Investors Ready for More Deals in 2025 After Strong Q4 2024
Cushman & Wakefield's "Property Investor Confidence Index" presents results from an investor surveySTOCKHOLM, March 13, 2025 – The Swedish investment market ended the fourth quarter of 2024 on a relatively strong note, with a total transaction volume of approximately SEK 60 billion. This brings the total volume for 2024 to around SEK 136 billion (92). Although the market is still below the 10-year average, the transaction volume has increased by about 48% compared to the previous year, with expectations for a continued positive trend in 2025. Adjusted for the strongest quarter of the past decade, Q4 2021, the investment volume for Q4 2024 has returned to the 10-year average. The residential segment accounted for the largest share of the transaction volume, with 28% of the total volume, followed by office (23%) and industrial (16%).
The "Property Investor Confidence Index" report was compiled from survey responses from investors in the Swedish market between February 20th and 28th. The results indicate stable market development for the next six months, with a more positive outlook compared to the previous survey. The survey shows a stabilization of tenant demand across the major segments, along with expectations of continued stable return requirements. With the investment market back on track, most investors report plans to expand their portfolios. Among the factors expected to most influence market values going forward, operating and maintenance costs have received increased attention, while the development of initial return requirements continues to be seen as a key factor.
This edition of the survey explores investors' views on how the U.S. presidential election affects the outlook for Swedish real estate investments. Respondents share their perspective on how uncertainty in the equity and interest rate markets after the election is impacting real estate investments in Sweden. The survey also explores to what extent investors have started requiring larger deposits or additional security from tenants due to an increase in bankruptcies and restructurings.
Anders Elvinsson, Head of Valuation & Strategic Advisory, says: "It is encouraging to see that investors are becoming more positive about the market despite the turbulence that has occurred. Our survey ended just before last week's downturns among listed real estate companies' stocks, which were primarily driven by rising long-term interest rates. It remains to be seen how this will affect investors' willingness to pay in the direct market for commercial properties moving forward."
Ludvig Dansarie, Research Analyst: "The survey results indicate that there is still strong appetite among investors to make deals, as a clear majority plan to expand their portfolios with additional acquisitions. This is likely driven by the expectation that yields have stabilized and that financing conditions will continue to improve, or at least remain unchanged."
Residential was the segment with the highest transaction volume in 2024 and is expected to remain high-intensity, as investors assess that newly built residential properties have the best return potential in the upcoming half-year.
