Sweden Real Estate Market Outlook 2023

The transaction market in Sweden had a challenging year in 2022 compared to the record year before. Ahead of 2023, we at CBRE are compiling trends in the various property segments and what the conditions look like going forward. We also take a deeper dive into topics such as financing and ESG, both of which continue to set the tone for the investment market going forward.

The report can be summarised in four points:

• Property investment volumes reached SEK 159 billion in 2022, down 50% from the record year of 2021, but still a better year than 2018 and 2017. CBRE expects the pace of investment in Sweden, as in other parts of the world, to pick up again in the second half of 2023.

• The Riksbank raised its key interest rate by 250 basis points in 2022, which, together with a significant amount of real estate bonds maturing over the next two years, emphasises the importance of a well-functioning financing market.

• ESG remains relevant for minimising risk in portfolios where stricter regulations are expected in the future. On a positive note, CBRE's research shows that certified office buildings generate rental premiums.

• Classic core products such as residential and office properties lost volume in 2022 in favour of higher-yielding logistics and retail. The appetite for higher returns will remain as long as interest rates are high, and many international investors remain interested in the Swedish market.