Aberdeen Property Investors expects the total return on Swedish properties to reach 11.8 percent this year. This represents an upward adjustment of 1.7 percent compared with the forecast of 10.1 percent made in December 2005.
Aberdeen believes that there are three main reasons for the increase in forecasts, which have been published in its latest Swedish Property Market Outlook;
The first is that yield requirements have continued to fall further than expected and lettings have increased, particularly for modern office premises in central locations. However, more shops have been built in Sweden recently, which run the risk of being unoccupied if there is an economic downturn.
Secondly, foreign investments in Swedish real estate have continued to be strong in 2006. The short-term opportunistic investor from 2002 and 2004 has been replaced by long-term foreign institutions that have increasingly diversified their investments to Swedish property. In addition, Swedish property companies and institutions have also been very active in making domestic investments this year.
Thirdly, there has been a greater focus on the geographical location of Swedish properties than before. Smaller cities and medium sized towns, in particular in the north of Sweden, are now becoming popular with foreign investors who previously limited their investments to the big cities.
Jon Lekander, Head of Investment Strategy at Aberdeen Property Investors commented;
“The case for investing in Swedish property market has increased considerably. It offers greater diversification in a portfolio as well as higher returns and a broader range of investment options than ever before. We believe that this is set to continue throughout 2006 and that the market will remain more liquid than last year as foreign interest increases.
For more information, please contact:
Jon Lekander Head of Investment Strategy, Aberdeen Property Investors Tel: +46 8 412 80 77, +46 70 211 80 77, jon.lekander@aberdeenpropertyinvestors.com
Ubbe Strihagen, International Director, Aberdeen Property Investors Holding Tel: +46 8 412 80 39, +46 70 520 33 80, ubbe.strihagen@aberdeenpropertyinvestors.com
Charlotte Barker / Tom Siveyer, Maitland Tel: +44 207 379 5151
About Aberdeen Property Investors
Aberdeen Property Investors is the specialist division of Aberdeen Asset Management plc, a global investment management group listed on the London Stock Exchange and managing over €100 billion of assets.
Aberdeen Property Investors manages over €9 billion in property investments through property funds and management mandates. The division has some 500 employees at offices in ten European countries. Clients are primarily institutional investors such as life and pension funds.
Aberdeen was named the leading property Investment Manager Globally, in Western Europe and in the Nordic & Baltic regions in the Euromoney Awards 2006 for Excellence in Real Estate.
Issued and approved by Aberdeen Asset Managers Limited, on behalf of Aberdeen Property Investors, authorised and regulated by the Financial Services Authority.