The Nordics shine as the safest haven in Europe in foreign investors' eyes amid the political turmoil and uncertainty in the rest of Europe, experts agreed at the PropertyEU Nordics Investment Briefing, which was held this week in Stockholm.
Question marks over Brexit and upcoming elections in Germany, France, the Netherlands and possibly Italy contrast with the quiet stability of the four Nordic countries. ‘As risk around us increases, it is not just rising property prices or economic growth that are attracting foreign investors,’ said Lars Flaoyen, head of Nordic property research at Aberdeen Asset Management. ‘They are looking at the strength of public finances, competitiveness in the global economy, good demographics. In short, they see that the long-term prospects are good.’
Investors are turning away from the European markets they traditionally favoured and looking at the Nordics instead. ‘US investors in particular are holding off the UK and we have also seen a slowdown in France and Germany, while the Nordics are enjoying record highs,’ said Andrew Smith, partner at Catella. ‘In the last two weeks alone I have had a huge number of meetings with foreign investors showing an interest in the market.’
Transaction volumes have risen substantially in the last few years, but the best is yet to come, said Ingemar Rindstig, executive director of real estate Nordics at EY: ‘The interest from foreign investors has not fully materialised yet. The wall of money is coming and I believe there are many good years ahead. The Nordics are a good geography to invest in.’
Even in a sector such as offices in Stockholm, which many regard as fully priced, there are opportunities to be had, said Klaus Hansen Vikstrom, deputy CEO and director of business development at Fabege: ‘I don’t think we have seen the top yet. There is strong demand from investors for modern, flexible offices with long leases and new areas keep opening up. There is definitely more money to be made in offices in Stockholm.’
The Nordics market offers opportunities not only to investors but also to banks. ‘There are very few senior lenders in the region, the Swedish banks that have huge exposure are now withdrawing from the market and investors can have a hard time finding financing,’ said Pontus Sundin, chief representative Nordics, Helaba. ‘This is why we have chosen to go in the opposite direction and open an office here. For us it is a very attractive and transparent market with great opportunities to do business and margins are much better than in Germany.’
