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Investment opportunities in Swedish Real Estate 2009 One of Europes largest investment markets

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THE SWEDISH REAL ESTATE MARKET. THE SWEDISH ECONOMY. INVESTMENT ... Johannes Haug, Senior Vice President and Managing Director for Europe, Pembroke Real Estate ... – PowerPoint PPT presentation

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Title: Investment opportunities in Swedish Real Estate 2009 One of Europes largest investment markets


1
Investment opportunities inSwedish Real
Estate2009 One of Europes largest investment
markets
2
Contents
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR CITIES FOR INVESTMENT
ISA AND ISA PARTNERS
3
FOREIGN INVESTMENTS
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR REGIONS FOR INVESTMENT
ISA AND ISA PARTNERS
4
Strong investment inflowsInvestments by
international investors 2000-2008, SEK billion
FOREIGN INVESTMENTS
1 SEK 0.10, 0.15 Source Leimdörfer
5
Steady increase in foreign ownershipDirect
foreign ownership, 20022008, SEK billion
FOREIGN INVESTMENTS
By acquisition value. 1 SEK 0.10, 0.15
Source DTZ
6
A large recipient of cross-border investment
Share of total European cross-border
investments, 2008
FOREIGN INVESTMENTS

Source Cushman Wakefield
7
Stockholm highly liquid investment market Top
ten investment cities 2008, investment turnover
billion
FOREIGN INVESTMENTS
London, UK 11,402
Paris, France 8,499
Madrid, Spain 3,696
Stockholm, Sweden 3,081
Moscow, Russia 2,610
Berlin, Germany 2,063
Copenhagen, Denmark 1,960
Munich, Germany 1,831
Hamburg, Germany 1,605
Brussels, Belgium 1,577
  • Excluding multi-city portfolio transactions,
    where no single city breakdown is available.
  • Source CB Richard Ellis

8
International investor presence
FOREIGN INVESTMENTS
Abu Dhabi Inv. Auth., UAE
GIC Real Estate, Singapore
AXA Real Estate IM, France
GPT Halverton, UK
Bank of Ireland PB, Ireland
ING Real Estate, Netherlands
Investea, Denmark
Bank of Ireland PB, Ireland
IVG, Germany
Boultbee, UK
Klépierre, France
Boultbee, UK
MEAG, Germany
Citycon, Finland
Orion Capital Managers, UK
Commerz Real, Germany
Pembroke Real Estate, US
Credit Suisse, Germany
Property Group, Denmark
Deka, Germany
SveaReal, Norway
Deutsche Bank/RREEF, Germany
Unibail-Rodamco (France)
DnB Nor, Norway
Valad Property Group, Australia
Ejendomsinvest, Denmark
Vital, Norway
GE Real Estate, US
9
Good geographic diversificationInternational
investor origin 2008, share of foreign investments
FOREIGN INVESTMENTS
Source Leimdörfer
10
Investors range the full spectrumType of
investors 2008, share of total investment market
FOREIGN INVESTMENTS
Source Leimdörfer
11
Strongest demand for office property Share of
total transaction volume, 2008
FOREIGN INVESTMENTS
By type of main use. Source Leimdörfer
12
Transaction highlights 2008
FOREIGN INVESTMENTS
  • Price, MSEK
  • n/a
  • n/a
  • 2,400
  • 2,100
  • n/a
  • 955
  • 903
  • 850
  • 585
  • Seller Property unit
    Buyer
  • Cardinal Capital Partners Nordea properties in
    Stockholm Pembroke, US
  • Steen Ström 9 shopping centers Klépierre,
    France and ABP, Netherlands
  • Alecta 34 properties across Sweden Valad
    Property Group, Australia
  • Whitehall Niam Fund III 8 properties in
    Sthlm (Marievik) Aberdeen Property Inv.
  • RBS Nordisk Renting Office property in
    Göteborg Acta, Norway
  • GE Real Estate 6 public properties in
    Norrköping and Nyköping Kungsleden
  • Landic Property 11 properties across Sweden
    Otium, Norway
  • Stena Residential portfolio in Umeå Acta,
    Norway
  • Skanska Retail project in Burlöv German fund
  • Bonnier Cityfast. Retail property in Häggvik,
    Stockholm UBS Real Estate, Germany


