Henderson: Exploring the investment case for Swedish real estate (SE)

In its latest research report, Henderson’s c. £12.7 billion Property business turns its attention to Sweden. Sweden has been an attractive market to overseas investors for many years. The ongoing concerns over the Eurozone has boosted interest in the Swedish property market and in particular the retail sector which offers attractive returns for the inherent low levels of risk.

This report provides an introduction into the country’s geography, demographics and economy while also taking a closer look at the property investment market, in particular its retail sector. The report sets out why Henderson believes it offers an attractive opportunity for long term, risk averse foreign investors.

Over the last 15 years, Sweden’s economy has grown by 2.7% per year outperforming the large European economies (as well as the other Nordic countries) which grew by only 1.9% per year. In recent years, Sweden has had the highest GDP growth rates in Western Europe, achieving 3.8% and 1.2% in 2011 and 2012 respectively.

Sweden’s unemployment rate of 7.7% (ILO definition) is also consistently below the European (EU 27) average of 10.4%, whereas employment grew by 0.8% pa since the mid-90s – on par with France and ahead of Germany and the UK.

Sweden also continually achieves high scores in competitiveness rankings. The extensive survey published by the World Economic Forum placed Sweden in 4th place globally in 2012. The country is seen as especially strong in technology and the quality of public institutions. The efficiency of the public sector, the education system, use of talent, and research and development are among the main contributors to Sweden’s outstanding business profile. This academic analysis is verified in practice by productivity growth and the success of Swedish products abroad.

Stefan Wundrak, Director of Research, Property, said: "Sweden is sometimes overlooked as one of the four largest core markets in Europe. It provides investors with an attractive safe haven alternative to Germany, France and the UK. Fundamentals are even better than in Germany and we encourage investors to take a closer look."

Source: Henderson

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