Investment volume in commercial real estate sector reached €3.8 billion in the first three months of 2016, according to Savills.Investment volume in commercial real estate increased 39 percent compared to Q1 2015.
“The increased appetite for property lending among banks has led to a competitive climate, meaning more favourable terms for property owners,” said Peter Wiman, Head of Research, Savills Sweden. “Sweden is characterized by a strong expansionary monetary policy and the economy is expected to remain robust throughout 2016. This in turn has made our commercial property an increasingly desirable asset and fuelled demand from investors here and abroad.”
With 24% of the total volume attributable to investment in the office market in Q1 2016, Savills notes that this remains the most desirable real estate sector. Residential, closely followed by industrial, were the second and third largest sectors, representing 20% and 19% respectively of total transaction volumes. The firm has identified that demand for assets in the industrial and warehouse sector has increased significantly in recent years as demand for logistics space to service online retail has grown.
Sweden is the strongest performing-housing market in Europe
According to Savills, cross-border investment in Sweden has also notably increased continuously since 2009 and foreign investors accounted for 21% of the total transaction volume in 2015. The share of foreign investors has continued to increase in 2016 and already reached 24% in the first quarter.
The outlook for the rest of 2016 looks to be positive as recent repo rate cuts by the Bank of Sweden will favour the property sector, keeping the costs of financing at historically low levels.