improvements in prime rents. We will see high demand for new, modern and efficient premises and Stockholm is expected to maintain, and probably increase its competitive position.
So far, during the first six months of 2006, transaction volumes have increased 35% compared with the same period last year. Swedish investors have been more aggressive than in previous years, accounting for 6 out of 10 transactions. 2005 saw half that level of involvement. We can expect that 2006 will be another record year."