Given the low interest rates offered by the Scandinavian country, Swedish investors are forced to look for new assets in which to invest their assets. Due to the natural wealth that the country has, investors have focused their attention on its nature reserves, which have become the most attractive investment alternative.
Swedish forests have become the biggest investment attraction for investors who see other investment alternatives available to them continuing to weaken with the interest rate cuts implemented by the RiskBank (the Swedish Central Bank) in 2014.
Sweden, like Norway and the rest of the Nordic countries, has always been part of a select group of the world’s most developed countries. Its good economic management and natural wealth have always positioned the country at the top of the ranking.
Its large oil reserves and the vast forests it owns have become a source of wealth that, in the case of Sweden, has become part of the country’s investment assets, increasing their value by 7%.
Having money in the bank or in Swedish government debt has lost its attractiveness for Swedes, as the returns they receive are very low, and in some cases zero. For this reason, Swedish investors have started to invest their savings in forests, leaving aside traditional investment alternatives. Investments in forests, which some investors have already begun to call “Sweden’s green gold”.
Since the end of last year, when the price per square meter of forest was 398 kronor (41.7 euros), the price has risen by more than 7%, reaching 419 kronor per square meter (44 euros).
The main reasons for this price increase were undoubtedly the low interest rates offered by the Swedish country. In addition, the financial portal Bloomberg added that the large owners of these forests are usually investors who have very low debt ratios and take advantage of the opportunity to borrow from banks and continue to increase their holdings by buying more land.
Land of big investors
As we have already mentioned, Sweden is a country where large companies and large investors have been focusing on acquiring forests and forest land.
Companies that are involved in the stationery sector, such as Svenska Cellulosa, or groups such as Ikea and Sveaskog that sell furniture and wood, have become leaders in this market. Despite these large groups, Sweden also has small owners who own forest land, with about 330,000 small owners owning land in what could be one of Sweden’s new golden miles or rural Swedish Beverly Hills.
According to Marcus Helin, Director of Real Estate Market at LRF Konsult, he believes that the new “green gold” has a long way to go and that it is expected to attract many new investors from all over the world as well as Swedes They want to increase their forest areas and invest in their forests, taking advantage of the priority they rightfully have as national investors.
Despite this, many pages specializing in buying and selling this type of land in Sweden emphasize that buying forest land in the Nordic country is not a difficult task. In addition, the low supply of properties located near Swedish metropolitan areas and the high price of them have made those interested in obtaining land in this country choose to look for them in rural areas where there are many forests.
Some may think that Sweden is wasting a unique investment opportunity that they could have used for themselves and exporting it to potential foreign buyers who could harm the ecosystem of the beautiful Nordic country.
To do this, Sweden is responsible for classifying forest land into plots that qualify the land according to its quality and fertility.
Forest plots that are up for sale and sold are usually plots where certain tree species have been planted to benefit from the timber of those same trees. In other words, few, or in some cases none, of these forests are usually primary forests.
This means that the country can attract foreign investors, thereby increasing FDI (foreign direct investment), but at the same time, preserve its core primary forests and its forest ecosystem. A great solution for Sweden, which could become the new rural Dubai.