Sweden's Resilient Market: Investment Opportunities

A Rising Star in Cross-Border Investment Opportunities

Apr 17 | 3 minutes read
sweden investment opportunities

COVID-19 seems to have bolstered the rationale for investing in Sweden, as evidenced by the recent surge in cross-border activity in the Swedish market. Up until October 2021, international buyers, whose presence has grown annually for the past five years, were responsible for a quarter of all deals (SEK 56 billion).


The fact that the pandemic had a lesser impact on Sweden's economy compared to many other European countries has likely encouraged this development. The Swedish government's SEK 40 billion lifeline supported businesses and jobs, while increased household consumption is projected to push GDP growth to around 4.7% by the end of the year. The country's central bank is set to keep its accommodating monetary policy in place for the foreseeable future, maintaining the repo rate at zero until at least 2024.


Swedish real estate assets have consistently shown strong performance relative to many other European markets, which have been more volatile. The property market in Sweden is highly liquid and stable, making it an attractive investment option. Currently, competitive pressures have pushed yields to all-time lows in the multifamily and logistics sectors, prompting cross-border buyers to seek portfolios with dependable, long-term cash flows.


Over the past eight years, a housing shortage affecting 207 of 290 Swedish municipalities has put pressure on construction rates, leading to a robust multifamily sector. Many investors are eager to enter this sector via forward-funding and commitment deals. At the time of writing, the office sector represented only 7% of the total transaction volume since the pandemic began (in contrast to a yearly average of 21% between 2016 and 2020). This is due to a reduction in supply, not a decrease in demand, as Swedish offices offer international buyers a strong core-plus and value-add dynamic.


Historically, cross-border investment in Sweden has been driven by the US, Norway, Germany, and the UK. However, interest from other regions, such as South Korea, is growing, despite their limited track record in Scandinavia. The rumored interest in the significant investment of Orsted's HQs in Greater Copenhagen highlights this shift. For South Korean groups, Scandinavia is one of the few European regions offering diversification, as they have predominantly invested in core western and central Europe. Sweden is likely to become a key market for these investors in the future, given the favorable currency conditions and their desire to geographically balance their portfolios.




In conclusion, the Swedish market has become an increasingly attractive destination for cross-border investment, particularly in the wake of COVID-19. The country's resilient economy, accommodating monetary policy, and stable property market make it an appealing option for investors seeking long-term growth and diversification. With interest growing among international buyers, including those from South Korea, Sweden is poised to remain a key market for global investors looking to balance their portfolios geographically and capitalize on the country's promising investment opportunities.

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