Key facts real estate 2014 Q1
Advertised office volume in Oslo (m²) 1,000,000 900,000 800,000
Commercial Real Estate
Prime yield*
5.00 %
Normal yield*
6.75 %
5-yr swap rate (per COB May. 9th)
2.49 %
Office letting market •
Advertised office space in greater-Oslo as of April 15th is approx. 11.2 % of the total building mass. This rate includes potential new office projects (approx. 3.5 %).
•
The vacancy rate (available within 12 months) is approx. 7.7 %. Average vacancy rate has been 7.4 % in 2014, while average vacancy rate in 2013 was 7.8 %.
•
15 premises larger than 10 000 m² and 34 premises above 5 000 m² are advertised as of April 15th.
•
There are several large office projects that will be released in the market shortly, such as Dronning Mauds gate 11 in CBD, Sundtkvartalet in the city centre and Økern senter at Økern.
•
Eureka Pumps is moving from Lysaker and into 3 000 m² at Fornebuporten. The building will be completed in the summer of 2015.
•
The Ministry of Foreign Affairs is moving into 7 000 m² in Kronprinsens gate 9 in central Oslo. The lease contract is 12 years.
•
The petroleum company BP (13 - 15 000 m²) and the telecommunication company Telenor (3 500 - 4 000 m²) are looking for new locations in Stavanger. They both received over 40 offers in the process.
700,000 600,000 500,000 400,000
Average of 15 % highest rents in Oslo**
3 300 NOK/m²/yr.
300,000 200,000
Office contracts signed** (Oslo)
137 490 m²
Largest office contract** (Oslo)
15 290 m²
100,000
> 5 000 sq.m
Q1 2014
Q2 2014*
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q1 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
Q1 2011
0
Avg. contract length** (Oslo)
*Source: Malling & Co **Source: Arealstatistikk Q1 2014
*April 2014
Source: FINN.no/Malling Co
Prime rents in Oslo (NOK/m²/yr) OFFICE CLUSTER
5.2 yrs.
< 5 000 sq.m
Yield development last 5 years
RENT
Δ 12 MTHS.
CBD (Vika/Aker Brygge/Tjuvholmen)
4 700
4%
Skøyen
3 500
17 %
Central Oslo
3 500
9%
Bjørvika
3 500
-
8.00%
7.00%
6.00%
5.00% Lysaker
2 350
-
Fornebu
2 150
2%
Nydalen/Sandaker
2 100
-5 %
Økern/Løren/Risløkka
2 100
11 %
4.00%
3.00% Apr-09
Apr-10
Apr-11
Apr-12
10 yr swap Bryn/Helsfyr
2 100
8%
Apr-13
Apr-14
Prime property
Normal property
Source: Malling & Co
Source: Malling & Co / Nordea
Transaction market •
So far in 2014, we have registered NOK 10 billion in transaction volume, divided into 40 transactions.
•
The transaction activity started somewhat slow in 2014, but has increased throughout recent months. We expect the activity to boost further throughout the year.
•
A healthy letting market, supported by a strong economy, available funding and less risk averse investors are key drivers for this.
•
International investors have been expected to increase their exposure towards Norwegian commercial real estate. So far in 2014, their stake of the investment volume is 19 %.
•
International investors are represented in 3 of the 7 largest transactions so far in 2014.
•
Prime office yield is estimated at 5 %. Secondary assets are still sought after, but financing is tighter, if available.
•
7 transactions have taken place at Økern/Løren/Risløkka so far this year. This is an up-and-coming neighboorhood, both in terms of residentials and commercial real estate. Investors are positioning.
Topic of the Month: Online shopping beats traditional shopping A total number of 677 retail stores bankrupted in 2013, an increase of 30 % since 2012. An important reason for this is probably the increasing use of online shopping services. Statistics Norway’s recent numbers show an overall retail growth of 2 % from 2012 to 2013, while the online shopping sales alone increased with 8.4 % in the same period. It is becoming increasingly easier to shop online, and the prices are often lower than in stores. New technology makes it possible to make online orders through new platforms like smartphones and tablets. Increased online shopping may be a serious threat for the need for large retail space. Expecting this trend to continue, we may see alternative use of retail space, i.e. where customers can try products and then order online. This trend may also create an increased demand for centrally located distribution warehouses. Nevertheless, the high street retail properties still remain highly attractive among tenants as these locations catch people where they live, work and travel. Retail sales index incl. online shopping (except sales of motor vehicles) vs. the online shopping index – 12 mth. : 30% 25% 20% 15% 10% 5% 0% -5% -10% 2010M01
2010M07
2011M01
2011M07 Total turnover
2012M01
2012M07
2013M01
2013M07
2014M01
Online shopping Source: Statistics Norway
Eiendomshuset Malling & Co Dronning Mauds gate 10, Postboks 1883 Vika, NO-0124 Oslo T: 24 02 80 00 – F: 24 02 80 01 – E: post@malling.no – www.malling.no