The weight of equity has pushed real estate prices and yields in Sweden back to the high levels seen before the outbreak of the financial crisis. This was one of the key points made at PropertyEU's latest Nordic Investment Briefing.
The weight of equity has pushed real estate prices and yields in Sweden back to the high levels seen before the outbreak of the financial crisis. This was one of the key points made at PropertyEU's latest Nordic Investment Briefing.
Helaba's vice-president of international real estate finance for Continental Europe, Thomas Volkers, told the briefing that competition for real estate in Sweden is very high. 'When it comes to prices and yields we are already back to 2006-7.'
Volkers said that similar pressures are evident in the lending market. 'We see margins going down while prices are going up and loan-to-value ratios are also gradually going up, hopefully not to the level seen before the crisis,' he told the event which was hosted by Aberdeen Asset Management in London.
Helaba is an active lender in the Swedish real estate market. Last November the German bank, together with peer Aareal, provided €280 mln in debt financing for US investor Starwood Capital upon its entry into the Nordics. In one of the largest Swedish transactions of 2013, the US private equity group joined forces with local investor and asset manager Vencom to acquire a 205,000 m2 retail package in Sweden from KF Fastigheter. The two partners paid SEK 3.9 bn (€435 mln) for the assets, which include seven retail schemes in a number of Swedish cities.
International investors looking for better yields could look at Finland, according to Rikke Lykke, managing director in the Nordics for investor Patrizia Immobilien. 'You can actually get the highest yields in the Finnish market, and Thomas can tell you that you can also get the lowest margins.'
'The yield gap in Finland is wider than anywhere else in Europe. I find this very interesting, as everyone is flooding into Poland. They are forgetting that there may be other countries a little further away from Germany, maybe a little further away from the UK, but look up and there are a number of other interesting places to invest in. If you know what you are doing you should definitely look up a little bit,' she added.