Akelius, Sweden’s largest private housing company, has appointed CBRE to create one of the UK’s largest rental portfolios. It plans to invest £2bn. Here we interview UK managing director Lars Lindfors
What is your strategy?
We plan to buy residential properties with good cash flow in London and the South East for the long term. We are looking for a 4.5-5% initial net yield. Our intention is to take the company up to 10,000 flats in five years in the UK. We will upgrade properties to a very good standard – called Akelius Living – and have already started to fully upgrade the properties we have bought.
How are you funding the expansion?
We are beginning by using our own funds. We think it is important to show the market that we have a strong financial capacity and can buy without the help of the banks. We have done that in the first three deals. Later on, we will discuss with the banks the opportunity to acquire some further funding.
Why are you expanding in the UK?
Regulation in the UK market is much freer than in Sweden. We also see a window of opportunity where people start to move from buying properties to renting because they are finding it more difficult to obtain mortgages. We will try to show that our product is valuable and an easy way of living. We strongly believe in the long-term market and in the UK economy. For the moment, it may be a little knocked down, but this is temporary and it will come back. We also do not want to be too big in Sweden, Germany
or the UK but to spread the risk a little between the countries.
Do you have more deals in the pipeline?
We have a couple of good options in the centre of London and also further out. We have around 700 units in the UK and, if possible, I’d like to go up to 1,000 this year.
Which vendors are you approaching?
My idea was to find some of the big companies. The tricky part is to find small block owners where we can also be a good buyer. In Sweden, we have bought a lot of properties from the municipalities. That could be a big possibility here in the UK.
What is your outlook for the UK residential market?
There will be a more conservative capital growth of between 2% and 5%, depending on location, over the next five years. I also think the market will go more and more from owner-occupied to renting.
Why did you start a career in property?
I started as a banker in the 1980s. During the financial crisis in the early 1990s, I was employed at Mandamus, the real estate company where Swedbank put its bad property debts. When Akelius bought Mandamus in 2003, I moved over as well and became regional manager for two regions in Sweden.
What career would you have pursued had you not gone into property?
I would probably have stayed in banking. The atmosphere of working in the banking sector and real estate is very exciting. You create something for society and you do something that you can see.
How would you describe yourself?
I like to explore, I’m extremely stubborn and, if I put up a goal, I go for it. I’m also determined.
