Savills latest Sweden investment research reports that total transaction volumes year to date increased 32% from the same period last year to total SEK 90 billion compared to SEK 68 billion in 2013. The turnover in Q3 2014 recorded SEK 24 billion, which is an 11% increase on SEK 22 billion in 2013. 

Fredrik Ostberg, head of investment at Savills Sweden, comments: "Not only have we seen a marked increase in transaction volumes but additionally the general transaction number has picked up by 25% year on year. Both are good indications of the very high interest in the Swedish market from all types of investors."

Savills finds that cross border activity in the first three quarters of 2014 amounted to approximately 38% of all transactions compared to 44% for the full year in 2013. Norwegian, UK and US investors have all been active in the market so far this year. However, domestic investors still dominated, often outbidding international competition.

Peter Wiman, head of research at Savills Sweden, adds: "With bond yields at low levels, exposure to property by domestic institutions has risen as they chase higher returns and are therefore supplying more equity to the market."

Due to the competitiveness of the market prime yields have continued to remain stable and secondary have moved out, according to Savills. Whilst investors focus primarily on Stockholm, Gothenburg and Malmo the shortage of products on the market has led to a wider interest for secondary assets and thus secondary yields have also started to harden.

Fredrik continues: "We predict that with supply decreasing and competition remaining fierce we will continue to see compression of secondary yields with a further reduced gap between prime and secondary."

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