Market Trends of Commercial Real Estate Industry
This section covers the major market trends shaping the Commercial Real Estate Market according to our research experts:
Increase in Transaction Volume in the Office Market of Scandinavian Countries
Swedish investment volumes for office spaces in 2018 reached EUR 15.1 billion (for transactions over SEK 40 million), while yields remaind at the low level of 3.4%. The total transaction volume for the year was slightly higher than the previous year’s volume worth EUR 14.7 billion, due to the substantial demand in the market.
Transaction volumes in Norway, in 2018, reached worth EUR 9.03 billion. The transaction volume was slightly less than the previous year's, as office yields arre still low. Office buildings dominated the total volume with roughly 41% share. For the first time, logistics surpassed the retail segment, with 21% and 16% of the total volume, respectively.
Office investment volume was approximately worthh EUR 2 billion for Denmark in 2018. The investment in industrial and logistics properties almost doubled from 4.5% to 8%, as buyers acquire core properties with a shortage of products. Transaction costs on commercial real estate investment in Denmark are very competitive.
Rising Rents in Oslo and Stockholm for the Office Market
The office market in Sweden has a lower supply, indicating that the growth in office rents is likely to continue, but the pace is slowing down. Stockholm still has the highest growth pace in Europe. Office demand remains strong with falling vacancies, though the lack of vacant stock slowed the net absorption rate in 2019.
The demand for office space improved in 2018 in Norway. However, the occupational market in Oslo is focusing on the space shortage situations. There is a lack of construction on new offices plus office space is getting converted to alternative uses like residential. The current situation is favoring rents positively, which increased since 2016, and they were expected to increase in 2019 as well.
