Akershus Eiendom
The Norwegian Commercial Property Market
Market Report Autumn 2016
Autumn 2016
The Norwegian Commercial Property Market
This market report is intended to provide an overview of the Norwegian property market. The report highlights important trends and gives specific examples of transactions in the leasing and investment markets, important new property developments, etc. This report is intended for general information and is based upon our own material which we believe to be reliable or material supplied to us. Whilst every effort has been made to ensure its accuracy and completeness, we cannot offer any guarantee that factual errors may not have occurred. Akershus Eiendom takes no responsibility for any damages or loss incurred owing to the inaccuracy or incorrectness of this report. This report was last edited on September 21st, 2016. For further information please contact Akershus Eiendom AS. Comments, suggestions or questions regarding the contents and presentation of this report are welcome at research@akershuseiendom.no
Table of Contents
06
Main Points
08
Macro Economics The Norwegian Economy
12 14 18 22 26
The Oslo Office Market Overview of the Market Rent Levels Survey of tenants relocating Vacancy Development
32
The Investment Market
36
Regional Property Markets
42
International Office Markets
46
The Retail Market
50
The Hotel Market
54
The Logistic Market
58
The Residential Market
61
Definitions
62
Akershus Eiendom
Main Points
6
Main Points
• GDP growth for Norway in 2016 appears to become close to 1 %. Recent economic data point to a growth of 2.1 % for 2017, and most economists now agree the economy has “bottomed out” and further interest rate reductions are unlikely.
• Oslo office vacancy was at 7.5 % in J anuary and declined to 7.25 % by July. The low construction volume and a forecasted improvement in economic growth will bring vacancy below 6 % during the next two years.
• The Norwegian retail volume has been flat for 2016, but consumer confidence is inching upwards. The retail transaction market is less active in terms of volume compared to 2015, but the deals are at a price level as expected.
• Office rents in most of Oslo have been mostly flat throughout 2016, except for a small decline in the western fringe. We expect rents to start rising in 2017.
• As of September, the 2016 transaction volume stands at 40 bNOK, less than 60 % of the comparable volume of 2015; however, the number of deals is marginally higher. We expect a very busy 4th quarter.
• The hotel market has exceeded expectations and is heading towards a new record, mainly fuelled by the low value of the Norwegian Krone. However, many new hotels on the market keeps RevPAR rather low.
• Our prime yield estimate was reduced to 4.0 % in the second quarter. The strong international interest for prime Oslo office is the main cause of this reduction.
• The logistics leasing market is relatively unchanged since our last report. A number of new developments are launched, all of them with signed leases. Yields have followed office yields slightly downwards, to a prime level of 5.5 %.
• Our annual survey of office space trends for the relocating tenants show a decline in the demand for space among tenants on the move. Otherwise, trends are mostly like previous years and confirm a limited effect from the decline in the oil industry. • There will be few new office buildings in Oslo for the years 2016-2017, and we expect volumes to rise significantly for both 2018 and 2019 due to lack of high- quality space. Strong residential prices point to an ever-higher level of conversion and demolition of older office buildings.
• In the secondary cities Stavanger, Bergen and Trondheim, sales volumes have kept their pace from last year, and yields are stable or lower. Office leasing markets have weaker development, especially in the city fringes.
• The sales volume of new homes is breaking all records since the 1980s and price growth is accelerating, especially in Oslo. This is mainly caused by the low interest rates and the focus of small investors who buy single homes for letting out.
Macro Economics
8
The Norwegian Economy
According to Statistics Norway (ssb), the Norwegian mainland economy expanded by 1.1 % in 2015. This is the lowest growth since the global financial crisis in 2009. For 2016, it is estimated that GDP will grow with 0.9 %. The growth has been revised down from a 1.8 % estimate in mid-2015. 2017 GDP growth is forecasted to be higher, at 2.1 %.
Norwegian unemployment has experienced an expected increase in 2015, coming from a very low level. The level of unemployed (AKU) in May 2016 was 4.7 % that means that 131,000 people was unemployed, whilst 2 years earlier in 2014 it was 44,000 less people unemployed, which was about the time when the unemployment in Norway started to rise.
Traditional export growth is estimated at 5.8 % in 2015. Expected traditional export growth for 2016 and 2017 is -1.4 % and 3.3 % respectively.
Nominal wages are expected to increase by 2.5 % in 2016 and 2.8 % in 2017, estimates from DNB. Last year’s increase was 2.7 %.
The 2015 household savings rate was 9.1 %, whilst the estimate for 2016 is 8.9 %. The growth rate in household debt was 6.3 % year over year in 2015, which is higher than income growth (see below). According to ssb, residential prices are expected to rise by 4.4 % in 2016 from a 6.1 % rise in 2015. The decline in oil investments in 2015 is estimated by ssb to 15 % and 14 % decline in 2016. DNBs forecasts a decline of 10 % in 2017.
cpi adjusted for tax changes and excluding energy products (CPI-ATE) were in A ugust 3.3 % and cpi before adjustments 4.0 % as well. Oslo Stock Exchange (OSEBX) has so far in 2016 (mid-September) increased with 1 %. As of mid-September, the latest data available show a slightly improved economy compared to most indicators from before the summer. Specifically, the activity in traditional export industries, and in the construction sector, have exceeded expectations somewhat. This points to a stronger GDP growth in 2017.
Macro Economics
01
Key Economic Indicators Gross domestic product GDP mainland Norway Consumption in households etc. General government consumption Gross fixed investment Exports Crude oil and natural gas Traditional goods Imports Traditional goods
9
Level NOKm 2015 3 117 433 2 620 035 1 272 611 727 292 729 601 1 165 481 448 712 371 622 996 342 581 015
Prices CPI CPI-ATE Housing Prices Employment Unemployment rate (% of work force) Employed persons (percentage change) Participation rate (level) Interest rates 10-year Government Bond rate (%) Money market rate (level) (3M NIBOR)
3,5 2 744
5. sep. 2016 1,25 1,10
Annual Change (%) 2014 2015* 2016F 1,9 1,6 0,8 2,2 1,1 0,9 1,9 2,1 1,9 2,7 2,1 2,6 -0,7 -3,8 -1,7 3,1 3,7 -0,1 2,7 3,2 0,6 3,1 5,8 -1,4 2,4 1,6 0,8 2,1 1,9 -0,6
2011 1,0 1,9 2,3 1,0 7,4 -0,8 -5,6 -0,1 4,0 4,6
2012 2,7 3,8 3,5 1,6 7,6 1,4 0,5 -0,2 3,1 2,6
2013 1,0 2,3 2,7 1,0 6,3 -1,7 -5,5 1,3 4,9 2,3
2017F 1,6 2,1 2,0 1,9 2,4 1,2 -1,0 3,3 2,3 2,5
2018F 1,7 2,2 2,4 1,8 3,1 1,7 -1,0 4,4 3,5 3,6
2019F 1,7 2,2 2,6 1,8 2,4 1,9 -0,8 4,3 3,6 3,8
1,2 0,9 8,0
0,8 1,2 6,7
2,1 1,6 4,0
2,0 2,4 2,7
2,1 2,7 6,1
3,4 3,0 7,1
2,0 1,9 5,4
2,1 2,0 2,6
2,0 1,8 2,5
3,3 1,0 71,4
3,2 1,8 71,5
3,5 1,0 71,2
3,5 1,1 71,0
4,4 1,4 71,2
4,7 0,4 70,4
4,5 0,5 70,2
4,3 0,9 70,3
4,3 0,7 70,3
3,73 2,9
2,51 2,2
2,13 1,8
3,00 1,7
1,48 1,3
1,12 1,0
1,0
1,0
1,2
Source: Statistics Norway As of September 2016
Macro Economics
02
Key Interest Rates 2003–2016
10
9% 8% 7% 6% 5% 4% 3% 2% 1%
3.5%
Jul 16
Jul 15
Jan 16
2.1%
2.9%
2% 1.0%
0.7%
0.7% -0.2%
0.5%
1.1% -0.5%
1.1%
1.5%
1.3% 0.5%
0.4%
1 600
-1.2%
0.6%
0.9%
2.0%
2.7%
0.3%
1 800
0.7%
2 200
3%
1.7%
1.9%
2 400
2 000
4%
-0.5%
2 600
2 800
3.3%
Norway 1993–2019E
Change, % 4.1%
Change in Total Employment
3 000
Jul 14
Source: DNB Markets
Employees, thousands
1%
0%
1 400 -1% 1 200 -2%
National employment change %, right axis Employment change %, SSB forecast 10 year Total employed Norway, thousands, left axis Total employed, SSB forecast
Source: Statistics Norway
2019E
2018E
2017E
2016E
2015
2014
2012
2013
2011
2010
2009
2008
2007
2006
2005
2004
2002
2003
2001
1999
2000
1997
1998
1996
1995
1994
1 000 1993
03
Jan 15
Jul 13
Jan 14
Jul 12
NIBOR 3 months SWAP 10 years 10 year Gov. Bond Norges Bank, Sight deposit rate
Jan 13
Jul 11
Jan 12
Jan 11
Jul 10
Jul 09
Jan 10
Jul 08
Jan 09
Jul 07
Jan 08
Jul 06
Jan 07
Jul 05
Jan 06
Jul 04
Jan 05
Jul 03
Jan 04
Jan 03
0%
USD/NOK EUR/NOK
Source: Norges Bank
Jul 16
Jan 16
Jul 15
Jan 15
Jul 14
Jan 14
Jul 13
Oslo Stock Exchange (OSEBX) London Stock Exchange (FTSE 100)
Jan 13
Jul 12
Jan 12
Jul 11
Jan 11
Jul 10
Jan 10
Jul 09
Jan 09
Jul 08
Jan 08
Jul 07
Jan 07
Exchange Rates 2005–2016
Jul 06
Jul 05
Jul 16
Jan 16
Jul 15
Jan 15
Jul 14
Jan 14
Jul 13
Jan 13
Jul 12
Jan 12
Jul 11
Jan 11
Jul 10
Jan 10
Jul 09
Jan 09
Jul 08
Jan 08
Jul 07
Jan 07
Jul 06
Jan 06
300
Jul 04
Index, 2004 = 100
Jan 05
400
Jul 05
05
Main Indices Oslo and London 2004–2016
Jan 06
Jan 04
04
Jan 05
Macro Economics 11
350
250
200
150
100
50
Source: Yahoo Finance/Oslo Børs
150
Index, 2005 = 100 140
130
120
110
100
90
80
The Oslo Office Market
12
Overview of the Market
The Oslo office building stock, including Lysaker/Fornebu, today stands at around 8.6 million m2. Of the total volume, roughly 3.3 million m2 are situated within the city centre. The city centre office areas are marked in the map as seven areas/circles, from Solli Plass in the west to Bjørvika in the east. Since 2007, the city centre has seen major urban redevelopment. Two new neighbourhoods at the waterfront, Tjuvholmen and Bjørvika, have been developed to become mixed residential and commercial areas. Bjørvika still has p otential for further large development projects, and in the longer term, Filipstad just west of Tjuvholmen will be available for massive commercial and r esidential development. Generally, Oslo has a great deal of urban sprawl, and the built-up area covers significant land areas compared to its population size. Most of the office building stock is concentrated in densely built areas, and this is visible in the map. Office zones outside the Central Business District are
generally found along the outer ring road from Lysaker through Nydalen, Økern and Helsfyr-Bryn to Ryen. All areas have seen new development over the last 10 years, and Fornebu and Nydalen have seen the highest activity. The area between the cbd and the outer ring road (in the map, seen as the Inner city West, North and East) is m ostly in use for r esidential, education and retail purposes. The west of Oslo contains h igh-end residential areas with low d ensity. The north-eastern corner of Oslo is the core area in all of Norway for logistical purposes, with many distribution centres for retail, wholesale and third-party logistics companies. Eastern and southern areas mainly consist of residential areas with varying degrees of density. In most areas outside the major office hubs, we see slow but steady conversion of older office buildings into residential development projects, as these are g enerally more profitable than refurbishment for continued office use.
