EUROPE - Currency appreciation in the Nordic states is still within a "manageable range" and nothing to really worry about with a long-term investment, according to German real estate company Patrizia.
Since the beginning of the year, both the Swedish krona and the Norwegian krone have appreciated against the euro, with Sweden even considering depressing the exchange rate artificially.
Martin Lemke, managing director at Patrizia GewerbeInvest KAG, the company's commercial real estate branch, said: "There is a certain volatility in the SEK and NOK, but it is still within a manageable rate."
He thinks the SEK will be back to a "normal" exchange rate of around 9SEK to a euro by the end of the year.
Until then, Sweden is a very good seller's market, while the situation is different in Norway, where the NOK has not appreciated by as much.
"And for a long-term investment such as a Spezialfonds," Lemke added, "these exchange rates do not alarm me."
Patrizia, which opened an office in Stockholm last year, has extended its business in the Nordics in recent years.
Karin Siebels, head of commercial research at Patrizia, noted that Scandinavia was still a "closed shop" to a great extent, but said foreign investors were increasingly welcome.
Lemke agreed that the markets were "opening up", but he said they remained very much in the hands of domestic investors.
Foreigners currently complete about 20% of the transactions in the Swedish market. By comparison, that figure was closer to 50% in 2006.
According to Patrizia, this was mainly due to the fact opportunistic investors were no longer looking at the Nordics, while long-term investors such as German Spezialfonds retained their interest in those markets.
Rikke Lykke, the recently appointed managing director of Patrizia Nordics, said: "Especially smaller pension funds tend to prefer home markets because they got burnt with foreign investments in the 1980s.
"If they are investing outside their home markets, they are only doing so with co-investments in order not to make the same mistakes again."
Joint ventures and club deals, however, have become increasingly common in Sweden, according to Henrik Österberg, heading Patrizia's Stockholm office.
Examples from recent years include insurer Alecta and Swedish retail chain ICA constructing shops together since 2010, or AP4, Folksam, Alecta, Kapan, Ikano and Sampo having joined forces to found Hemfosa after the financial crisis to buy up property from distressed owners.
As for the themes most popular among Swedish institutions, Österberg named elderly care homes and schools, as those buildings were owned by the municipalities and therefore considered a very stable investment.