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TOURISM TOURISM “SWEDISH STYLE"“SWEDISH STYLE"

Tourism “Swedish style” – why does the country attract so many tourists as well as investors?

Elena Zanlorenzi, Head of ResearchEuropean R&D Office

REAG

26.06.2009Stockholm, Sweden

INDEX

4. LEISURE PROJECTS IN PIPELINE4. LEISURE PROJECTS IN PIPELINE

2. INVESTMENT 2. INVESTMENT

3. TOURISM3. TOURISM

1. SWEDEN - A MIDSUMMER NIGHT’S DREAM1. SWEDEN - A MIDSUMMER NIGHT’S DREAM

1. SWEDEN – A MIDSUMMER NIGHT’S DREAM1. SWEDEN – A MIDSUMMER NIGHT’S DREAM

What comes to one’s mind when people think of Sweden?

• Vikings

• Nordic Skiing

• ABBA

• IKEA

• Ingmar Bergman

• Pippi Longstocking

• Social equality

• High standard of living

• Volvo

• Excellent alternative energy programs

• Cell phones

• Midnight sun

• Highly developed technology

• Crisp bread

• Traditional red houses

• H&M

• Vikings

• Nordic Skiing

• ABBA

• IKEA

• Ingmar Bergman

• Pippi Longstocking

• Social equality

• High standard of living

• Volvo

• Excellent alternative energy programs

• Cell phones

• Midnight sun

• Highly developed technology

• Crisp bread

• Traditional red houses

• H&M

1. SWEDEN – A MIDSUMMER NIGHT’S DREAM1. SWEDEN – A MIDSUMMER NIGHT’S DREAM

Outstanding accomodations

The Swedish hotel sector offers a wide range of unique accommodation styles

that bring the country to be considered an unforgettable vacation. Its

outstanding ideas of lodging can easily compete with most prime locations in

the whole world.

• Ice-hotel

• Underwater hotel

• Tree-house

• Jumbo-jet hostel

• Authentic 19th century prison

• Monastery from 1420

• Floating hotel

• Historic underground silvermine

• Traditional forest hut in the woods

• Lighthouse

• Several castles

• A hotel with en-suite ice fishing and a view to the northern lights

• Ice-hotel

• Underwater hotel

• Tree-house

• Jumbo-jet hostel

• Authentic 19th century prison

• Monastery from 1420

• Floating hotel

• Historic underground silvermine

• Traditional forest hut in the woods

• Lighthouse

• Several castles

• A hotel with en-suite ice fishing and a view to the northern lights

2. INVESTMENT2. INVESTMENT

Gateway to invest in Scandinavia

The Scandinavian property market comprises stable countries with sizeable

investment markets, high liquidity and transparency.

Sweden, the largest country, is the natural base for investment in the region.

Stockholm is the natural hub of Scandinavia, thanks to its financial centre

and its reputation to have the most culture offerings per capita in the world.

The Scandinavian property market comprises stable countries with sizeable

investment markets, high liquidity and transparency.

Sweden, the largest country, is the natural base for investment in the region.

Stockholm is the natural hub of Scandinavia, thanks to its financial centre

and its reputation to have the most culture offerings per capita in the world.

Voices about Sweden:

• “EU’s most innovative nation”;

• “Most interesting country for FDI”;

• “The world’s most networked economy”;

• “On top-3 list for international trade”;

• “A world competitiveness leader”.

Voices about Sweden:

• “EU’s most innovative nation”;

• “Most interesting country for FDI”;

• “The world’s most networked economy”;

• “On top-3 list for international trade”;

• “A world competitiveness leader”.


Four of Europe’s ten most innovative regions are Swedish;

Europe’s 3rd-largest real estate investment market in 2008;

Europe’s 5th-largest cross-border investment location;

Total real estate investment reached € 13.6 billion in 2008;

Investment by international players fell by 47% to € 3.9 billion;

Opportunistic investors left the market but national institutional investors

ensure high liquidity even in difficult times;

Investment focus towards Stockholm, Goeteborg and Malmoe;

Some € 30 billion is being invested in strategic city development and

infrastructure projects in the Stockholm region (until 2030).

