Following research by the Evanridge Properties into European property markets and based also on its prior experience in the field, Evanridge considers that the Sweden represents an attractive opportunity to gain exposure to a major European property market, despite the current international economic instability.
The Fund offers investors an asset‐backed investment, exhibiting significantly less perceived risk than other comparable property investments offering comparable returns.
Evanridge believes that the Swedish property market represents an attractive opportunity to benefit from the potential future economic growth in the Baltic Sea region, and offers significant opportunity for continued increases in property values for the following reasons:
• A politically stable and strongly performing economy which has delivered significant GDP growth and
is well positioned for future economic outperformance.
• Low unemployment and household debt servicing costs combined with reductions in property, wealth and income taxes are leading to increasing levels of property affordability.
• A shortage of rental property and increasing demand combined with proposed reforms to the regulated rental system offer the potential for above inflation rental growth.
• Subdued development activity, due to low prices, means property values will need to rise significantly before development takes place to satisfy growing demand.
• Swedish property yields at 5% to 8% compare favorably with circa 3% to 5% for Swedish equities and government bonds, offering scope for future yield compression and increased property values.
• A large rental market combined with low vacancy rates and low rates of tenant turnover provides secure, inflation adjusted, income flows facilitating the efficient use of bank finance to enhance investment returns.
The combination of these solid property market investment fundamentals, together with the strength of Swedish financial institutions, suggests that Sweden is one of the few countries to offer investors a relatively safe port in the current financial storm.
Evanridge Properties has an established network of partners in Sweden, which includes Hammar Nordic AB, (www.hammarnordic.se) a property management and consultancy company with extensive experience of the Swedish real estate market. Hammar Nordic AB will assist in the acquisition and subsequent management of the Fund’s property portfolio, with a clear remit to maximise investor returns.