Sweden rejects calls to intervene in shaky commercial property sector, ET RealEstate

June 24, 2023

STOCKHOLM: Sweden does not plan to intervene in the commercial property sector, which has been shaken by worries over debt levels and rising interest rates, Financial Markets Minister Niklas Wykman said in parliament on Friday.

His comments were made during an emergency debate about commercial real estate firm SBB which owns a wide portfolio of previously public property – like government offices – and has been forced to seek a buyer after running into financial trouble.

“That we would nationalise for the sake of nationalising or that we create tools for the state where we could … go in and meddle and add more risk, I think there is a broad agreement here not to act in this way,” he said.

However, Wykman said the government was ready to act if the banking system was threatened.

“This government will always act to preserve financial stability, to preserve tax-payers money and to protect important interests, for example Sweden’s security,” he said.

Concerns around the commercial real estate sector centre on SBB, but rock-bottom interest rates in recent years encouraged many property firms to pile on debt.

Some have been caught out as central banks have tightened policy at a record pace to fight inflation, leading to worries that the banking system could be threatened.

SBB’s properties include social housing, schools, hospitals, police stations and an army facility. Several politicians during the debate called on the government to take key properties back into public ownership.

Wykman rejected those calls.

“Proposals that could be seen as forced-purchases are not in Sweden’s interest,” he said. “What this market needs is as much peace and quiet as possible in order to be able to sort out the problems that exist.”

  • Published On Jun 17, 2023 at 07:00 PM IST

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