Overview


Direct property investment volume in Scandinavia and cross-borderinvestment in Sweden

Source: REAG work-out on different sourcesSource: REAG work-out on different sources

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sweden Norway Denmark Finland

bil

lion

€

Cross-border investment by origin in Sweden 2008

18%

14%

13%12%

11%

8%

6%

18%

Denmark France Norway US Netherlands Germany Australia Other


European comparison of real estate investment volume by city and country

2,063Berlin

2,610Moscow

3,081Stockholm

3,696Madrid

1,831Munich

1,605Hamburg

1,577Brussels

1,960

8,499

11,402

Volume in

€ billion

Copenhagen

Paris

London

Top 10 European cities


Largest European investment markets by total transactions 2008

23%

18%

10%

6%

5%

4%3%

19%

UK Germany Sweden France Netherlands Spain Norway Finland Others

12%


Investment by investor type and destination


Investment by destination in Sweden 2008

60%15%

11%

4% 1%9%

Office Residential Retail Industrial Hotel Other

Investment by investor type in Sweden 2008

39%

17%14%

12%

18%

Institutional investors Property funds Private property companies

Listed property companies Other


Why Sweden?

Use of Standards

(IFRS)

Use of Standards

(IFRS)

High transparancy

High transparancy

Short lead times to deal conclusions

Short lead times to deal conclusions

Simplehandling of mortgages

Simplehandling of mortgages

Documentation is in English

Documentation is in English

Low costs for transferring

assets

Low costs for transferring

assets

High quality of local

advisors

High quality of local

advisors

Key features:

• Smooth and reliable transaction process;

• Easy access to extensive and reliable market

information;

• Uncomplicated taxation structure;

• Minimal transaction risks;

• The legal system is well-suited for cross-border

property investments.

Key features:

• Smooth and reliable transaction process;

• Easy access to extensive and reliable market

information;

• Uncomplicated taxation structure;

• Minimal transaction risks;

• The legal system is well-suited for cross-border

property investments.


Swedish tourism has grown steadily for the past decade and is one of the

fastest growing industries in Sweden;

Since 2002, Sweden’s international tourism revenues more than doubled;

Visitor volumes increased faster than the European average;

The Swedish tourism industry grew to a total turnover of € 20.4 billion in

2008, an annual increase by 10%, while foreign tourists expenditure in

Sweden raised by almost 20% to € 7.1 billion;

Swedish municipalities are printing 4-colored marketing brochures for € 75.9

million a year;

Sweden is investing in tourism development all over the country - everything

from building the worlds biggest wooden moose to indoor rapids, restored

viking villages and witch hotels.

Overview


International comparison of tourism industry’s percentage of GDP and share of national GDP of some Swedish industries

Tourism has a lower impact on the Swedish economy compared to other

countries with a fluctuation between 2.6% and 2.9% from 1995 until now. This

shows though that the tourism industry’s share remains relatively constant.

Tourism has a lower impact on the Swedish economy compared to other

countries with a fluctuation between 2.6% and 2.9% from 1995 until now. This

shows though that the tourism industry’s share remains relatively constant.

Source: Nutek SCB & ETCSource: Nutek SCB & ETC

2.2

2.3

2.4

2.8

3.2

3.5

4.0

4.7

6.4

6.5

11.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0

USA

Canada

Finland

Denmark

Germany

Netherlands

Ireland

Norway

France

Austria

Spain

%

2.9Sweden

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

electricity, gas,heating, w ater

travel and tourism agriculture, forestry,f ishing

mineral mining

%


Tourism industry in brief (annual variation)

Total number of international nights spent: up 2.3%, from which is

- Europe (without Scandinavia): up 1.0%

- Scandinavia (without Sweden): up 2.4%

- Sweden: up 2.0%

- Non-European countries: up 6.4%

Total turnover of the travel industry grew by over 10%;

Since 1993, the total number of nights spent has grown by almost 60%;

Since 1995, the tourism industry has supplied about 50,000 new full-time

jobs (47% growth);

In Stockholm, hotel guests spent on average € 210 per day, while

business travellers spent on average € 265 per day in 2008.


Annual tourism data in Scandinavia

Source: OECD, IkanenSource: OECD, Ikanen

tourist nights spent

33.5%

22.5%

16.0%

28.0%

Sw eden Norw ay Finland Denmark

tourist arrivals

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Sweden Norway Finland Denmark

tho

usa

nd

s

35%

6%


Nights spent from abroad and type of accommodation in Sweden

Source: Nutek SCBSource: Nutek SCB

0 500 1,000 1,500 2,000 2,500 3,000

China

Poland

Spain

Russia

Switzerland

France

Italy

Finland

USA

UK

Netherlands

Denmark

Germany

Norway

thousands

type of accomodation

52%

hotels holliday villages youth hostels camp sites

7%


Tourism turnover and consumption

Total turnover in the Swedish tourism industry has increased by over 90%

at current prices since 1995;

Domestic tourism consumption in Sweden has increased by 65% in the

same time;

Foreign visitor’s consumption in Sweden has increased by 165%.

