Savills Investment Management has agreed to buy €100m worth of residential property in Sweden, adding the buildings to its European Living platform.
The firm said the deal would comprise six buildings across the cities of Uppsala, Västerås and Gävle, all of which were built in the last four years. It added that five out of the six properties were built under the investment subsidy system, with energy bonuses implying affordable rental levels with low tenant turnover rates. The firm claimed the buildings could be rented out at up to 25% below market levels.
“We believe the time is now for the European residential sector,” said Patrick Au Yeung, senior fund manager for European Living at Savills Investment Management. “The fundamentals are robust while the supply/demand imbalances are acute and likely to remain persistent.
“This portfolio is another clear indicator that Savills IM’s European Living platform continues to go from strength to strength. The platform benefits from a strong and experienced fund management team, the extensive investment and asset management network of Savills IM across the region and the backing of Savills plc – one of Europe’s leading real estate advisory businesses.”
Day of reckoning?
The move comes a few months after CNBC suggested the Swedish property market was facing a ‘day of reckoning’. Back then, analysts at Nordea told the news organisation house prices in the Nordic nation had fallen 13% after rising steadily for years. And in October, Bloomberg had warned the amount of housing debt in the nation was causing concern across the continent.
“The pandemic initially led to uncertainty on the housing market, although it quickly recovered,” a report by the Swedish Bankers’ Association, The Mortgage Market in Sweden, noted last September. “Strong demand – above all, for single-family homes and larger apartments – led to significant price increases towards the end of 2020 and throughout 2021.
“The increasing inflation and, in particular the increasing mortgage interest rates during the spring of 2022, have resulted in the mortgage market starting to cool down and in housing prices starting to fall during the second quarter of 2022.”
