OLM Real Estate Company Analysis

In Sweden, out of 290 municipalities, 243 (85%) reported a shortage of housing. Furthermore, 196 of all municipalities which are 68% of the total, reported that this shortage is long-term. This means that of the 243 municipalities where it may be profitable to construct housing, 80% have a projected housing shortage lasting three or more years. The deficit is greatest in the metropolitan areas, though a majority of smaller municipalities are also finding it difficult to meet the demands of the market. 

The Problem in Swedish Residential Rental Market

Unlike other markets, the Swedish housing market is capable of generating billions of dollars of revenue but lacks solution providers who can swiftly and efficiently fulfill the need of the ever-growing demand.

The problem that the residential real estate rental industry in Sweden is facing today is a lack of access to capital from traditional funding channels. The industry is exceptionally capital intensive, which impedes the industry’s ability to solve the tremendous demand for accommodation that exists today. 

The money undoubtedly exists in Sweden; however, the major banks and other lending institutions have a great share of their capital already invested in the real estate sector. This capital has mostly been invested in property for sale projects of which there is currently an oversupply that has resulted in a lack of demand. 

What is OLM Real Estate?

OLM Real Estate is a company whose business model is to build, own and manage real estate assets, primarily for the residential rental housing market. It is a customer-focused and technology-oriented company that develops housing according to market needs. 

OLM Real Estate’s STO allows bridging the gap between the flexible market of cryptocurrencies and the secure, stable market of properties and housing. Even though OLM is stepping into a more digitalized world with this solution, the core of the business remains to build affordable, socially, and environmentally sustainable rental apartments financed by the STO. 

However, with the intention of further popularising cryptocurrencies in Sweden, they will establish contracts with service providers dealing in cleaning, laundry, and similar services to offer their services at discounted rates and payable by crypto. 

The key competitive advantage is that the properties will be digitally managed, with everything from rental showings, lease contracts, fault reporting and maintenance scheduling handled online. 

One of OLM’s statement says –

“Our focus will be on the development and continuous improvement of building techniques that are right for the times. We are of course aware that while we have developed a revolutionary method of building using carefully prefabricated packages, our solution also requires hard work to ensure that we do address the environmental issues, social issues and the requirements for efficient housing that will change at every site.”

SWOT-analysis

Strengths: 

  • For every completed house, the company will receive a large subsidy 
  • OLM has extensive construction experience 
  • Properties for construction are easy to come by 
  • The technical side of the construction is well-developed 
  • They are not tied to a single geographic location 

Weaknesses: 

  • They require large amounts of capital to construct the houses 
  • To grow as an organization, they need to recruit extensively 
  • They are heavily dependent on supplies that might increase in prices 

Opportunities: 

  • The demand for affordable housing has never been greater 
  • With the demand, properties are more easily available 
  • Their concept is easy to take to other countries that have a housing shortage 
  • Once production starts, OLM benefit from economies of scale 

Threats: 

  • Competitors may copy the solutions 
  • The subsidy could be slashed 
  • A market crash could lead to less spending power, making even the modest rents too high 
  • Building permits might be appealed, slowing down the administrative process 

Investment Opportunities with OLM

The OLM group boasts more than twenty-five years of experience within the construction business, allowing us to identify the solution to the massive housing shortage that is growing every day in Sweden and in many other countries. Due to the group’s proficiency with Corporate Social Responsibility and technical acumen, they are able to provide sustainability whilst also digitizing to further cut costs. 

Connecting cryptocurrencies with something as tangible as real estate is not for the faint of heart, yet it is the natural step for the market to take. It allows cryptocurrencies to be something that impacts the everyday life of people, as opposed to a quirky, if increasingly profitable, niche. Reaching the hard cap, OLM will be able to provide jobs for builders, contracts with suppliers, provide housing to thousands of people, and revitalize municipalities.