Swedish investment property recorded a 14.1% total return in 2015, according to the IPD Sweden Annual Property Index.
Swedish investment property recorded a 14.1% total return in 2015, according to the IPD Sweden Annual Property Index.
Capital growth rose to 8.8%, which is the strongest on record since 2007 and positive for the sixth consecutive year. Since the start of the positive trajectory in 2010, capital growth has reached a total 26%, according to the index.
Income return on the other hand fell to 4.9% in 2015, the lowest level since 2007.
Compared to 2014, improvement was widespread with all sectors posting stronger returns. The Office Sector continued to lead the market with a total return above 16%, while Industrial remained the main laggard at 9.7%.
{b]Capital offices
Offices in Stockholm have performed better than elsewhere in the country, whereas the corresponding
assets in Malmö, the third largest region in Sweden, underperformed. It is noteworthy that after close to 11% capital growth in the office sector in 2015, income return of 4.8% is the lowest recorded since 1991.
'The rate of total return has accelerated further in 2015, bolstered by stronger investment demand and thus lower yields across the board,' said Erik Nyman, executive director, MSCI. 'Low interest rates continue to support the property market and capital inflows but increased uncertainty regarding the international macroeconomic outlook and the inherent equity market volatility might create a more challenging environment in 2016.'
The Index covers almost SEK 600 bn (€64 bn) in direct property asset value representing a market share of over 40%.