The Oslo Office Market
06
13
The Oslo Office Areas
Sinsen Storo Kjelsås Grefsen Nydalen
Oslo Outer East
Ullevål
Oslo Outer West
Økern
Alna-Ulven
Inner City North Majorstuen
Skøyen
Inner City West
Helsfyr-Bryn
CBD
Inner City East Ryen
Lysaker
Oslo Outer South Fornebu
500 000 m²
250 000 m²
50 000 m²
Source: Akershus Eiendom
The Oslo Office Market
14
Rent Levels
STATUS The consensus rent estimates from Dagens Næringsliv for the first half of 2016 (see figure 09 and 10) show a flat development in all sub-areas. Except for Lysaker and Fornebu, the rent offered and accepted is at almost exactly the same nominal levels as last year. This is unusual, but indicates a market which has been “even-balanced” since mid-2015. This is caused by almost a standstill both in supply and demand, and the effect of the oil price downturn gradually petering out. In general, demand for office premises seem to have taken up pace d uring 2016 compared to 2015. This is, among other things, driven by several large companies and public sector units searching for new space. In 2015, there were very few such contracts. Since our last report, some notable new leases have been signed. PwC have signed 10,000 m² in the new Bjørvika development project called Eufemia, located across the street of the “Barcode” project. Additionally, the city b orough of Frogner is taking up approximately 9,500 m² in Drammensveien
60 in central Oslo (subject to formal approval by the City c ouncil). The Nydalen area in the north east fringe of Oslo has attracted both Elkjøp Nordic and Kemneren (Oslo Tax Treasurer’s office) to sign 7,000 m² each in a new development owned by Avantor. Please see ‘Developments’ for more details about new constructions in the coming years. TRENDS Over the next year, net new office space entering the market are at record low levels. Finished new developments for 2017 stands at approximately 45,000 m², and due to time constraints this will not change much, if any at all. The same number for 2018 currently stands at just below 70,000 m². These are known projects today that will be available during 2018. Over the same period, our estimate for office space being converted into other purposes remains at 100,000 m² annually, which might seem like a liberal estimate in today’s housing market. Thus, for the next year net new office space is negative and the total supply is shrinking. This happens while demand is still relatively strong.
As of September, approximately 275 companies are actively in the market for just over 685,000 m² of office space in Oslo. The ten largest of these companies are looking for almost 210,000 m² of office space, equivalent to just above 30 % of the total active search. Of the top ten, 60 % are government or municipal agencies with contracts expiring within the next three years. The expiry profile of the biggest tenants within the greater Oslo area over the coming years implies that demand will be greater than the supply in the medium-long term, which should suggest increasing rent levels throughout 2018. In summary, we expect the rent levels to remain stable throughout the year before we should see an increase in the rent levels in certain office areas during 2017. For the cbd areas, Majorstuen and Nydalen, we forecast the rental growth to be in the interval +5-10 %, generally due to the lack of new projects, and land plots being developed into residential units. For the oil clusters in the west fringe areas, we still forecast the rent levels to fall this year and stay flat in 2017, due to the downturn in the oil sector and high vacancy.
The Oslo Office Market
07
15
Oslo Office Rents September 2016
Sinsen Nydalen Storo Kjelsås Grefsen
The map shows office rent levels for high-standard units larger than 500 m² in different parts of Oslo, as of september 2016.
Oslo Outer East
Ullevål
Oslo Outer West
Alna-Ulven
Inner City North
Hasle-Økern
Majorstuen
Skøyen
Inner City West
Helsfyr-Bryn
CBD Inner City East Ryen
Lysaker
Oslo Outer South Fornebu
Rent, NOK/m²: General high standard / Top standard and new space 3 200 / 4 200 2 700 / 3 350 2 250 / 2 800 1 800 / 2 400
08
Source: Akershus Eiendom
1 600 / 2 100 1 400 / 1 950 1 000 / 1 650
Oslo Office Leasing Examples Property/location
Owner
Eufemia (Bjørvika)
Oslo S. Utvikling
Tenants
~Floor space, m²
Area
PwC
10 000
Drammensveien 60
NPRO
CBD
Oslo Kommune bydel Frogner
9 500
Nydalsveien 8
CBD
Avantor
Kemneren i Oslo
7 000
Nydalen
Nydalsveien 24
Avantor
Elkjøp Nordic
7 000
Nydalen
Tordenskiolds gate 2
Sparebank 1
MESH
6 200
CBD
Biskop Gunnerius gate 14
Entra
Jernbanedirektoratet
4 000
CBD
Roald Amundsens gate 6
DNB
Brækhus Dege
3 500
Prime
Dronning Eufemias Gate 16
Braathen Eiendom
Netledger
1 900
CBD
Hieronymus Heyerdahlsgt 1
CBRE Global Investors
Norvestor Equity
1 200
Prime
Roald Amundsens gate 6
DNB
Sparebanken Øst
900
Prime
Drammensveien 133
Klaveness Marine Holding
BER
800
Skøyen
Roald Amundsens gate 6
DNB
Advokatfirmaet Nordia
650
Prime
The Oslo Office Market
09
Year-End Rent Levels 2004–2015 The table shows year-end rent levels based on signed contracts, both new signings and renegotations.
16
2004 2005 2006 2007 2008 2009
2010
2011
2012
2013
2014
2015
Prime
1,950 2,100 2,700 3,900 3,750 2,700 2,850 3,100 3,400 3,750 3,800 3,750
High std CBD
1,550 1,700 1,900 2,300 2,300 2,200 2,350 2,550 2,850 2,900 2,900 2,800
Newer space CBD
1,700 1,900 2,000 2,600 2,600 2,500 2,550 2,650 2,850 2,900 2,900 2,800
Good std CBD
1,250 1,300 1,400 1,900 1,900 1,850 1,900 2,250 2,250 2,400 2,450 2,400
High std Skøyen
-
-
-
-
-
-
-
- 2,450 2,650 2,700 2,550
High std west fringe
1,300 1,400 1,750 2,200 2,200 1,900 1,900 1,900 1,900 2,100 2,100 1,800
High std east fringe
1,100 1,150 1,300 1,550 1,650 1,550 1,650 1,650 1,700 1,800 1,800 1,800
Older, ineffective space
500
600
800
950
950
900
900
800
800
900
900
900
Sources: Dagens Næringsliv Akershus Eiendom
NOK / m2 / year 4 500
Office Rents 1985–2016
4 000
Nominal NOK
3 500
The figure shows rent levels based on signed contracts, both new signings and renegotations.
