Catella property debt indicator points to market improvement

Swedish property adviser Catella’s CREDI property debt indicator has moved sharply above 50 since the start of 2013, indicating improved prospects for the property financing market in Sweden.

The indicator rose to 55.9 by March, up from 50.1 in the previous quarter. Any score above 50 indicates improved access to property financing.

Daniel Anderbring, who is in charge of CREDI, said the movement in the indicator supported other evidence that access to financing has improved thus far through 2013.

“Those banks which are active on the Swedish market are more willing to finance real estate deals than they were in 2012. In addition, a number of previously active players, primarily German banks, have once again begun to cultivate the Swedish market. We believe that their activity will increase in pace with increased interest in Sweden on the part of foreign property investors, and as competition on their core markets intensifies.”

The indicator also points to an increase in acquisition activity by listed property companies. Analysis of their balance sheets shows that they are in their best shape since the end of 2007. Their average financing costs are below 4%, and more of them are going to capital markets directly to source financing via issuing corporate bonds and covered bonds, Catella said.

To view the full March CREDI report click here: xxx

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