Source Leimdörfer
13
Investors view Sweden favorably
FOREIGN INVESTMENTS
  •  National institutional investors and a
    significant amount of private high net-worth
    ensure high liquidity in prime markets even in
    difficult times of the cycle.
  • Martin Weikamp, Vice President, RREEF Investment
  • Our philosophy is to invest in markets that have
    long-term
  • growth potential through multiple cycles. This
    holds true
  • for our investment in Sweden.
  • Johannes Haug, Senior Vice President and Managing
    Director for Europe, Pembroke Real Estate

14
SWEDISH REAL ESTATE MARKET
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR CITIES FOR INVESTMENT
ISA AND ISA PARTNERS
15
Investments by investor categorySEK billion
SWEDISH REAL ESTATE MARKET
1 SEK 0.11, 0.15 Source Leimdörfer
16
Commercial owners are active buyers/sellersOwners
hip 2008, estimated market value SEK 864 billion
( 86 bn/ 131bn)
SWEDISH REAL ESTATE MARKET
Note Industrial properties are excluded, since
the majority of these are owner occupied. Source
Newsec
17
Swedens largest property owners
SWEDISH REAL ESTATE MARKET
Aberdeen Prop. Inv., UK Acta, Norway AFA
Fastigheter, Sweden Alecta, Sweden Akademiska
Hus, Sweden Akelius, Sweden AMF, Sweden Atrium
Ljungberg, Sweden Balder, Sweden Boultbee, UK
Castellum, Sweden Diligentia, Sweden DnB Nor,
Norway Fabege, Sweden GE Real Estate,
US Hufvudstaden, Sweden ING Real Estate,
Netherlands Kungsleden, Sweden Landic Property ,
Iceland Niam, Sweden Nordisk Renting,
UK Norrporten, Sweden
Northern European Prop. (UK) Property Group
(Denmark) SEB Trygg Liv, Sweden Stena
Fastigheter, Sweden Unibail-Rodamco,
France Vasakronan, Sweden Valad Property Group,
Australia Vital, Norway Wallenstam,
Sweden Wihlborgs, Sweden
Source Newsec
18
Excellent transparencyOnline analysis and
forecasting tools available
SWEDISH REAL ESTATE MARKET
19
Internet access to land register
SWEDISH REAL ESTATE MARKET
  • Location of the property unit
  • Title holder
  • Plans and regulations
  • Mortgages
  • Easements
  • Tax assessment values
  • Purchase price for the last transfer
  • Available in English

20
Sweden leads green building certificationShare
of certified European buildings, percent
FOREIGN INVESTMENTS
Kungsbrohuset, Stockholm
Source European Green Building Program, February
2009
21
Stable banking system, active domestic
lendersLending secured by commercial property,
SEK billion
SWEDISH REAL ESTATE MARKET
Property providers Aareal Bank, Germany Danske
Bank, Denmark DnB Nor, Norway Eurohypo,
Germany Handelsbanken, Sweden HBOS, UK Hypo Real,
Germany Nordea, Sweden Nykredit, Denmark RBS
(UK) SBAB (Sweden) SEB (Sweden) Swedbank (Sweden)
Source Statistics Sweden
22
Competitive fiscal system
SWEDISH REAL ESTATE MARKET
  • Corporate tax rate 26.3 percent
  • Interests fully deductible for tax purposes
  • No thin capitalization rules
  • No withholding taxes on interests
  • No stamp tax or capital duties on share capital
  • Extensive double tax treaty network
  • Favorable holding company regime
  • The quality of advice received has been very
    satisfactory. This continues to be our experience
    with ongoing property management.
  • Richard Ray Head of acquisitions Nordic
    countries, Managing Director, AXA Real Estate
    Investment Managers Belgium

23
Attractive holding company regime
SWEDISH REAL ESTATE MARKET
  • Treatment of capital gains Exempt
  • Minimum holding for gains Unlisted companies
    none
  • Listed companies 10
  • Treatment of dividends Exempt
  • Minimum holding for dividends Unlisted companies
    none
  • Listed companies 10
  • Minimum ownership period Unlisted companies
    none
  • Listed companies 10
  • Interest deduction Yes
  • Debt/equity restrictions None