3 000 2 500 2 000 1 500 1 000 500
Prime High std CBD Newer space CBD Good std CBD
High std Skøyen High std west fringe High std east fringe Older, ineffective space
Sources: Dagens Næringsliv Akershus Eiendom
2015 H2
2013 H2
2014 H2
2011 H2
2012 H2
2010 H2
2009 H2
2007 H2
2008 H2
2006 H2
2005 H2
2003 H2
2004 H2
2001 H2
2002 H2
1999 H2
2000 H2
1997 H2
1998 H2
1996 H2
1994 H2
1995 H2
1993 H2
1991 H2
1992 H2
1989 H2
1990 H2
1987 H2
1988 H2
1986 H2
0 1985 H2
10
The Oslo Office Market
18
Survey of Tenants Relocating
Akershus Eiendom has executed its 13th annual survey of companies or government / city agencies currently relocating. The respondents either have signed a new lease contract during the year, or are in the process of finding new premises. • The survey is designed to map the demand side of the office market, and collects a solid sample of observations of current trends in the market. The survey provides a forecast for actual new absorption in the coming 6-18 months, as few have relocated at the time of the survey. • In 2016, the 59 tenants surveyed are in the process of acquiring 312,000 m² of office space in Oslo. The survey covers around 40-50 % of the tenants searching for new premises (due to size and availability). • The survey was performed during the last weeks of August.
Assumptions / Implications: Figure 11 shows the Tenant New Demand Index. This year, relocating tenants on average need 10 % less office space. Three public sector tenants account for nearly two thirds of this reduction. Removing these from the sample leaves the reduction at 3.5 %. After recording the highest proportion of tenants planning to reduce their office space in 2015 (45 %), the same number decreased to 37 % this year, as can be seen in Figure 12. In 2016, only 19 % are increasing their office space. This is an all-time low observed in the survey. Most tenants responded that they need the same amount of office space, at 44 % of the surveyed. The respondents have indicated that increased office space efficiency is the key driver behind the downsizing trend. Out of the tenants that responded they needed less office space, 50 % would be reducing space per employee, but were not expecting to downsize staff. As seen in Figure 14, 16 % of the respondents are expecting to reduce staff. This is up from
the previous three years. The 2016 Demand Index thus reflects a combination of more efficient office space usage, as well as a slight increase in uncertainty. It is worth noting that Norges Bank’s Monetary Policy Report 2/16 highlights that labour market developments have been slightly more favourable than expected. Also, Norges Bank’s expectation survey of Q3 2016 shows that business leaders in charge of companies with more than 50 employees are more negative to future staffing than those in charge of smaller firms. Larger tenants are overrepresented in this survey, which could explain the somewhat negative outlook expressed in our results. Figure 15 shows that 56 % of the tenants plan to have less space per employee in their new offices. Rather surprisingly, the amount of respondents looking for more space per employee increased to 16 %, the highest number since 2011. Despite this increase, it is clear that the efficiency trend is still present, and this keeps demand for new and efficient office space high moving forward.
The Oslo Office Market
19
change % 11
Sum of all tenants moving: change in demand for space, compared to old location
30%
20%
10% The figure shows the change in demand for space when comparing the future requirements for space to the amount of space the tenants currently occupy.
0.0%
-10%
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
-20%
Source: Akershus Eiendom
Moving to bigger or smaller space?
80%
The figure summarizes the number of tenants planning for larger, less or the same amount of office space than they currently occupy. The figure does not weigh the responses by the size of their office space. Out of the survey participants, 37% are planning to reduce their office space, while 19% of the participants are planning to expand. For 80% of companies the reduction in office space is due to more efficient office premises, rather than reductions in staff.
60%
Share of office space
70%
50% 40% 30% 20% 10%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
12
Larger office space
Same amount of space
Less office space
Source: Akershus Eiendom
The Oslo Office Market
4 000
3 000
2 000
1 000
2013 2014
2015 2016
5000
4 000
3 000
0 2 000
The figure plots each surveyed tenant’s (those below 5,000 m2) change in demand for space. The X-axis represents current office space and the Y-axis represents future office requirements. Tenants placed below the 45° line demand less office space than they currently have, while tenants demanding more office space are located above the 45° line.
5 000
1 000
Surveyed Tenant’s Change in Demand for Space
0
13
20
The Oslo Office Market
14
Increasing or reducing Staff 2004–2016 The figure shows the expected development in the number of staff employed. 31% of the respondents report that they are experiencing increases in staff, a reduction from 50% in 2015. However, most of the difference has ended up in the no change category, while the amount of respondents planning to decrease staff has increased slightly the last year.
21
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0%
Reducing staff
No change
Increasing staff Source: Akershus Eiendom
60%
50%
40%
30%
20%
10%
0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
The figure summarizes the respondents’ plans for office space efficiency in new office spaces relative to their current premises. For the second year in a row the number of respondents planning on increase the space par employee has increased. Not since 2011 has this number been higher. The number of respondents planning on reducing office space per employee is still high at 56%.
70%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Change in space per employee; new location versus old location
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
15
Less space per employee
No change
More space per employee
Source: Akershus Eiendom
The Oslo Office Market
22
Vacancy
STATUS Oslo office vacancy measured as floor space available now or within 3 months stands at 7.25 % as of July 2016, corresponding to approximately 615,000 m². This is down 0.25 % points since last quarter, and down 1 % points from one year ago. The vacancy rate has fallen over the last two quarters and we have kept our year-end estimate of between 6.75 % and 7 % unchanged. Continuous and strong growth in residential real estate prices and the general market demand for apartments over the recent years, has really fuelled the conversion of ineffective office space into apartments. In fringe areas in the north of Oslo, we have seen exceptional sales volumes and repricing of residential units, projects that are being built on land plots formerly used for industrial and/or office purposes. Also, as mentioned in the previous report, the population growth in Oslo has led to some office buildings being re-zoned and converted into homes, hotels and schools. We have previously upped our estimate of office conversion to 120,000 m²
annually, and so far in 2016 we have already surpassed this estimate. As for the supply side, preliminary figures show that for the period 2016–2018, few new office buildings will be built (see ‘Developments’ chapter). Despite the commonly discussed downturn within the oil sector, and the fact that this has had a larger impact on the Norwegian economy in the short term than the improved conditions for the export industry, we have seen small, but positive growth in employment. Statistics Norway also predicts this growth to improve for the years to come. This drives demand for office space. The increased activity in the leasing market signals a declining vacancy. As we have mentioned in the ‘Rent Levels’ chapter, the expiry profile of several of the biggest companies implies that decisions need to be made soon. Several of these prospects are municipal or government tenants asking for leases with flexibility for expansion.
TRENDS All these discussed drivers imply increased absorption of office space over the coming years, and we forecast the vacancy rate to be slightly below 7 % at year end, and decrease to just below 5 % in 2018. See graph 14 for a year-by-year forecast for the Oslo vacancy rate. Given the described development in vacancy, we expect to see construction activity improve remarkably in 2018-19 as a result of good demand, increasing rent levels and lack of good office space. There are few possible roadblocks for this, and we expect to be heading towards a strong and healthy leasing market.
The Oslo Office Market
16
23
Oslo Office Vacancy
Sinsen Nydalen Storo Kjelsås Grefsen
This map shows vacancy in the various office areas of Oslo as of July 2016. Space counted is available at the latest by September 30.
Oslo Outer East
Ullevål
Oslo Outer West
Alna-Ulven
Økern Inner City North Majorstuen
Helsfyr-Bryn
Inner City West
Skøyen
CBD Inner City East
Lysaker
Ryen
Oslo Outer South Fornebu
Source: Akershus Eiendom
<7,5% <5% <2,5%
<17,5% <12,5% <10%
1 000 000
11.0%
Oslo Office Vacancy 2002–2020E
900 000
400 000
6.0%
6.0%
7.0%
6.0%
7.5%
8.0% 7.0%
7.0% 4.5%
500 000
5.0%
600 000
6.5%
8.0%
7.0%
700 000
300 000 200 000 100 000
Actual Forecast Vacancy level by the start of the year Net new office space added Change in demand (absorbed space)
Sources: Akershus Eiendom Various developers
2020E
2019E
2018E
2017E
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
0 2006
The office vacancy will develop relatively flat for the coming years given today’s knowledge of supply and expectations of future demand.
8.0%
800 000 The columns show how vacancy changes due to demand. The forecasts of new demand and supply are based on knowledge about spesific office developments and the official estimates for employments growth.
2005
17
13.0%
m² office space
The Oslo Office Market
18
24
Vacancy Risk 2015–2018 The map shows the risk of future vacancy within each sub-area in Oslo in the coming two years until July 2018, based on known volumes of office space entering the market during the period, either through new vacant buildings or because the tenant has signed to move out. The analysis does not take into account the effects of tenants moving between sub-areas; it is solely a supply-side risk analysis.
Sinsen Nydalen Storo Kjelsås Grefsen
Oslo Outer East
Ullevål
Oslo Outer West
Økern
Alna-Ulven
Inner City North Majorstuen
Skøyen
Inner City West
Helsfyr-Bryn
CBD Inner City East
Lysaker
Ryen
Oslo Outer South Fornebu
High risk Medium risk Low risk
Source: Akershus Eiendom
The Oslo Office Market
26
Development
NEW OFFICE CONSTRUCTION For 2016, we expect 78,500 m² of new office space to enter the market, which is down from 89,000 m² expected for the year in our last report. This is due to 27,600 m² of office space in Sundtkvartalet being offered in January 2017, and not in 2016 as previously expected. Thus, our estimated new office space for 2017 is up from 20,000 m² in our last report to 75,000 m². For 2018, known new office space is 75,500 m², and we expect an additional 74,500 m² to be announced going forward. On the other hand, we expect a conversion of office space to other use of 120,000 m² in 2016, 100,000 m² in 2017, and 120,000 m² in 2018. Thus, the net supply of new office space is expected to be -41,500 m², -25,000 m², and 30,000 m² respectively. The new projects’ locations and status are depicted in figure 16. New office buildings announced since our last report are Nydalsveien 18 and 24 at the so-called Spikerverket land plot in Nydalen. Avantor announced the construction 13,000 m² office space in Nydalsveien 18
after they signed a contract with Elkjøp for 7,000 m². Oslo Kemnerkontor (City of Oslo Tax Collection Office) signed a contract for 7,000 m² in Nydalsveien 24, renting the entire building. Both buildings are expected to be finished during 2017. TRENDS We expect low construction volumes for the coming two years due to few projects in the pipeline, and the economic slowdown which has hopefully bottomed out. Low construction combined with a steady high conversion rate of office space to other use will lead to a low net supply of office space. From the end of 2018, low vacancy will lead to more new buildings being ordered, and we forecast a larger volume of new supply from 2019 onwards. Also, we see many large tenants looking for office space and it is an increasing amount of office leases expiring in the coming years. Thus, we believe the absorption of new space will increase steadily over the next three years.
