Increased bank lending and growing investor interest in alternative financing will have a positive impact on future transaction volumes, according to the latest research report by Savills.
Increased bank lending and growing investor interest in alternative financing will have a positive impact on future transaction volumes, according to the latest research report by Savills.
In the first quarter of 2013 alone SEK 3.9 bn (€470 mln) of bonds were issued by listed property companies, compared with SEK 6.8 bn (€810 mln) in the whole of 2012.
In addition to bond issuances, further alternative sources of debt to traditional bank lending in Sweden include vendor financing, paying with own stock and issuing preferential shares, Savills' research shows.
'Bank lending is slowly picking up in Sweden and margins have been reduced slightly although it is still quite scarce for non-prime properties,' said Johan Bernström, head of investment at Savills Sweden. 'However, we are seeing significant interest in alternative sources of financing to fill the gap in the market which should boost investment volumes after a slightly weaker first quarter.'
Savills data puts total transaction volume in Q1 2013 at SEK 16 bn (€1.9 bn), representing a 40% decrease compared with the same period in 2012.
Buyers continue to focus on prime assets across all sectors, particularly prime offices in Stockholm, Gothenburg and Malmö as well as residential and public properties. Due to the ongoing strong investor preference for prime product the firm expects prime yields to remain stable in the coming months.
Peter Wiman, head of research at Savills Sweden, added: 'We are continuing to see high demand for prime stock in Sweden. However, with decreasing supply levels for this type of product we could see an increased level of investment activity for best secondary properties going forward.'
