International real estate advisor Savills latest Swedish market report finds that investment volumes reached SEK 160 billion, the highest figure since the 2008 financial downturn. The final quarter of 2014 boosted total volumes with SEK 69 billion transacted. Savills states that increasing liquidity has resulted in transactions increasing by 26% since 2013. In addition, the average deal size increased from SEK 235 million in 2013 to just under SEK 300 million in 2014.

The firm reports that there has been solid demand for all types of assets, with residential property being the most favored investment class with SEK 37 billion homes sold in 2014. There has also been an increased investor interest in hotels, with transaction volumes hitting a 10-year high at SEK 8.5 billion.

International investors were more active in the Swedish market in 2014, according to Savills, and accounted for SEK 29 billion which was more than double the SEK 14 billion in 2013. The firm predicts that 2015 will continue to see interest from foreign investors both from within and outside of Europe.

Peter Wiman, head of research at Savills Sweden, comments: “Transaction volumes have been very strong and the competition for assets has led to aggressive pricing, with yields dropping to historic lows in some sub-sectors. For example, prime yields for central Stockholm offices are currently at 4.25% which was last recorded in the 1980s and in the years leading up to the 2008 downturn.”

Fredrik Östberg, head of investment at Savills Sweden, comments: “Despite the strong fourth quarter, there is a noticeable lack of assets advertised openly, with demand far exceeding supply. A significant proportion of last years transactions took place off-market. We predict that 2015 should be another good year as the market adapts. Low interest rates, access to equity and borrowed capital are a good foundation for attractive returns.”