CONSTRUCTION COSTS Graph 21 shows the order backlog for the total construction. Total construction has increased further since our last report and is up 9.3 % after bottoming out during the fourth quarter of 2015. In the same period, construction of other new buildings (mainly commercial), is down 4.5 %. The development of new constructions is thus driven by the increase in the order backlog for new residential buildings which has increased by 25 % in the same period, and as much as 59.6 % since bottoming out in 2014. Graph 20 shows Akershus Eiendom’s estimated turnkey cost for new office buildings in Oslo, which has remained stable since early 2014 and is currently at nok 20,000 per m² office space. We expect the building costs to remain at this level for the next 12 months; however, increased building activity might lead to increase in the costs from the second half of 2017.
The Oslo Office Market
19
28
New Office Buildings 2016–2019
Kemneren
Spikerverket
Elkjøp 2016: 78,500 m² 2017: 75,000 m² 2018 (known): 75,000 m²
Securitas Cowi
The map shows the location, year of completion, leasing/vacancy situation and relative size of the ongoing or in other ways confirmed office construction projects in Oslo. The names are either the address, project name, or tenant name where the project has one major tenant.
Torggata 15 Orkla
Cort Adelers gt 33
Storgata 14-18 DEG 6b
Sundtkvartalet DEG 42
Diagonale
Ulvenvn. 90 Fredrik Selmers vei 4
Nils Hansens vei 25 - KRIPOS
Eufemia
20
Vacant
Occupied
Building A Fornebuporten
New buildings 2016 New buildings 2017 New buildings 2018–2019
Source: Akershus Eiendom
Available Land Plots for Office Development in Oslo Potential size, floor space m²:
150 000 m²
75 000 m²
25 000 m²
10 000 m²
Available now or within 4 years Long-term development potential, less certainty
Source: Akershus Eiendom
The Oslo Office Market
21
New Major Oslo Office Projects 2016–2018
29
Property/building
Floor space m²
Area
Completion
Developer
Dronning Eufemias gate 42
4,200
CBD East
2016
Oslo S Utvikling
Hasle Linje (Cowi)
12,500
Økern
2016
Höegh Eiendom
Fornebuporten - building A
29,500
Fornebu
2016
Aker
Storgata 14-18
8,500
CBD North-East
2016
Olav Thon Gruppen
Fredrik Selmers vei 4
6,500
Helsfyr-Bryn
2016
Entra
Sundtkvartalet
27,600
CBD North-East
2017
Entra / Skanska
Ulvenveien 90
6,000
Alna-Ulven
2017
Oslo Trelastkompani LTD AS/ Stor Ulven Holding AS
Cort Adelers gate 33
6,000
Prime
2017
Winta Eiendom
Nydalsveien 18
13,000
Nydalen
2017
Avantor
Nydalsveien 24
7,000
Nydalen
2017
Avantor
Nils Hansens vei 25
8,200
Helsfyr-Bryn
2017
Pecunia Eiendom
Hasle Linje (Securitas)
12,000
Økern
2018
Höegh Eiendom
Drammensveien 149
19,500
CBD East
2018
Orkla Eiendom
Dronning Eufemias gate (Diagonale) 15,200
CBD East
2018
Hav Eiendom / Olav Thon
m2
New Office Space
300 000
250 000
200 000
150 000
100 000
50 000
Source: Akershus Eiendom
2019E
2018E
2017E
2016E
2015E
2013
2014
2011
2012
2010
2009
2007
2008
2006
2005
2004
2003
2001
West East CBD Estimate (all areas)
2002
2000
1999
1997
1998
0 1996
Completed new office space in Oslo (including Fornebu). Only certain new buildings is included in the 2016 and 2017 figures.
1995
22
The Oslo Office Market
30
NOK / m2 23
Estimated Turnkey Cost 2005-2017E
24 000 22 000 20 000
Akershus Eiendomâ&#x20AC;&#x2122;s official estimate of turnkey cost is based upon information from recent initiated projects and input from valuations.
18 000 16 000 14 000 12 000 10 000
Jul 17
Jan 17
Jul 16
Jul 15
Jan 16
Jan 15
Jul 14
Jul 13
Estimated future construction cost Observed construction cost
Jan 14
Jan 13
Jul 12
Jul 11
Jan 12
Jan 11
Jul 10
Jul 09
Jan 10
Jan 09
Jul 08
Jul 07
Jan 08
Jan 07
Jul 06
Jul 05
Jan 06
Jan 05
8 000
Source: Akershus Eiendom
Value index for backlog
Order Backlog New Buildings Nationwide 2005â&#x20AC;&#x201C;2016 Quarterly index
275 250 225 200 175 150 125 100 75 50 25
National index, all new and exisitng buildings incl rehab projects New residential buildings Other new buildings (mainly commercial)
Source: Statistics Norway
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
0 05 Q1
The graph shows the order back log for new buildings. The graph has been deflated by the total production index to remove effects of changes in building costs (basic component costs) and changes in margins to contractors.
04 Q1
24
The Investment Market
32
The Investment Market
Performance The 2016 transaction volumes were nok 41 billion as of September 15, across 126 transactions (only deals above nok 50 million where a majority stake was transacted). This is some way off the record breaking nok 66 billion across 122 transactions in the first three quarters of 2015, but a substantial nok 8 billion improvement from the volumes during the same period in 2014 across 97 transactions. The Greater Oslo transaction market is also performing well, with approx. nok 20 billion in transaction volumes so far. For comparison, the same period in 2015 recorded nok 23 billion. The number of transactions have increased from 48 to 55. The average volume per transaction in both Oslo and the rest of Norway has decreased somewhat, which can partly be explained by the three largest transactions amounting to approx. nok 23 billion in 2015. The solid performance is driven by interest rates remaining low (10Y SWAP 1.5 % as of
September 15), which continues to attract investors seeking returns in a global low return. Naturally, the Norwegian krone has remained weak, ensuring Norway is still attractive to foreign investors. Furthermore, both Norwegian and foreign investor continue to observe a Norwegian economy showing relatively solid fundamentals despite the low oil price and a slower labor market. The Oslo residential market has experienced a strong rally so far in 2016, which has increased most Oslo land-plot values where residential development is currently, or potentially, permitted. Foreign interest Foreign investors are still net buyers. So far in 2016 foreign investors have purchased nok 8 billion worth of real estate, while they have sold nok 5.5 billion (Madison International’s sale of Statoil’s regional HQ accounts for nok 3.9 billion). The cross-border transactions account for 20 % of the investment volume so far this year. The same figure last year amounted to 54 % when including the three major portfolio acquisitions of Sektor
Gruppen (Citycon), Promenaden (Meyer Bergman) and 75 % of the assets in Storebrand Eiendomsfond (Partners Group). Removing these, the same figure for 2015 is 21 % for the first three quarters of the year, and thus we do not see foreign interest slowing down in 2016. Outlook We expect 2016 transaction volumes to total nok 65 – 75 billion. The activity as of midSeptember is high, with investors from all segments. The banks’ lending practices might see a moderate tightening, but the bond market is present for the largest deals. As of writing, the September 22 policy rate decision by Norges Bank has not yet been released, but the projected trajectory of the key policy rate is a final cut from 0.5 % to 0.25 %, before increasing to 0.5 % again during 2018, and to 0.75 % by year-end 2019. The projected low interest rate environment will lead investors to continue their search for yield, a search that we believe will continue to lead them to commercial real estate. The decreasing interest rates in Norway since 2014 has led to a substantial yield gap in the Norwegian market. However,
The Investment Market
based on evidence provided during 2016, Akershus Eiendom still consider the prime yield estimate to be 4.0 %. Hence, the prime yield gap is still at approx. 250 basis points compared to the 10Y SWAP rate; however, the margins are close to 200 basis points for most solid customers. The yield estimate for solid tenant, long duration assets in the Oslo fringe areas has decreased to around 4.75 %, and thus the difference between the CBD and fringe has now been lowered by 25 basis points. Although the number of transactions registered this year exceeds the number from the same period in 2015, we are observing a market with certain constraints on the supply side for high quality, centrally located assets. Selected transactions: • In June a closed-ended fund by Arctic Securities acquired Statoil’s regional headquarters at Fornebu from M adison International for nok 3,900 billion. The yield was 5-5.2 % for the landmark building with an 11.5 year remaining lease period.
33
• In April Entra ASA acquired Norwegian Property ASA’s remaining Skøyen assets in for nok 2,530 billion, equaling a portfolio yield of sub. 5 %.
• In August H.I.G Capital acquired an asset in Kongsberg Industrial Park from a closed-ended fund by Pareto for nok 475 million.
