Propstreet investment insights
Anders Johansson, CEO at Fortinova
The Swedish CRE Industry provides for a unique opportunity within the residential market. Sweden has had an ever-growing housing shortage which in many aspects is a challenge for society as a whole. However, as an investor in residential real estate in Sweden we are enjoying a high demand for our product, leaving us with one of the markets highest occupancy rates, stable cash flows and an attractive risk adjusted return.
We are focusing on the residential market in Western Sweden. Western Sweden is according to us one of the most expansive areas in Sweden which facilitates an even higher demand for our apartments and commercial areas which in turn favors our objectives.
In order to be successful in the real estate market you have to know your market. That is, you can benefit from knowing the location you are Investing in. It could be a very different case weather you invest north or south of main street. It is just not enough to analyze macro, but you actually need to be a part of the local community to know where the next opportunity – or risk – might appear. We make sure that we interact with the communities and staff the organization with people that live in the communities where we are investing in.
I would say it is working with people. We can truly make a different in people’s lives. We offer space, weather it being a space where you create a family, a space where you build your business or any other space where you can pursue your dreams. We want to provide a space where people can grow so we can grow with them.
Haha, I don´t think there is just one easy way. However, never promise more than you can deliver and keep things simple. Don´t complicate things and stay true to your business plan.
I think it is interesting to see how more and more investors find their way to the residential market. It seems like the market appreciates the attributes of the Swedish residential market just as we did when we did our first investment. We have for some time seen a yield compression which seem to continue in our whole region.
The market is becoming more and more transparent and efficient. Technology makes it easier to find and analyze investment opportunities. It makes the process easier. However, as the market becomes more transparent the threshold for entering the market becomes lower which in some cases can increase the competition.
If you really want to become a first-time buyer, you have to – buy. It might sound easy but could possibly be a big decision. You can only decide if you want to go for it or not. Do not overanalyze, there are so many things that will turn out in ways you could not imagine, for better or worse. In most cases It will turn out ok so really, my advice would simply be to stop reading and go out there and create your story. Good Luck!
Propstreet investment insights
Silvia Samuelsson Waak, Owner at Fastighets AB Samuelsson & Waak
My career in the CRE industry began in 1998, a few years after my studies at the School of Business, Economics and Law at the University of Gothenburg. At that time, my sister’s private landlord was recruiting an assistant and I decided to apply for the position. But already after six months, I was offered another job in the finance department at Ericsson and was just about to sign my resignation letter. The landlord however was exceptionally keen on keeping me in the company. He believed in me and my abilities and offered me a partnership ☺
That is where my journey began and already at the age of twenty-five, I had become partner in my first commercial property, centrally located in Gothenburg (Magasinsgatan 3). During my student years, I had saved SEK 250 000, but I needed another SEK 500 000 to get a 10 % ownership. I thought I could “just” take out a mortgage on my parent’s house. Which I did – without their knowledge. (A nerve-wrecking experience, until I could pay it all back…)
My journey in the real estate industry then continued as a private owner and as a real estate manager at Fabege (2008-2014). I bought my own properties in Eriksberg, Gothenburg, and together with my sister at Telefonplan 2012 and “Whitlockska huset” 2014 (Eriksbergsgatan 8A-B in central Stockholm).
We sold Filmstaden, Solna in 2020 and are now looking for new investment opportunities.
We are looking for commercial real estate in the suburbs close to the city, with development potential. I consider having vacancies as well as other challenges, in the actual building and the neighborhood, to be opportunities. I grew up in the suburbs and enjoy working there. We are looking within Stockholm as well as in Gothenburg since I grew up in Gothenburg. The location is key, not specific segments.
I value a close relationship with our tenants. My strength is, among other things, that I personally want to see & hear what is going on in and nearby the properties and build a close relationship. This way, you minimize unforeseen events and negative surprises while discovering new development opportunities. We value personal relationships and since we are a smaller real estate company, we can act fast. Highly appreciated by many companies and not least small and medium-sized entrepreneurial ones like us.
