Sentiment remains strong but the tide of the interest rates and the credit market may be about to turn

In the October issue of CREDI, the Main index decreases slightly from 57.9 to 57.1 as corporates remain positive but the banks become more subdued.

“The CREDI Main index remains positive but shows a strong distinction between banks’ and property owners’ perception. The banks see a less favourable credit market than before, while the property owners have not noted any decline”, says Jacob Bruzelius, Head of Debt Advisory at Catella.

“There is strong investor appetite on residential, logistics and industrial properties. Transaction volumes on the office marked declined significantly during the last year. However, the office market seems to have bottomed out now as we are seeing an increase in both volumes and number of transactions in recent months. Overall, the transaction volume in the real estate market is record high”, says Arvid Lindqvist, Head of Research at Catella.

“The increase in inflation may well be temporary, but it now appears to be more protracted than previously thought, which leads to slightly higher interest rates”, says Jacob Bruzelius, Head of Debt Advisory at Catella.

“Real estate is a real asset and usually benefits from times of inflation as they act as a hedge against inflation. For example, rents for residential, public and industrial properties tend to follow when inflation rises. It is a good chance that capital will flow to all types of real assets like commodities, infrastructure, and property during coming years”, Arvid Lindqvist concludes.

The Catella Real Estate Debt Indicator (CREDI) is attached and can also be downloaded from catella.com/en/sweden/research. CREDI consists of two parts: one is an index based on a survey of listed property companies and active banks, and the other a set of indices and analyses based on publicly available data.

For further information, please contact:                                                 

Jacob Bruzelius                                 Arvid Lindqvist                                                                         
Head of Debt Advisory                      Head of Research                                                                    
08-463 32 67                                     08-463 33 04                                                                           
jacob.bruzelius@catella.se               arvid.lindqvist@catella.se                                  

Catella is a leading specialist in property investments and advisory and fund management, with operations in 13 countries. The group has over EUR 10 billion in assets under management. Catella is listed on Nasdaq Stockholm in the Mid Cap segment. Read more at catella.com.