• In August Gaustadalléen 21, Oslo, was acquired by a closed-ended fund by NRP for nok 850 million. The vendor was a closed-ended fund with Lerka Eiendom as the largest participant.
• In June AXA Real Estate acquired Lille Grensen 7 from Nordea Liv for nok 420 million.
• In June Hemfosa Fastigheter AB, a Swedish listed company, acquired a portfolio of six assets with public sector tenants. The portfolio yield was 6.4 % in the nok 734 million transaction.
• Victoria Eiendom has acquired Nedre Slottsgate 21 from the Krohn family. • In April Stoa Vest, a big-box retail property was acquired by Tristan Capital Partners for nok 440 million from Nordea Liv.
• In April the remaining six assets in Storebrand Eiendomsfond were acquired by Kildare Partners for nok 700 million.
• In May Økern Torgvei 13 was acquired by a new fund, the Malling & Co Eiendomsfond Holding AS, for nok 280 million from a closed-ended fund.
• In April Balder Fastigheter AB acquired Terningen Arena from a closed-ended fund by Pareto for nok 700 million. This is equivalent to a yield of 4.9 %.
• In September several retail property retail units located at Aker Brygge, Oslo, were acquired by Norwegian Property ASA for approx. nok 210 million from Watrium AS.
The Investment Market
34
NOK Million 25
Transaction Volume of Commercial Properties Only deals larger than NOK 50 million are incuded in the graph. Volume in 2015 ended at NOK 118 billion. As per September 15th, 2016 volume totals NOK 41 billion.
140 000
120 000
100 000
80 000
60 000
40 000
20 000
Residential projects Commercial land plots Logistics / industrial properties Hotels Retail properties Office buildings
2016 YTD
2015
7.00 %
6.00 %
5.00 %
4.00 %
3.00 %
2.00 %
Transaction Yield 10Y SWAP 10Y Gov. Bond
Source: Akershus Eiendom
Jul 16
Jan 16
Jul 15
Jul 14
Jan 15
Jul 13
Jan 14
Jul 12
Jan 13
Jan 12
Jul 11
Jan 11
Jul 10
Jan 10
Jul 09
Jul 08
Jan 09
Jul 07
Jan 08
Jan 07
Jul 06
Jan 06
Jul 05
Jul 04
Jan 05
Jul 04
Jan 04
1.00 % Jul 02
The curve indicates the 10-year government bond rate and the 10-year SWAP rate. The triangles represent time and sales yield for large Oslo office transactions since Jan 2002.
Source: Akershus Eiendom
8.00%
Jan 04
Interest Rates and Transaction Yields 2002â&#x20AC;&#x201C;2016
Jan 02
26
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
The Investment Market
27
35
Sellers and Buyers of Commercial Property 2015–2016
9% 8%
19% 2016 YTD
2015
14% 15%
1% 13%
13%
1% 38%
4% 4%
2% 4%
2% 19% 5%
42% 2% 1% 4%
5%
Buyers
Property funds Foreign investors Private investors Owner occupier Remaining
Property companies Listed property funds Government Closed-end funds Insurance/Pension funds
Floor space m²
17%
4%
Sellers
Property/location
13% 20%
5% 3% 18%
15%
Oslo Office Transactions
30%
30%
8%
28
3%
4% 3%
1%
Price NOK Seller million
Source: Akershus Eiendom
Buyer
Statoil regional HQ, Fornebu
65 000
3 900 Madison International Realty
Closed-ended fund by Arctic Securities
Norwegian Property ASA portfolio, Skøyen
61 000
2 530 Norwegian Property ASA
Entra ASA
Gaustadalléen 21
30 000
850 Closed-ended fund (Lerka Eiendom)
Closed-ended fund by NRP
Sørkedalsveien 8
11 000
550 Stor-Oslo Prosjekt
Oslo Pensjonsforsikring
Lille Grensen 7
7 000
420 Nordea Liv
AXA Real Estate
Tollbugata 20 / Kirkegata 5
7 400
309 AM Alpha
Canica
Økern Torgvei 13
19 700
280 Closed-ended fund (Bunde Gruppen)
Malling & Co Eiendomsfond Holding AS
Dronning Eufemias gate 42
4 050
250 Oslo S Utvikling
Wahl Eiendom
Lørenveien 37
7 000
210 Ragde Eiendom
Closed-ended fund by Colliers Corporate
Karihaugveien 89
Sportskameratene AS
10 973
180 Nordisk Areal Invest
Kongens gate 12
3 270
92 Alliance Prosjekt AS
Dronning Mauds gate 15
8 500
n.a. Eksportfinans ASA
Genesta Nordic Real Estate Fund II
Kongens gate 22
5 700
n.a. Revcap Properties Ltd (80%), Colliers CRE Plc (10%), Colliers Invest AS (10%)
Ragde Eiendom
Canica
Regional Property Markets
36
Regional Property Markets
BERGEN • The 2016 YTD transaction volume in Bergen is at nok 3.5 billion. In addition, Olav Thon Eiendomsselskap has signed letters of intent with Nordea Liv and Steen & Strøm regarding the acquisition of Åsane Senter for nok 2 billion.
TRONDHEIM • The transaction volume in Trondheim for the first half of 2016 is approximately nok 2 billion.
• Prime yield for the best objects are seen in the area 4.9 – 5.8 %, while “normal” property experience yields up to 7 %.
• Office vacancy is increasing, and stands at 9.4 % as of July 2016. The increase has mainly occurred in the fringe areas, LadeLeangen, Ranheim and Tiller, while the cbd area remains relatively stable.
• Rent levels for new buildings located in Bergen cbd are about 2,400-2,500 per m² per year. Good and large premises located in the cbd still see high demand, and rent levels for these premises are expected to remain stable going forward. The high vacancy in the fringe areas will, however, put further downwards pressure on fringe rent levels. • Office vacancy in Bergen stands at approximately 9.8 %.
• Prime yield is stable at 5.25 %, while “normal” yields are in the 6.25 – 7.25 % range.
• Office rent levels in Trondheim are stable at nok 1,000 – 2,000 per m² per year. However, rental levels are expected to slightly decline going forward, especially in the fringe areas. • About 20,000 m² of new office space is expected to be completed during 2016. As of today, about 70,000 m² is under construction for 2017 completion and this indicates that vacancy will keep rising until early 2018.
STAVANGER • The transaction market has been less active so far in 2016 compared to 2015. However, several ongoing processes indicate another year with solid volumes in the Stavanger region. • Stavanger has experienced an increasing activity within leasing of commercial property during the first half of 2016. • Office vacancy is now at 9.2 %, a decrease of 0.9 percentage points since the last survey. The vacancy rate is highest in areas dominated by oil-related businesses. • As a result of the high vacancy level in the region, rent levels for office space experience a downward pressure. Several areas within the region experience a decline, while the cbd area remains relatively stable. • Construction of new office buildings in the region is still at low levels, and is expected to stay low for the coming two to three years.
Regional Property Markets
29
Year-End Office Rents 2006–2016
38
Bergen
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
1 225
1 400
1 550
1 475
1 475
1 475
1 475
1 475
1 475
1 505
1 505
Trondheim
1 350
1 650
1 650
1 600
1 600
1 650
1 700
1 700
1 750
1 654
1 631
Stavanger - CBD
1 500
1 650
1 700
1 600
1 600
1 700
1 900
1 950
2 000
1 894
1 783
Stavanger - Oil
1 200
1 350
1 400
1 300
1 300
1 350
1 450
1 525
1 450
1 271
1 195
Kristiansand
1 350
1 525
1 550
1 425
1 400
1 400
1 375
1 400
1 400
1 400
1 400
Tromsø
1 000
1 300
1 300
1 300
1 450
1 450
1 500
1 675
1 650
1 770
1 770
Source: Dagens Næringsliv
NOK/m2/year
Regional Office Rents 1989–2016
2 000 1 800
Nominal NOK 1 600 1 400 1 200 1 000 800 600
Bergen Trondheim Stavanger - CBD
Stavanger - Oil (Forus) Kristiansand Tromsø
2015 H2
2014 H2
2013 H1
Source: Dagens Næringsliv
2013 H2
2011 H1
2012 H1
2010 H1
2009 H1
2007 H1
2008 H1
2006 H1
2005 H1
2003 H1
2004 H1
2001 H1
2002 H1
1999 H1
2000 H1
1997 H1
1998 H1
1996 H1
1994 H1
1995 H1
1993 H1
1991 H1
1992 H1
1989 H1
400 1990 H1
30
Regional Property Markets
39
Office rent, NOK per m2 31
Office Rents September 2016 The columns show lower and higher rents for different areas within the three cities. Bergen rents are more uniform than Stavanger and Trondheim.
