Office

International Office Market Update 2019 H1

High demand for space continues to push down vacancy rates and drive rents in virtually all regions and segments.

Nordic office markets

  • Transaction activity was high across all Nordic countries during 2018 with a preliminary volume of around EUR 25 bn.
  • High demand for space continues to push down vacancy rates and drive rents in virtually all regions and segments.
  • Interest in property investment continues to be high from non-Nordic investors, showing that the Nordic property market is still very liquid and attractive.

Stockholm

The Stockholm office market continues to perform well with high demand, limited supply, low vacancy rates, and rents growing.

High demand for new office space, combined with a decrease in available supply, fuels expectations of continued rental growth during 2019, possibly at a slower pace than previous years.

Prime yields will remain low and stable across all sub-markets during 2019.

Copenhagen

The total office investment transaction volume for 2018 was an increase on the volume of 2017. This development has happened on the backdrop of a slight cooling down of the overall Copenhagen real estate investment market.

The investment market is expected to remain strong, as investor interest shifts from the residential sector towards the office sector.

The vacancy rate in Copenhagen dropped further and was in H2 2018 at the lowest levels in ten years.

Helsinki

2018 was a strong year for the Helsinki office leasing market, boosted by a growing economy.

International investors continue to show a keen interest in the Helsinki office market, helped by an unprecedented amount of high-quality assets for sale, and a robust occupier market.

High demand, diminishing supply of space, and strong pressure on asking rents in the CBD will push demand to neighbouring areas where more rental growth is expected.

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, Copenhagen, and Helsinki is expected to slow down. Oslo is currently at the 07:30 position, representing an improvement in rental growth during the first half of 2018.