Foreign capital is increasingly targeting Nordic property, according to research from Brunswich Real Estate’s investment banking arm.
Over the past two decades, this has contributed to a doubling in the proportion of the total stock market value accounted for by listed property companies, from 2.2% in 1996, to 4.5% in 2016, said Erik Gärdén, partner of Brunswick Real Estate.
In particular, the data suggests that foreign owners are increasing their share of the Swedish listed property sector, particularly over the past five years. Brunswick said this has been driven by global managers increasing their exposure to the sector, even as the total market size of the sector increased five-fold.
Peter Leimdörfer, co-managing partner of Brunswick Real Estate, added that the sector was “probably the fastest and easiest way for foreign investors to get exposure to the Swedish real estate market.”
The demand for listed shares in the market will push prices higher before a similar impact is felt in the direct property market, meaning that there are expectations of a premium for listed Swedish property, Leimdörfer suggested.
That said, rising prices in Sweden mean that there may be more attractive valuations in other parts of the Nordic region, with Brunswick highlighting Finland.