2 800
Bergen
2 600
Trondheim
Stavanger
2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200
Best rent levels Lower rent levels
Tananger
Forus
Sources: Eiendomsmegler1 Midt-Norge Eiendomsmegler1 Rogaland Kyte Næringsmegling
12%
10%
8%
6%
4%
2%
16 Jan
16 Aug
15 Jan
15 Aug
14 Jan
14 Sept
13 Jan
13 Sept
12 Jan
12 Aug
11 Jan
11 Aug
10 Jan
10 Aug
09 Jan
09 Aug
08 Aug
08 Jan
07 Jan
07 Aug
06 Feb
Bergen Trondheim Stavanger
06 Sept
05 Sept
05 Jan
0% 03 Oct
Regional Office Vacancy 2003–2016
04 Feb
32
CBD
South
East
Fringe CBD
CBD
Sandsli
Fyllingsdalen
Fringe CBD
CBD
0
Sources: Eiendomsmegler1 Midt-Norge Eiendomsmegler1 Rogaland Kyte Næringsmegling
Regional Property Markets
33
40
Leasing Property / location
Floor space m²
Rent / m² Tenant
Owner
STAVANGER Kanalsletta 2
2 200
n.a. Woodgroup
Closed-ended fund
Kanalsletta 2
1 000
n.a. Visma
Closed-ended fund
Kanalsletta 2
900
Kanalsletta 2
2 200
n.a. Sparebank 1
Closed-ended fund
n.a. Maersk Oil
Closed-ended fund
Løkkeveien
1 600
n.a. Fokus Bank
Smedvig
Hinna Park
900
n.a. Stavanger Kommune
Hinna park
Ankerkvartalet
430
n.a. Willis Watson Towers
Øgreid Eiendom
TRONDHEIM Kongens gate 2
2 400
Falkenborgveien 28
6 000
1 900 Eiendomsmegler 1 Midt-Norge n.a. Trondheim Kommune
Sparebank 1 SMN Realinvest
BERGEN
34
Kanalveien 107
4 800
n.a. Siemens AS
Rasmussen Eiendom AS
Nygårdsgaten 112 og 114
9 500
n.a. UNI Research
Odfjell Eiendom AS
Kronstadparken
1 200
n.a. Westfal Larsen AS
Bara Eiendom AS
Kaigaten 4
7 000
n.a. Bergen Kommune
MNG Holding AS
Sales Property / location
Floor space m²
Price, MNOK Buyer
Seller
TRONDHEIM Bassengbakken
8 000
255 Byggteknikk
Kaisa Holding As
Klæbuveien 196
4 500
139 Pareto closed-ended fund
Faaness Invest
BERGEN Åsane Senter
53 000
Zander Kaaes gate
15 000
2 000 Olav Thon 760 ROM
KLP
Nordea Liv & Steen Strøm
Magnusvegen
11 000
125 Brask AS
Midgard Næring
STAVANGER Byterminalen UNIK Terminal Forus Share of the NLI-portfolio
80 ROM Eiendom 600 City Finansiering ~600 Round Hill Capital
Various public investors Høgevoll and Det Stavangerske Investeringsselskap NLI
35
New Building / Rehabilitation Property / location
Floor space m²
Completion Developer
Tenant
TRONDHEIM Trapphuset Abels Hus Brattørkaia 16
4 500 15 000 8 350
2016 ROM Eiendom
n.a.
2017 KLP
n.a.
2018 Entra
BI Norwegian Business School
STAVANGER Wintershall
17 900
2016 Hinna Park AS
Wintershall
Sandnes Sparebank
5 500
2016 Kruse Smith Eiendom
Sandnes Sparebank
14 000
2019 Block Berge Bygg AS
SpareBank 1 SR-Bank
SpareBank 1 SR-Bank
BERGEN Hotell Zander K
7 960
2017 Friele/Smørås
Smørås
Damsgårdsveien 134
9 900
2017 Frydenbø
n.a.
Kanalveien 7
7 500
2017 Rasmussen Eiendom
Siemens
Comfort Hotel Bergen Airport
20 000
2017 Avinor
Choice
Scandic Flesland Airport
23 650
2017 West Coast Invest
Scandic
Source: Eiendomsmegler 1 Midt-Norge Eiendomsmegler 1 Rogaland Kyte Næringsmegler
International Office Markets
42
International Office Markets
NORDIC OFFICE MARKETS Investors’ interest in the Nordic property market remains strong, and yield levels have continued downwards in several submarkets. Properties with long-term cash flows are highly valued, especially in more uncertain markets, such as Denmark and Finland. The Stockholm property market has continued to perform well, with rising rents, high take-up volumes and property yield reductions. During the first half of 2016, the total vacancy in Stockholm increased by 1 percentage point to 8.1 %. However, this is a decrease of 0.9 % year-on-year. Prime rents in Stockholm have increased in four of five submarkets with prime rent in the cbd increasing from sek 5,200 per m² to sek 5,800 per m², an impressive increase of 29 % year-on-year. The transaction volume during first half 2016 amounted to sek 21.2 billion, a decrease of 31 % compared to the same period last year. Of the transaction volume, sek 7.7 billion was acquired by international investors. Prime yield remains at 3.75 % in the cbd-area.
Copenhagen vacancy rates have continued to trend downwards during 2016, finishing Q2 at 9.4 percent in Greater Copenhagen and 7.7 percent in the cbd. Vacancies have mostly been limited to old-stock office space, and as this category is still struggling to compete for tenants, conversion and upgrade schemes are often preferred. Demand in the Copenhagen office market has remained clustered around modern facilities that offer flexible, cost-efficient space. Prime office rent have remained at DKK 1,800 per m². There is still a strong demand for in the investment market, and the investment volume for first half 2016 is expecting to surpass that of first half 2015. Office yields in the cbd have remained stable during 2016, with prime office yield currently standing at around 4.25 percent, and yield for secondary office properties at approximately 5 percent. The Helsinki office market is experiencing a polarization, where tenants continue to downsize their premises and prioritize modern high-quality premises. Older, outdated office stock, particularly in secondary locations, have experienced increased vacancy. The
overall vacancy increased from 11.4 % in our last report to 12.4 % in the first half of 2016. Prime rents have for the most part remained stable, but the cbd has experienced an increase in asking rent due to several refurbishment projects. In the transaction market, there has been low activity on the sell side, resulting in a transaction volume of €250 million for the first half of 2016, a drop of 50 % compared to the second half of 2015. Prime yield has remained at 4.75 % since our last report. EUROPEAN OFFICE MARKETS The Jones Lang LaSalle “Office Clock” describes the European market situation by a quarterly plot for the movement in prime rents for major cities. The clock illustrates both direction and speed of change for the different cities over 6 months. The rental growth in Stockholm is moving towards a slower growth, rental growth in Copenhagen has accelerated since our last report, while rents in Helsinki are still bottoming out. Oslo is, as described in this report, also at 6 o’clock, though at a level where prime rents have not fallen, but are likely to rise over the next 12 months.
International Office Markets
36
43
European Offices Property Clock Q2, 2016
London City, London WE, Lyon Cologne Frankfurt Hamburg, Malmö
Istanbul
Munich, Stuttgart Edinburgh, Luxembourg, Manchester Copenhagen Dublin
Rental Growth Slowing
Rents Falling
Rental Growth Accelerating
Rents Bottoming Out
Stockholm Berlin
Barcelona, Madrid, Gothenburg Amsterdam, Budapest, Dusseldorf Milan Paris CBD
Moscow Lisbon Rome Brussels
Geneva, Warsaw Athens, Bucharest, Helsinki, Kiev, Oslo, Prague, St. Petersburg, Zurich
Source: JLL Akershus Eiendom
37
Key Information Nordic Cities Q2, 2016 Key Data Inflation 2016 (%) Prime Yield (%) (CBD) Rest of Inner City (%)
Oslo
Stockholm
Copenhagen
Helsinki
2.9
1.2
0.4
0.1
Gothenburg 1.2
4.00
3.75
4.25
4.75
4.25
4.75-5.25
4.00
4.75
6.00
4.75
Prime Rent (Local Currency / Euro / m²) (CBD)
4,200 / 449
5,800 / 616
1,800 / 242
306
2,800 / 297
Submarkets (Local Currency / Euro / m²) (CBD)
2,500 / 267 2,300-3,600 / 244-382
1,000-1,650 / 134-222
198-222
2,000-2,600 / 212-276
Completions - 2016 (m²) (Total)
78,500
116,000
400,000
40,000
39,600
Completions - 2017 (m²) (Total)
75,000
62,700
315,000
40,000
17,800
Completions - 2018 (m²) (Total)
75,500
101,600
237,500
50,000
15,600
7.25
8.1
9.4
12.4
6.0
Vacancy rate (%) (Total)
Sources: JLL Akershus Eiendom
International Office Markets
44
â&#x201A;Ź/m2/year 38
Nordic Office Rent Development
700
600
500
400
300
200
100
2015
2016 Q2 2016 Q2
2014
2013
2012
Source: JLL Akershus Eiendom
20% 18% 16% 14% 12% 10% 8% 6% 4% 2%
Oslo vacancy rate Helsinki vacancy rate Stockholm vacancy rate Copenhagen vacancy rate
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
0% 1998
Nordic Vacancy Development
1997
39
2015
Oslo prime rent Helsinki prime rent Stockholm prime rent Copenhagen prime rent
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
0
Source: JLL Akershus Eiendom
International Office Markets
40
Nordic Yield Development
45
7.50% 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00%
2015
2016 Q2 2016 Q2
2014
2013
2012
2015
Oslo prime yield Helsinki prime yield Stockholm prime yield Copenhagen prime yield
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
3.50%
Source: JLL Akershus Eiendom
â&#x201A;Ź/m2
Prime Value Index
18 000
Prime rent/prime yield
16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000
Oslo value Helsinki value Stockholm value Copenhagen value
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
0 1997
41
Source: JLL Akershus Eiendom
The Retail Market
46
The Retail Market
Status Retail sales volume (excluding motor vehicles) is down 1.9 % year-on year by July. However, the consumer confidence index (cci) has increased five months in a row and has reached its highest level since February 2013. The cci index was in August 2016 at 6.2 points, which is an increase of 16.3 points since January 2016. The cci is now at levels well above its historical average and signals higher consumption growth. The shopping centre market Norwegian shopping centres have experienced a healthy development in recent years. The 230 largest shopping centres account for about 30 % of the total retail turnover in Norway. According to Andhøy, total turnover for all shopping centres increased by approximately 4.6 % from 2014 to 2015; this is slightly higher than the ssb all-retail growth of 3.2 %. Online sales of various goods continue to gain market share in the Norwegian market, and grew four times faster than in-
store sales in 2015. However, e-commerce still accounts for a small share of total retail sales, approximately 6-7 % of total retail consumption. With increasing e-commerce, we see a trend with fewer, but larger and more prominent shopping centres. The Oslo high-street market The high-street retail market in Oslo has experienced a significant rental growth over the past seven years. Rent levels in Nedre Slottsgate, where luxury retailers are dominating, have increased by approximately 300 % since 2010 which is the strongest rental growth in Europe. However, the prime rent level experienced some softening during the first quarter of 2016 due to the economic slowdown. As the Norwegian economy shows signs of a turnaround, the softening is expected to only be short-term. Vacancy in the high-street retail area is close to non-existent and demand for attractive retail space exceeds current supply in Karl Johans gate. The prime
area will therefore most likely expand and Kvadraturen (south of Karl Johans gate) is expected to experience significant growth in the coming years. The retail investment market So far in 2016, 20+ retail property transactions amount to approximately 8.5 billion which is about 20 % of the total transaction volume year to date. International investors continue to view high-street retail as attractive. London-based Tristan Capital Partners acquired the Stoa Vest retail park in Arendal on the southeast coast of Norway from Nordea Liv for approximately nok 440 million. Nordea Liv has sold Lille Grensen 7, a 7,000 m² retail and office building located in the high-street retail area in Oslo, to a foreign real estate fund. Wahl Eiendom has sold Hegdehaugsveien 25, a retail property located in a very popular shopping area in Oslo, to Canica and Macama.
