Foreign direct investments into Swedish Real Estate during the period of 2008-2013

Sammanfattning: Financial crisis of 2008 became critical period for Swedish economy and its real estate market. During this period Sweden has experienced sharp decrease in transaction volumes. However compare to other EU and global markets, Sweden managed to perform remarkably well and economic recovery has taken place since 2010. The purpose of this master thesis is to outline general trends in the development of Swedish Real Estate market for FDI in the period of 2008-2013 and provide better understanding of foreign investors behavior and the incentives attracted them to invest in Sweden. The deductive approach has been used based on the previous studies and theory. The quantitative data was obtained from scientific and media sources, while qualitative empirical data relies on survey filled in by real estate consultancy companies operating on Swedish market. Research focuses on the analysis of overall market situation and changes occurred during the 5-year period concerning micro/macro economical issues, behavioral factors, country characteristics, business environment, global trends, investors’ behavior and expectations. Theoretical basis for the research is an overview of previous FDI theories. The results reveal that by the end of 5 year period, the situation on the market became much more favorable with strong recovery as for the end of 2013. Compare to after crisis 2009, when foreign transactions volumes were down to 45 bn sek versus 157 bn sek in 2008, the full year transaction volume 2013 was SEK 99 bn which is in line with 15 year historic average. In 2013 international investment share is amounted to 12%, the most active are institutional investors from Norway, Finland, UK, Germany and US. Overall foreign investors are willing to operate on Swedish market in the future, searching for high yields at low risk levels within safe, transparent and liquid, highly developed business environment with good economical and politically stable regimes. However difficulties with accessing finance and lack of prime quality assets on the market became the main drawbacks for foreign investors on the Swedish market during last years.