At a time when Europe’s cross border real estate investment volume is still 8 per cent down on the five-year average (€57.1 billion in H1 2021 vs €62 billion), albeit recovering, one country has hit an all time high for outbound investment: Sweden. During the first half of the year, the country’s cross-border investment into continental Europe totalled €5.6 billion, according to RCA data, which is 28 per cent above the amount invested during the same period last year and a new record.
Sweden has become the third largest country of capital origin investing in Europe, just behind Germany (€5.9 billion) and the US (€17.4 billion).
Swedish cross-border activity was notably fuelled by large portfolio and entity acquisitions, primarily targeting residential properties, accounting for 63 per cent of the total investment abroad in H1 2021. The second largest asset class was logistics at 23 per cent.
In January, Heimstaden Bostad AB acquired Niam AB’s Danish residential portfolio for approximately €1.5 billion (SEK 16.6 billion). It consists of 6,237 residential units and 35 commercial properties geographically spread across Denmark. In the same month, the company also bought a 130-property portfolio in Berlin for €830 million, comprising a total of 3,902 residential units, 208 commercial units and 321 parking spaces. In February, Catena acquired six logistics properties (five located in Denmark and one in Sweden) for a combined property value of approximately €80.4 million (SEK 815 million).
A mix of risk diversification, the possibility to achieve higher returns in neighbouring countries and the Swedish market alone not being large enough given the size of the listed companies and private equity funds are pushing Swedish investors to seek opportunities beyond their borders, even outside the more familiar Nordics region.
Over the past two years, although still predominantly focusing on Nordic countries – notably Denmark and Finland – Swedish investors have increased their activity in Germany and the Netherlands and widened their investment scope.
Given Swedish players’ years of experience in the domestic multifamily sector, they are able to swoop in on large portfolio opportunities in established markets, such as the Netherlands and Germany, and those where the sector is only recently taking off, such as the Czech Republic, Poland and Spain. They are also taking advantage of the current lack of Asian investors in Europe given travel restrictions linked to Covid-19.
As a result, while we expect to see Swedish investors to continue to prioritise the Nordic market, we wouldn’t be surprised to see them enter more countries when the right multifamily and logistics opportunities become available.
Further information
Contact Lydia Brissy or Niklas Zuckerman
.jpg)
.jpg)