The Retail Market
47
Retail volume index
Retail year-on-year growth
Jul 16
Jul 15
Jan 16
Jan 15
Jul 14
Jul 13
Retail year-on-year growth Retail volume index
Jan 14
Jan 13
-5% Jul 12
80 Jul 11
-3%
Jan 12
90
Jan 11
0%
Jul 10
100
Jul 09
3%
Jan 10
110
Jul 08
Retail sales has decreased lately and is down 1.9% year-on-year.
Jan 09
5%
Jul 07
120
Jan 08
Season adjusted volume index, 2010=100
Jul 06
8%
Jan 07
130
Jul 05
10%
Norwegian Retail Volume Index 2005–2016
Jan 06
140
Jan 05
42
Source: Statistics Norway
m2/year
Annual 4 quarter moving average.
800 000
Permitted and started retail construction show an increase in Norway as a whole, while retail construction in Oslo is declining.
600 000
400 000
200 000
Permitted Norway Started Norway Completed Norway
Permitted Greater Oslo Started Greater Oslo Completed Greater Oslo
Source: Statistics Norway
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
05 Q1
04 Q1
03 Q1
0 02 Q1
Retail Construction 2001–2016
1 000 000
01 Q1
43
The Retail Market
48
m2/year
Prime Rent for Unit Shops Oslo, Karl Johans Gate 2000-2016
30 000
25 000
20 000
15 000
10 000
5 000
Source: Statistics Norway
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
05 Q1
04 Q1
03 Q1
0 02 Q1
Prime rents for unit shops has decreased from 25,000 to 23,500 per m² due to the economic situation
01 Q1
44
45
46
Retail Rents in Bogstadveien / Hegdehaugsveien
20 000 + 16-20 000 12-16 000 8-12 000
5-8 000 3-5 000 -3 000
Source: Akershus Eiendom
20 000 + 16-20 000 12-16 000 8-12 000
5-8 000 3-5 000 -3 000
Source: Akershus Eiendom
Retail Rents in the Karl Johans Gate Area
The Hotel Market
50
The Hotel Market
Performance The hotel market performed well during H1 2016, building on a very strong 2015. This despite the hotel strike impacting the m arket during the last week of April and most of May. Total revenue for the Norwegian market reached nok 6.5 billion in H1 2016, up from nok 6.4 billion during H1 2015. The average room prices were nok 908, down nok 2. Occupancy rates increased slightly to 51.7 %. The resulting RevPAR fell nok 1 to nok 469. The Oslo market added nok 7 to the average room rates of H1 2015. RevPAR fell nok 9 to nok 641, as occupancy rates fell from 66.9 % to 65.5 %. The Oslo market reached a total revenue of nok 1.45 billion. Demand and supply Demand remains strong, fuelled by the weak Norwegian krone. Total guest nights for H1 2016 fell 1.9 % compared to H1 2015. In July, however, the 2016 volume surpassed that of 2015 with a record high 8 % year-onyear growth, so the annual volume growth is likely to be positive.
Oslo guest nights increased 2.7 % in H1, with an 11.3 % increase in recreational stays more than making up for a 4.1 % decrease in business stays. Foreign guest nights increased 9.7 %, while domestic guest nights decreased 1.6 %.
• KLP Eiendom and Rezidor Hotel Group will renovate Hotel Atlantic (Stavanger) and reopen in November 2017.
Graph 49 shows the development in hotel construction. There are several new p rojects in the pipeline since our last report:
Hotel transactions during 2016 • In June Smarthotel Oslo (275 rooms) was acquired by DNB Scandinavian Property Fund for nok 378 million. Smarthotel Eiendom AS was the vendor.
• Nordic Choice will operate Hav Eiendom’s253 room hotel in Bjørvika, Oslo. The hotel will open early 2019.
• In May Norefjell Ski & Spa was acquired by Edda Utvikling AS and the Adolfsen Group from Danske Bank.
• The expansion of Clarion Hotel Royal Christiania (Oslo) will start in January 2017 and finish in 2019.
• In May Viking Eiendom acquired City Living Hotell Tromsø (46 rooms) from Realinvest Tromsø AS for nok 63 million.
• Rom Eiendom and R8 Property will open a new 134 room hotel in Porsgrunn during H1 2018.
• In March Midstar Hotels acquired Quality Grand Hotel Kristiansund (158 rooms) and Radisson Blu Ålesund (131 rooms) from Wenaasgruppen.
• KLP Eiendom and Nordic Choice will expand Quality Airport Hotel Gardermoenby 129 rooms.
• In April EGD Property acquired Quality Hotel Vøringsfoss from Home Invest.
The Hotel Market
51
No. of guest nights per month in thousands (1 000) 47
Volume of Guest Nights in Norwegian Hotels 2003–2016 The graph shows the split between the volume of foreign and domestic guest nights in all hotels of Norway. Figures are seasonally adjusted.
1 500
1 300
1 100
900
700
500
300
15 Jan
16 Jan 16 Jan
14 Jan
RevPAR
1 000 900 800 700 600 500 400
Oslo Norway
14 Jan
13 Jan
12 Jan
11 Jan
10 Jan
09 Jan
08 Jan
07 Jan
06 Jan
300 05 Jan
The graph shows the development in real RevPAR in today's values. All figures are seasonally adjusted.
Source: Statistics Norway
1 100
04 Jan
Real RevPAR 2003–2016
03 Jan
48
15 Jan
Domestic guests Foreign guests
13 Jan
12 Jan
11 Jan
10 Jan
09 Jan
08 Jan
07 Jan
06 Jan
05 Jan
04 Jan
03 Jan
100
Source: Statistics Norway
The Hotel Market
52
m2/year
Hotel Construction 2001â&#x20AC;&#x201C;2016
250 000
Annualized 4-quarter total
200 000
150 000
100 000
50 000
Permitted Norway Started Norway Completed Oslo
Permitted Greater Oslo Started Greater Oslo Completed Greater Oslo
Source: Statistics Norway
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
05 Q1
04 Q1
03 Q1
0 02 Q1
The volume of started hotel construction has slowed after peaking late 2015. This coincides with a very strong 2015 for the hotel market. Completed hotel construction is low, as expected, as started hotel construction was low during 2013 and 2014.
01 Q1
49
The Logistics Market
54
The Logistics Property Market Since our previous report published in spring 2016, we have not changed our view on Greater Oslo logistics rent levels and prime rent still stands at 1,200 nok/m² per year. Observed rent levels are high from Berger to Vinterbro, as these hubs are very popular. Their close proximity to effective intersections with the main highway E6, short driving distance to Oslo and the availability of vacant land plots make these hubs a good alternative to the relatively fully developed area around the Alnabru national cross dock terminal (Alna/Nyland). Over the past 12 months the activity in the leasing market has increased and several new large developments are expected within the next three years. Home & Cottage and Aggreko will move into new facilities within the the Gardermoen region, whilst Bertel O. Steen, Skanska, OneMed and Nortekstil will have new buildings at Berger. Elektroimportøren/ Namron and TibNor will move to a new hub being constructed by Bulk Infrastructure AS at Ausen Industrial area, whereas Staples and Primafloor/Blometerringen will move into
new premises at Lahaugmoen Industrial area. Cater Storkjøkken will move to Gjellebekk Industrial area in Lier, Elektroskandia will move to Langhus and Vinmonopolet and Synnøve Finden receives a new facilities at Vestby, whereas the latter will have a cold storage facility. The increased activity in the leasing market has not yet led to an increase in the overall vacancy rate. The vacancy in the greater Oslo region measured as floor space available now or within 3 months, stands at 4 % as of July 2016, unchanged since our previous report. The northern, southern and western regions have vacancy rates at 5.5 %, 4 % and 6 %, respectively. Oslo Vacancy is unchanged at 2 %. The new developments might lead to an increase in vacancy over the next couple of years, but not enough to put pressure on rent levels. The transaction market has been very active, yet not at the same volumes as seen last year. We have so far (per 31 August) registered more than 20 transactions including sale
of portfolios and larger Industrial sites. Among others; Aker ASA sold a portfolio of 8 industrial properties to TRG AS, only a few months after the same portfolio where sold to Aker ASA. NLI Eiendomsinvest ASA has been sold; the Norwegian properties mainly consist of both warehouses and combined use buildings. The new bus terminal at Forus has been sold, and a larger transaction at Kongsberg Industrial park has been executed. Last, we have witnessed several transactions being executed in the Greater Oslo region, whereas the majority has been north of Oslo. Based on recent market activity, we have lowered our estimate for prime yield with 25 bps to 5.5 % for a 10-year investment grade property, and we observe that there is still a downwards pressure on the prime yield level. The yield estimate is relevant for properties within the prime and secondary areas, from Berger to Vinterbro. The yield estimate for investment grade properties with substantially longer leases, within the same geographical region, is slightly lower.
