Real Estate for a changing world

Market Research - Sweden

Sweden : Stockholm office market - March 2020

CBD supply deficiency is transferring demand to new submarkets

As in previous years, market average rents in Stockholm continued to grow at a strong rate, with those in the CBD increasing to SEK 7,200/sqm/year (€682/sqm/year). Newsec estimates that prime rents in the CBD are now around SEK 9,300/sqm/year (€881/sqm/year), and the market expects breaching of the SEK 10,000/sqm barrier in 2020. The strongest rental growth is in the Arenastaden/Solna submarket, which witnessed many major lettings to occupiers in need of large space unavailable in the CBD. The area also has the strongest supply pipeline in Stockholm, owing to the submarket’s rising popularity and the stronger feasibility of carrying out major projects as space is less constrained. Though many occupiers would prefer to rent in the CBD, supply deficiency increasingly forces moves into Arenastaden and other suburbs. 

Swedish investment for 2019 reached SEK 218bn (€20.7 bn) for transactions over SEK 40m. It is the strongest trans-action volume to date and represents a 40% increase over the 2018 total of SEK 155.3bn (€14.7bn). A number of major M&A deals, as well as strong interest for the office, residential and logistics sectors drove the record volume. The prime office yield fell to 3.2%, and investors looking to purchase prime properties face fierce competition, both within the CBD and beyond. Geographically, the Stockholm market dominates with 41% of trans-action volume (€8.4bn), in line with previous years. The largest office transaction of the year occurred in Stockholm in September when Folksam purchased the Brädstapeln 17 property on Kungsholmen from Areim for SEK 4.3bn  (€0.41bn). This was just one of many major office transactions that occurred in 2019, with the segment accounting for 24% of transaction volume, second only to residential at 32%.


Stockholm EOM - March 2020
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