Additionally, I am a very unpretentious person. I can assist as a substitute janitor or clean the stairwells if needed. Even though I buy these external services it is important to be present and offer support on demand. I have never put too much value in having a certain job title.
My ability to take and manage risks. Like when I was twenty-five years old and decided to “risk” all my savings and my parent´s house ☺.
We have extensive market knowledge and can therefore make decisions quickly. When an investment opportunity appears, we can complete the transaction in a week. A great challenge for other companies, but an opportunity for us.
I do not pay too much attention to trends; I have a more “traditional” approach. Our properties shall always be equipped with modern technology and suitable floor plans. There is high demand for efficient and flexible spaces. We are good listeners and flexible when it comes to different types of modifications, depending on the conditions of the property.
Modern technology is definitely needed in our industry and provides additional value to the existing businesses. For our company, new technologies and products open new possibilities to reduce operating costs, increase the value of the properties and to sign more profitable leases.
Dare to take risks. No risk, no reward. But at the same time, I would not want anyone to put their family’s savings on the line ☺ Trust your gut feeling, it has been invaluable in my career as a real estate investor. Visit and learn about the neighborhood you are going to invest in. Explore entrances, streets and take public transport there. Pay attention to movements and observe the people in the area.
Propstreet investment insights
Sofia Folstad, Head of Finance and Transactions at Studentbostäder i Norden
In February this year I joined SBS as the Head of Finance and Transactions. Prior to joining SBS I worked for four years as a Director in the Capital Markets team at Colliers. Prior to this role I spent seven years at SEB in various positions. For me working with real estate has always been an easy choice since it is an industry that is comprehensible. Outside of work I have always been interested in flipping houses/apartments and I am always looking for a new inspiring renovation project. The principle of investing in commercial real estate is the same but of course on a larger scale.
We are a pure student housing company which focuses on modern affordable housing of high quality. We are the only listed pure play student housing company in Sweden and we are currently traded on Nasdaq First North. Our real estate assets are located in Sweden and Denmark in 16 different cities across the country – from the northern to the southern part. Our main goal is to become the leading student housing company in the Nordic region.
We have a first mover advantage since we are the largest pure play student housing company in Sweden. We have built a specialized organization for student housing with a strong focus on digitalization. Since our units are usually smaller than the average rental apartment, the Tenant Associations model for the norm rent enables us to achieve higher rental levels per sqm while maintaining a low monthly rent for the student. All new development projects are sustainable and qualify for both the investment grant and energy bonus. We offer high quality, affordable student housing with a fully digitalized rental management. This in order to make the living experience seamless for our tenants. We are a fast-paced player with a clear growth agenda with the strong owners of SBB, Fastator and Amasten.
There will always be a demand for real estate. The yields might fluctuate from time to time but the population in the world is still increasing and so will the demand for real estate and long term building rights. For me the student housing segment is especially interesting since it previously has not been an established segment in the Nordics. We are a part of shaping this segment and for me it is inspiring that this change will benefit the overall society and make it possible for more students to reach their dream profession.
I think a lot has to do with having a great network of competent and experienced people around you. Also make sure to be stay curious, ask questions and try to learn as much as you can from people with experience and knowledge in your network. Knowledge that will give you the ability to recognize opportunities.
One interesting market trend is modern co-living. We have been spending a lot of time exploring how young people today prefer to live and we are adapting our business and services to meet their needs. We build smaller units which also have access to large common areas where students can socialize.
Our latest acquisition in Copenhagen is a large complex with 578 small apartments and large common areas with roof top terraces, gym, café and a grocery store.
This is something that we want to create in Stockholm as well. In our Stockholm campus, we will have over 1 200 units and are mixing student housing with co-living for young professionals. We have a total project pipeline of more than 2 000 units and are committed to generating growth to our shareholders while creating the next generation of student housing.
