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Market Research - Sweden

Sweden : Stockholm office market - March 2019

Most leasing and construction activity is occurring in submarkets outside the CBD

Space shortage is causing rents to rise in the centre

Market rents in Stockholm have continued to grow rapidly with those in the CBD, increasing to SEK 6,750/sq m/year (€658/ sq m/year). Newsec estimates that top rents in the CBD lie around SEK 8,200/ sq m/year (€800/sq m/year), while some property owners have reported rents above these levels. Rental levels have remained high primarily due to continued low delivery of new office stock in Stockholm CBD, combined with substantial demand. The market rent is expected to continue to rise throughout 2019.

 

Investment market strength keeps pressure on prime yields

 

A strong Q3 and Q4 helped Swedish investment volumes for 2018 reach SEK 155.3bn (€15.1bn) (for transactions over SEK 40m), while yields will remain at the low level of 3.4%. The total transaction volume for the year is slightly higher than the previous year’s volume of SEK 150.6bn (€14.7bn). Geographically, the Stockholm market dominates with 41% of transaction volume (€6.21bn), a slightly higher share than previous years. As with 2017 only a limited number of office deals were signed in Stockholm CBD in 2018. With most leasing and construction activity occurring in attractive submarkets such as Solna, investor interest focused on these locations. In October, Stockholm’s largest office transaction of the year occurred when Folksam acquired Blästern 6 and Roddaren 7 in central Stockholm from Atrium Ljungberg for SEK 2.2bn (€212m).

 

Stockholm EOM - March 2019
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