Swedish leisure travellers account for over 2/3 of total domestic tourism

consumption.

Source: Nutek SCBSource: Nutek SCB

participation of total turnover in the Swedish tourism industry

45%

35%

domestic leisure travellers domestic business travellers foreign visitors

20%


Top 5 counties by number of nights spent (left) and accommodationrevenue (right)

Stockholm 19.2%

Stockholm 19.2%

Vaestra Goetaland 16.2%


Skane 9.6%

Skane 9.6%

Dalarna 7.8%

Dalarna 7.8%

Kalmar5.4%

Kalmar5.4%

Stockholm 32.6%

Stockholm 32.6%

Skane 9.8%

Skane 9.8%

Dalarna 4.3%

Dalarna 4.3%

Norrbotten3.5%

Norrbotten3.5%



Forecast:

• WTO predicts a 12% global increase in international travelling until 2010 and

73% up until 2020;

• For Europe, until 2010 there will be an increase of 10% and 50% until 2020;

• Sweden is outperforming Europe and is following international trends.

Forecast:

• WTO predicts a 12% global increase in international travelling until 2010 and

73% up until 2020;

• For Europe, until 2010 there will be an increase of 10% and 50% until 2020;

• Sweden is outperforming Europe and is following international trends.


Major hotel transactions in Scandinavia – single asset transactions

Source: HVS (2007 – 2008)Source: HVS (2007 – 2008)

Property Location Rooms Sale price in €

Buyer Investor type

Sokos Hotel Helsinki

Finland 202 42,000,000 Exilion Capital

Finnish real estate equity fund

Copenhagen Marriott

Denmark 395 63,000,000 Blackstone Group

International private equity company

Rica Hotel Bodo Norway 113 10,730,580 Norgani Hotels ASA

Norwegian public hotel property company

Clarion Collection Hotel Bastion

Norway 99 16,176,256 Norgani Hotels ASA


Quality Hotel Mastemyr

Norway 152 17,500,000 Home Properties AB

Swedish public hotel property company

Park Inn Oslo Norway 118 21,990,000 Norgani Hotels ASA


Radisson SAS Hotel

Sweden 91 11,037,295 Warimpex Austrian public investment company


Major hotel transactions in Scandinavia – portfolio transactions

Source: HVS (2007 – 2008)Source: HVS (2007 – 2008)

Properties Location Rooms (Number of properties)

Sale price in €

Buyer Investor type

Northern European Properties Portfolio

Sweden 6,477 (39) 805,000,000 CapMan Danish private equity company

Best Western & Quality Park Hotel

Sweden 375 (2) 13,700,000 Pandox AB Swedish public investment company

Norgani Hotels Scandinavia 12,488 (73) 87,454,500 Norwegian Property ASA

Norwegian public investment company

Remmen Hotels Denmark 367 (3) 100,000,000 Nordic Partners

Icelandic private investment company


The travel industry offers a range of investment opportunities for:

- hotel owners and operators

- theme park operators

- service and infrastructure providers

Potential exists both in cities as well as in the countryside;

There is a real potential for foreign investors on the Stockholm hotel

scene, especially as Stockholm continues to grow as a tourist destination;

Currently, there are few economy class hotel chains established in the

Swedish capital and there are opportunities for more players on the

Stockholm hotel and leisure scene;

Its location, reliability and affordability has developed Stockholm also into

a popular meeting and conference destination.

Opportunities


Interesting investments coming up

Stockholm: Waterfront Complex

Upplands Vaesby: VillundaparkenStockholm: Hagelby Experience Park

Solna: Arena City

Stockholm: ABBA Museum

Upplands Vaesby: Infra City

Uppsala: Travel Center

Stockholm: Ullna Ski Resort

THANK YOU FOR YOUR ATTENTION!

for any other info, please contact

[email protected]

No part of this presentation may be reproduced or trasmitted in any form or by any means,

whitout written permission of REAG (Real Estate Advisory Group S.p.A.). For any information

please contact:

[email protected]

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