24
Real estate transparency index - Europe2008
24
SWEDISH REAL ESTATE MARKET
UK, Netherlands, France, SWEDEN (global rank 8),
Belgium
TIER 1
Ireland, Finland, Germany, Denmark, Spain,
Austria, Norway, Italy, Switzerland, Portugal,
Poland
TIER 2
Hungary, Estonia, Slovakia, Greece, Bulgaria,
Russia, Romania, Latvia, Lithuania, Ukraine,
Croatia
TIER 3
Source Jones Lang LaSalle, LaSalle Investment
Management
November 12, 2009
www.isa.se
25
Legal aspects
SWEDISH REAL ESTATE MARKET
  • Land ownership includes buildings and other
    facilities.
  • Property may be demarcated horizontally and
    vertically.
  • No notary procedure required to transfer land.
  • No need for title insurance.
  • Simple procedures for mortgaging and title
    registration.
  • Sweden is a very transparent and well-ordered
    market, and a good environment for a foreign
    investor.
  • David Revill, Director Asset Management, Boultbee

26
Commercial lease regulations tied to real
property code
SWEDISH REAL ESTATE MARKET
Standard form contracts normally used for
commercial leases
27
Wide selection of advisors (1)
SWEDISH REAL ESTATE MARKET
  • Real estate advisors
  • Catella Corporate Finance
  • CB Richard Ellis
  • Colliers International
  • Cushman Wakefield
  • DTZ
  • Equator Stockholm
  • Leimdörfer
  • Lundberg Partners
  • NAI Svefa
  • NewSec
  • Tenzing

Law firms Ashurst Baker McKenzie Cederquist Glims
tedt Kilpatrick Stockton Linklaters Mannheimer
Swartling MAQS Trägårdh Falkenborn Vinge
Tax Accounting Ernst Young Öhrlings
PricewaterhouseCoopers
28
Wide selection of advisors (2)
SWEDISH REAL ESTATE MARKET
  • Facility management
  • Bravida
  • Coor
  • ISS
  • Jones Lang Lasalle
  • Newsec
  • Struktur Svenska Kontor

Tenant representation Struktur Svenska
Kontor Tenant Partners
Asset management Areim Möller Partners Newsec
29
Competitive corporate tax rate2009, percent
SWEDISH REAL ESTATE MARKET

Source Öhrlings PricewaterhouseCoopers, 2009
30
Relevant Swedish taxes (January, 2009)
SWEDISH REAL ESTATE MARKET
  • Corporate income tax 26.3 percent
  • Property transfer tax 3 percent
  • Value added tax 25 percent
  • Annual property tax
  • Residential property SEK 1,200/apartment or 0.4
  • Commercial office space 1.0 percent
  • Industrial property 0.5 percent
  • Stamp duty on mortgages 2 percent

SEK 1,200/apartment but not higher than 0.4 of
the tax assessment value of the apartment. Tax
is based on an assessment value set by the
Swedish Tax Agency. This value is supposed to
correspond to 75 percent of the estimated market
value of the property.
31
THE SWEDISH ECONOMY
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR CITIES FOR INVESTMENT
ISA AND ISA PARTNERS
32
Diversified and international economyDistribution
of exports by industry sector 2008 (Jan-Oct)
THE SWEDISH ECONOMY
Source Statistics Sweden
33
A long tradition of global activity
THE SWEDISH ECONOMY
34
Home to multinationalsSwedens largest
companies, sales 2007 SEK billion
THE SWEDISH ECONOMY
Volvo Group, automotive 285.4
Ericsson, mobile systems 187.8
Vattenfall, energy 143.6
Skanska, construction 138.8
Sony Ericsson, mobile communications 122.9
Volvo Cars, cars 106.9
SCA, pulp paper 105.9
Electrolux, household appliances 104.7
Telia Sonera, telecommunications 96.3
Vattenfall wind turbine in Hailuoto, Finland
Sandvik, metals technology 86.3
Scania, automotive 84.5
1 SEK 0.10, 0.15
35
Strong public financesCurrent account and budget
balance, of GDP
35
THE SWEDISH ECONOMY
Source Economist, February 2009
November 12, 2009
www.isa.se
36
Track-record of growth Average annual GDP growth
in selected countries 2004-2008, percent
THE SWEDISH ECONOMY
GDP at constant prices, figures for 2008 are
preliminary Source National Institute of
Economic Research Eurostat OECD, 2008
37
Meeting inflation target of 2 percentAnnual
average inflation rate 2004-2008, percent
THE SWEDISH ECONOMY
Source National Institute of Economic Research
Eurostat OECD, 2008. Figures for 2008 are
preliminary
38
The worlds most competitive countriesRanking,
2008
THE SWEDISH ECONOMY
1. US
2. Switzerland
3. Denmark
4. Sweden
5. Singapore
6. Finland
7. Germany
8. Netherlands
9. Japan
10. Canada
Source World Economic Forum Global
Competitiveness Report 20082009, 2008
39
Most innovative countriesRanking, 2007
THE SWEDISH ECONOMY
1. Sweden
2. Switzerland
3. Finland
4. Israel
5. Denmark
6. Japan
7. Germany
8. UK
9. US
10. Luxembourg
Source European Commission European Innovation
Scoreboard 2007, 2008
40
INVESTMENT OPPORTUNITY
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR CITIES FOR INVESTMENT
ISA AND ISA PARTNERS
41
Investment opportunity
INVESTMENT OPPORTUNITY
  • Easy to do business.
  • Good market liquidity.
  • Sizeable investment market.
  • High market transparency.
  • Reliable public information.
  • Low total transaction costs.
  • Fiscal and legal structures that contribute to
    attractive transaction schemes.
  • Diversified and international economy.
  • Sweden is definitely one of the easiest, and
    nicest, places to work in for a foreign
    investor.
  • Ed Williams
  • Founding Principal,
  • NEP Partners

