Nordic real estate companies have been blessed with strong growth and returns since the financial crisis. Indices such as the Carnegie Real Estate index have doubled in value in the past five years. But can this performance last? House prices, which have been rising over the past six years, especially in Sweden, fell by about 10% between September 2017 and February 2018. Is this having an impact on the commercial real estate sector? What are the key drivers of real estate performance?
“Normally, I expect 10% total performance per year on my portfolio, but the average in the past five years has been 20% per year,” says Jonas Andersson, lead portfolio manager of Alfred Berg’s Fastighetsfond Norden, a fund investing in Nordic property stocks. “I target more than 10% going forward for 2018 and 2019.”