The Logistics Market
50
55
Rent Levels September 2016
Gardemoen
Kløfta
Berger
Lillestrøm Groruddalen
Other Oslo Oslo West Other
Regnbuen / Berghagan Ski
Vestby
Rent NOK/m2 for Normal - high standard / Top-standard and new build 1 000–1 200 800–1 000 700–800 –750
Source: Akershus Eiendom
The Logistics Market
56
NOK/m2/year 51
Prime Rent for Warehouse/Logistics
1 400
1 200
Greater Oslo region, 2001–2016. 1 000 Prime rent, seen in the central parts of Groruddalen close to the Alnabru rail terminal, is at NOK 1 200 per m².
800
600
400
200
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
05 Q1
04 Q1
03 Q1
02 Q1
01 Q1
0
Source: Akershus Eiendom
m2/year
Logistics Construction 2001–2016
1 800 000 1 600 000 1 400 000
Annualized 4-quarter total. 1 200 000 1 000 000 800 000 600 000 400 000 200 000
Permitted Norway Started Norway Completed Norway
Permitted Greater Oslo Started Greater Oslo Completed Oslo
Source: Statistics Norway
16 Q1
15 Q1
14 Q1
13 Q1
12 Q1
11 Q1
10 Q1
09 Q1
08 Q1
07 Q1
06 Q1
05 Q1
04 Q1
03 Q1
0 02 Q1
A upswing is seen in started and completed projects in the Greater Oslo Region.
01 Q1
52
The Residential Market
58
The Residential Market
Residential prices Since the last report, residential prices has increased substantially. Statistics from Real Estate Norway shows that residential prices increased by 2.8 % over the last month, which is the largest monthly increase since January which saw an increase of 3.1 %. Y-o-y the residential prices increased by 9.1 %, and the prices so far in 2016 are 6.6 % higher than in 2015. The residential price development in the largest cities has varied a lot over the last year. Oslo and Trondheim have been leading the way with y-o-y increase in residential prices of 16.3 % and 7.8 % respectively. Tromsø has also experienced a healthy growth of 7.8 %, up from the 5.6 % increase experienced in 2015. Bergen and Stavanger, on the other hand, have experienced decreased activity in the residential markets, due to the slowdown in the petroleum industry. Prices in Bergen have increased with 3.3 %, a slowdown from last year, and Stavanger had a fall in residential prices of 6.2 % after a 5 % reduction from 2014 to 2015.
According to ECON Nye boliger, the average price for new dwellings in Norway is nok 47,500 m2. Oslo have the highest prices of nok 68,400 m2, Stavanger is at nok 55,800 m2, while Tromsø, B ergen, and Trondheim have average prices in the area of nok 53,000 m2. Norges Bank has further lowered the key policy rate by 0.25 percentage points since the last report lowering the key policy rate to from 0.75 % to 0.5 %. The low mortgage rates are the main reason for the upward pressure on the residential prices. The accelerating price growth, especially in Oslo, is also fuelled by smaller investors looking for above-zero return on investment, and affluent parents supporting children’s residential purchases. There is now a considerable political focus on the downsides of the low interest rates and the difficulty for first-time home buyers caused by this situation. In order to reduce the growth in residential prices, the Financial Supervisory Authority suggested changes the general residential loan regulations. it is unclear
whether the changes will be implemented or if they will succeed. Residential construction The number of residential units under construction increased by 4.2 % during the second half of 2015 and has continued the positive development during the first 7 months of 2016, increasing by 7.4 %. The residential construction figures remain at solid levels driven by good sales and continually increasing residential prices. The volume of completed residential units has remained relatively stable over the last 3 years. The competition for new dwellings in Oslo is hard, and developers’ inventories are about to be emptied. The sales rates (sold units as a percentage of total units offered) remained high during the second half of 2015 and has increased further over the last 6 months. There are still large regional differences in the sales rate with a low sales rate in the western and southern parts of Norway, while the sales rates are at good levels in the rest of the country.
The Residential Market
59
Average sales price, NOK/m2
35%
30 000
30%
25 000
25%
20 000
20%
15 000
15%
10 000
10%
5 000
5%
0
0%
Jul 16
Jul 15
Jan 16
Jul 14
Jan 15
Jan 13
Jan 14
Jul 12
Jul 13
Jul 11
Jan 12
Jan 11
Jul 10
Jul 09
Jan 10
Jul 08
Jan 09
-15% Jul 07
-15 000 Jan 08
-10%
Jul 06
- 10 000
Jan 07
-5%
Jul 05
- 5 000
Jan 04
Residential prices increased by an annual 5,2 % from January 2015 to January 2016.
35 000
Jan 06
Nominal values
40%
Jul 04
Residential Prices 2004–2016
% annual price change
40 000
Jan 05
53
Sources: Econ Pöyry Finn.no Norwegian Assosiation of Real Estate Agents (NEF)
Year-on-year change, by month, % Average residential price NOK/m²
Volume of residential units
40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000
Residential units under construction Completed residential units, last 12 months
Source: Statistics Norway
2016
2015
2014
2013
2012
2011
2010
2009
0 2008
Units under contstruction increased 6.5 %, while the number of completed dwellings was unchanged during the first half of the year.
45 000
2007
Residential Construction in Norway 2006–2016
50 000
2006
54
Definitions
61
Definitions
Area definitions
BTA BRA P-rom BYA
Gross area Usable area Living area â&#x20AC;&#x201C; residential Foot print of the building
Abbreviations
NAV CBD CPI NOK SSB
Norwegian Labour and Welfare Agency Central Business District Consumer Price Index Norwegian Krone Statistics Norway
Depreciation Document tax (stamp duty) Property tax
Office buildings 2% Warehouse/industrial 4% Shopping centres 2% Hotels 4% Investments 10% 2.5% of transaction value Depends on the county, many currently have a zero rate.
Taxes and depreciation
Akershus Eiendom
62
Akershus Eiendom AS
Akershus Eiendom AS is an independent property advisor focusing on commercial property; offices, warehouse facilities, shops/shopping centres, hotels, land, and related types of property. Akershus Eiendom advises its clients on sales, leasing, development, research, valuations and other areas of commercial property business. Akershus Eiendom has during the past five years handled sales transactions for properties of a total value of more than NOK 30 billion, and has handled leasing of more than 700 000 m² of office space. Akershus Eiendom is associated with Kyte Næringsmegling in Bergen and JLL internationally.
Manager
Transactions
Research/valuation
Per Kumle
Petter Nylend Roar Sandnes Jørgen Haga Christian Valdem Rune Unsgård Knut Berget Jacob A. L'Orsa Cecilie Ragner Marte Overå
Leasing
Tenant representation
Ragnar Eggen Administration Erik André Bratt Karin Manengen Birgitte Heskestad Ellingsen Andreas Egset Tor-Øyvind Skjelvik William Nevstad Board of directors Sindre Bråtebæk Lasse Bjørndahl Adam Ingwall
Ole Christian Iversen Rune Arvesen Anders Heffermehl Ole-Jacob Leirskar Stig Basing Jonas Myhre Remi Olsen Morten Buøen Lise Kaupang
Vigdis Sundvoll Lars Føyen Kinserdal Christoffer Rohde-Hansen Vigdis Sundvoll Hilde Bang
Roar Sandnes Jørgen Haga Petter Nylend Per Kumle Ole Christian Iversen Geir Saastad Ragnar Eggen
Akershus Eiendom
This report is produced in cooperation with
63
Haakon VII’s gate 5 P.O. Box 1739 Vika NO-0121 Oslo Reg.no. 963.877.722
T: +47 22 41 48 00 F: +47 22 41 48 06 W: akershuseiendom.no
Lästmakargatan 20 P.O. Box 1147 SE-111 81 Stockholm
T: +46 8 453 50 00 F: +46 8 453 51 10 W: jll.com
Bankgaten 8 P.O. Box 7999 NO-5020 Bergen
T: +47 55 55 30 50 F: +47 55 55 33 54 W: kyte.no
Søndre gate 4 P.O. Box 433 Sentrum NO-7404 Trondheim
T: +47 73 89 06 00 F: +47 73 89 06 50 W: eiendomsmegler1.no
Petroleumsveien 6 P.O. Box 114 NO-4065 Stavanger
T: +47 51 95 65 75 F: +47 51 44 48 83 W: eiendomsmegler1.no
Photography: Sveinung BrĂĽthen Design: Anti
Akershus Eiendom
The Norwegian Commercial Property Market
Market Report Autumn 2016
Autumn 2016