42
Yield gap reappearsYield vs long-term bond rates
2000-2008, percent
INVESTMENT OPPORTUNITY
Source Leimdörfer
43
Total returns, breakdown on asset
classes1997-2008, percent
INVESTMENT OPPORTUNITY
Source IPD
44
Undervalued Swedish krona?Currency stability,
SEK vs and , 2001-2008
INVESTMENT OPPORTUNITY
Source Central Bank of Sweden
45
MAJOR CITIES FOR INVESTMENT
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR CITIES FOR INVESTMENT
ISA AND ISA PARTNERS
46
Foreign owners active all over SwedenLarger
metropolitan areas and university cities attract
majority of investments
MAJOR CITIES FOR INVESTMENT
  • Stockholm
  • Göteborg
  • Malmö/Lund
  • Some 20-30 regional anchor cities

47
Europes largest office property marketsOffice
stock 2008, million sq.m.
MAJOR CITIES FOR INVESTMENT
1. Greater London, UK 28.5
2. Greater Paris, France 27.2
3. Munich, Germany 18.3
4. Berlin, Germany 17.5
5. Brussels, Belgium 12.8
6. Hamburg, Germany 12.8
7. Frankfurt, Germany 11.8
10. Greater Stockholm 10.8
26. Göteborg 3.5
34. Malmö/Lund 1.5
Source CB Richard Ellis
48
ISA AND ISA PARTNERS
FOREIGN INVESTMENTS
THE SWEDISH REAL ESTATE MARKET
THE SWEDISH ECONOMY
INVESTMENT OPPORTUNITY
MAJOR REGIONS FOR INVESTMENT
ISA AND ISA PARTNERS
49
ISA Partners
ISA AND ISA PARTNERS
  • Real estate companies Property owners
  • AMF, Atrium Ljungberg, Castellum, Jernhusen, JM,
    NCC Property Development, Swedish Property
    Federation, Vasakronan
  • Real estate advisorsCatella Corporate Finance,
    CB Richard Ellis, Colliers International, Cushman
    Wakefield, DTZ, Equator Stockholm, Leimdörfer,
    Lundberg Partners Property Consultants, NAI
    Svefa, NewSec, Tenzing
  • Law firms
  • Ashurst, Baker McKenzie, Cederquist,
    Glimstedt, Kilpatrick Stockton, Linklaters,
    Mannheimer Swartling, MAQS, Trägårdh
    Falkenborn, Vinge
  • Other
  • Banks Eurohypo, SEB
  • Tax Accounting Ernst Young, Öhrlings
    PricewaterhouseCoopers
  • Regional investment organizationsStockholm
    Business Region, Business Region Göteborg, Invest
    in Skåne

50
ISA contact and information
ISA AND ISA PARTNERS
  • Real Estate publication available for download at
    www.isa.se/publications
  • ISA contact
  • Susanne Roglar
  • Head of the Real Estate projectTel 46 8 402
    78 13
  • susanne.roglar_at_isa.se
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