
Market Views, March 2025 | Logistics Market
Executive Summary Macro | Increased Uncertainty
Following a strong post-pandemic recovery, GDP growth in Norway has gradually cooled. Last year, mainland GDP expanded by only 0.6 percent, according to Statistics Norway.
Looking ahead, economic growth had been expected to strengthen, partly driven by a rebound in household consumption. This expectation was based on forecasts of improved purchasing power, supported by higher real wage growth and lower interest rates. However, interest rates now appear likely to remain higher than previously anticipated, which could dampen private consumption growth in the coming period. In turn, this may reduce short-term demand for storage space in the retail sector.
On the international stage, Donald Trump’s policies are fuelling concerns and uncertainty regarding geopolitical stability and global economic growth. Rising trade barriers worldwide are likely to weaken international trade, but they may also encourage production and storage facilities to move closer to domestic markets.
Another consequence of Trump’s "America First" policy is that European nations must take on greater responsibility for their own security. A significant military build-up is now expected across Norway and other European countries. As a result, demand for production and storage facilities in the defence sector is set to increase in the coming years.
Executive Summary CRE | Increased Demand Despite Rising Uncerainty
The rental market for logistics properties was sluggish in the first half of 2024 but gradually picked up throughout the year. This contributed to the stabilisation of rental prices in several parks after a period of strong rental price growth. The positivity from the end of last year has continued into 2025, and we are now experiencing increased activity in the rental market again.
Although persistent market turmoil may reduce activity, several factors point to increased warehouse and production needs moving forward. As mentioned in the macro section of the analysis, geopolitical risk and higher trade barriers are likely to lead to an increased need for domestic warehousing. Furthermore, we expect higher activity from certain specific sectors. The strengthening of the military sector will likely increase the need for warehouse and production space domestically, which has already been observed in several places in Europe.
Additionally, the pharmaceutical industry is growing, and several major players are planning significant investments in new production facilities worldwide, while also needing warehousing. Eventually, a return from retailers is expected as consumer spending picks up again. This, combined with a continued weak supply side, may contribute to rental price growth in the most sought-after logistics parks moving forward.
Various warehouse and logistics actors prioritise several factors when choosing a location. We experience that the main criteria are easy access to main transportation arteries, costs, and proximity to customers. A review of some selected established parks around Oslo reveals some interesting findings regarding the choice of location for the various tenants. Growth in the military and pharmaceutical industries, as well as a return from retailers eventually, will likely lead to increased demand in parks further from Oslo.
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