The central bank rate (the repo rate) has been lowered and according to DTZ’s latest investor survey the majority think financial conditions will continue to improve and nearly half of the respondents plan to be net buyers in the short term.
The transaction market is speeding up and in Q2 2014 activity reached SEK 41.3 bn up by 38% from Q2 2013.
Activity by international investors did also pick up in Q2 and their share went from 3% in Q1 to 17% in Q2. On the sell side the international players accounted for 14% of the volume.
This quarter quoted private property companies was the leading investor category accounting for 45% of the investment volume. On the sell side private property vehicles dominated with approximately 31% of the volume.
In terms of geography investors have widened their investment focus. Looking at full-year volumes, Stockholm's share has been steadily declining from 60% in 2009 to 33% in 2013. Instead it is the markets outside the metropolitan areas that are experiencing a growing interest. Thus trend has continued this quarter.
Even though residential and offices remain investors’ first choice, sectors such as hotels and public buildings are stepping up the ladder.
We would expect prime yields to remain low for the time being. Since a growing number of investors are willing to consider stock with more opportunistic characteristics, at least in the core markets, we are also seeing a gradual narrowing of the yield gap between prime and secondary.
Source : DTZ (Groupe UGL)