The investment year 2013 started muted but activity picked up towards the summer and June saw a surge in activity. By the end of the second quarter, the transaction volume totalled SEK 28.8bn, meaning that the first half of 2013 was just in line with the same period in 2012.
Domestic investors have been heavily dominating the Swedish market over the last few years and this trend has continued also in 2013. With only 6 transactions completed by foreign investors in Q2 2013, their share is now 8.8%. The international share is unlikely to increase dramatically in thenear term.
In terms of geography, investors had a strong bias toward Stockholm also in Q2 2013. Mixed portfolios, i.e. assets spread over more than one region, and properties located outside the three major markets did also attract a large share of the investment volume. Residential and offices were the two dominant investment sectors over the quarter.
From being solely focused on prime property the market has become increasingly polarised. The investors are either looking for newly produced, fully let, nice and shiny buildings, or they seek opportunistic assets such as development project.
With investor demand still in place, we would expect prime yields to remain low for the time being. Since a growing number of investors are also willing to consider stock with more opportunistic characteristics, at least in the core markets, this should lead to a gradual narrowing of the yield gap between prime and secondary.
Source : DTZ (Groupe UGL)