Technology is changing the investment landscape completely; with new digital tools and solutions the market will become more transparent and globalization will accelerate. Digital meetings have enabled us to become more efficient, meet foreign investors and look at investment opportunities outside of Sweden.
I would say that looking at the global trends is always important to keep up and stay ahead. Continuously ask yourself; how do people want to live and work in the future? Always be forward looking, identify possible blind spots and shortages in your market. Important to remember is that in the real estate business, location is key. And to play it safe, invest in a segment that are more likely to withstand a recession – like student housing.
Propstreet investment insights
Poyan Katebi, CEO at Samfastigheter
I have worked as a dedicated public servant for much of my lifetime. As a public servant my different roles varied from legal advisor to financial controller. Naturally these experiences and competences made me into the ideal CEO for Samfastigheter. Here I can play a part in solving the lack of long-term care facilities in Sweden.
My journey at Samfastigheter started when I understood that my values and vision were aligned with the company’s. Our mission is to become the foremost challenger in the field of social infrastructure. The data has shown that our combined excellence makes us the obvious choice for municipalities and private companies who want an established and experienced real estate partner.
The Swedish social infrastructure market with a focus on care homes.
Our passion is to be a highly specialized company focusing on social infrastructure with an emphasis on people with disabilities. CRE is a very competitive market and we have focused on segments that have a robust legislation and a stable demographic. Our combination of knowledge about the legislature regarding people with disabilities and the strong partnership we have with our tenants gives us a distinct advantage in comparison to our competitors.
For me personally the most inspiring part is working in an environment with supremely talented colleagues and an opportunity to create real change in the social infrastructure segments. In our chosen market we have the incentive of also assisting the municipalities.
Knowledge, financial strength and a large network. Very few people have this from the start consequently it is crucial to identify which parts of the trifecta are missing and reinforce the weak link. The easiest way is to surround yourself with people that complement you and your skillset.
The increasing interest towards social infrastructure and how the market will progress post-pandemic. I forecast an increased focus in the market with a widening of the definition of social infrastructure. After every big crisis there will always be new stakeholders that enters the market, I am very eager to see how the influx will affect the CRE as a whole and what spillover effects that will have on the social infrastructure segment.
The real estate industry is brimming full of potential since it is long been a very low-tech market. From our perspective the biggest challenge will be to add useful technology (digitalization) that adds value without invading of our tenant’s privacy. There are many start-ups that have developed remarkable products, but I think the winner will be the company that will be able to gather and collect the best start-ups under one umbrella and unleash their true potential, the best example I can think of is Hydda Group.
Much of today’s technology is only focused on the benefits of the property owners. For there to be real change and a shift towards prop-tech, the technology used in CRE have to have a more holistic approach. It will be essential to create value for the entire ecosystem. A company that are trailblazers in this field are Botello with their tenants first approach.
There is nothing that beats experience, find out what is the best standard practice in your preferred market. Try to learn from experts and find out how they started their journey in the field.
One last piece of advice would be to look for deals that the larger real estate companies have ignored because of the size or difficulty.
In March 2020, we conducted a survey sent to selected community members in the Nordic region. The results provided an interesting insight into how the Nordic CRE sector might be affected by the COVID-19 outbreak.
Two months later, at the end of May 2020, we decided to perform yet another survey to monitor any changes in attitude and expectations for the future among investors and brokers.
Due to the recent outbreak of covid-19 disease, we know that many of our community members are facing uncertainty and drastically changed market conditions. We believe that up-to-date information and the use of digital tools will mitigate some of the adverse effects on our economy.
The professional knowledge our members have on the current situation in the Nordic real estate market is valuable. On Friday the 20th of March 2020, we conducted a survey sent to selected community members in the Nordic region.
The results provide an interesting insight into how the Nordic commercial real estate sector might be affected by the recent development.