malling & co market report winter 2015 lr
DESCRIPTION
The report also contains an interview with CEO at MAD Arkitekter, Nicolai Riise - who tells about the essentials to defend Oslo's position as a leading international metropolis.TRANSCRIPT
www.malling.no
MARKET REPORT WINTER 2015
PAGE 2 MARKET REPORT WINTER 2015 / MACRO
2014 was a great anniversary year here at Malling & Co. Even though there was a lot of focus on our past
during the last year, we have not forgotten to keep our sights set on the future. Oslo is growing rapidly and our
organization is growing correspondingly. We expect the next 50 years to be even more exciting than the
previous 50, and we will continue to shape the industry.
The Norwegian economy demonstrated relatively moderate growth in 2014. At the time of writing, oil prices had fallen from around USD 110 to around USD 50 a barrel. As an oil nation, the forecasts for Norway indicate reduced growth in the next few years. In the real estate market, we are now experiencing that more companies in the petroleum industry are looking to sublet spaces they previously used themselves, rather than expanding.
In the long term, however, the economic growth is expected to pick up, and we believe that the negative growth expectations could quickly become positive among tenants during the course of the coming year. After all, a lot is happening in Oslo! A relatively low supply of new construction in the office market, combined with a potential increase in activity up to 2016, could create a very exciting market in the future. We remain positive!
Even though the rental market was modest this year, we can see that other parts of our business have experienced strong growth. There is high demand for good commercial property among both Norwegian and foreign investors. This applies to the latter in particular; foreign investors are motivated by a strong Norwegian economy and low returns in other European markets and they have made a serious entry into the market. Falling long-term interest rates, the banks’ willingness to increase their exposure to commercial property and a large supply of capital have all contributed to the current recovery of the transaction market. Although a slight generalization, “everyone” is in the market for
commercial property. We are looking forward to the time ahead, and hope to contribute to an active market by assisting both domestic and foreign investors.
As mentioned in our guest comment, Oslo is establishing itself as a major city. We have gained a “skyline” in Bjørvika, and an exciting American says he will transform the commercial space at the upper end of Oslo’s main street, Karl Johan, into a high-end district. Several major international players within both the fashion industry and the food and beverage industry are considering Norway, and more will come. This does seem to be another sure sign that Oslo is in the process of gaining recognition as a major city. We think it is exciting to watch the city develop, and we are very optimistic about the next 50 years and all of the great changes that will occur.
We hope that our clients and business partners will be pleased with our most recent report. Enjoy the read!
peter t. mallingchairman
eiendomshuset malling & co
PAGE 2 MARKET REPORT WINTER 2015 / INTRODUCTION
“EVERYONE” IS LOOKING FOR COMMERCIAL PROPERTY
CONTENTSIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Macro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4The rental market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Stavanger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Drammen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 The transaction market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Oslo breaks the sound barrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40About Malling & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EDITING COMPLETED January 21th 2015DESIGN OG LAYOUT Børresen & Co
CONTENTS / MARKET REPORT WINTER 2015 PAGE 3
› Statistics Norway (SSB) estimates that the Norwegian mainland economy grew by 2.6 % in 2014. SSB’s forecasts show that it expects a growth rate of 1.0 % in 2015, 2.2 % in 2016, and 2.7 % in 2017. In other words, Statistics Norway expects the economic downturn to be sharp, but short-lived.
› Since SSB’s forecasts were published in the start of December 2014, expectations to the oil price have fallen sharply. DNB markets expects an average oil price of 65 dollars in 2015, USD 5 lower than the price on which the Bank of Norway bases its forecasts. As a result of this, DNB Markets’ estimates for economic growth have been adjusted downwards: 1.2 % in 2015, and 1.7 % in 2016.
› In October 2014, the unemployment rate (LFS) was 3.8 % – up 0.3 percentage points since July 2014. These numbers are, however, volatile. The annual average is 3.5 %, but is expected to rise in the future.
› The inflation rate (CPI rate) was 2.1 % in December and is expected to remain below, but close to, the target of 2.5 % in the future. A weakening of the Norwegian krone during 2013 has resulted in higher imported inflation. This effect is expected to diminish as foreign inflation rates are reduced and the krone stabilises at a low level.
› Much of the growth in the Norwegian economy in recent years has been the result of favourable trade conditions driven by high oil prices. SSB’s surveys indicate that investments in the petroleum sector in 2014 was about NOK 220 billion – close to 10 % of mainland GDP. › Oil prices have recently fallen to what some economists refer to as “normal” levels, and brent crude oil is now being traded for around USD 50 a barrel. If the price slump persists, fewer projects will be
MACRO – NORWAYTHE DECLINING OIL PRICE TAKES ITS TOLL ON THE ECONOMY
MAIN FIGURES (GROWTH IN %) 2013 2014 2015E 2016E 2017E
Privat spending 2 .1 2 .1 1 .4 2 .4 2 .6
Public spending 1 .7 3 .1 2 .5 2 .3 2 .0
Gross investments in capital goods 6 .8 1 .3 -2 .8 1 .1 3 .5
– gross investments, mainland-Norway 2 .9 2 .2 1 .2 4 .0 5 .2
– gross investments, oil 17 .1 -0 .7 -12 .8 -7 .2 -1 .8
Export -3 .0 1 .0 0 .8 1 .4 1 .9
– oil & gas -7 .6 -0 .8 -0 .8 -0 .5 -0 .4
– traditional goods 1 .0 2 .9 3 .1 3 .9 4 .5
Import 4 .3 2 .8 1 .8 2 .0 1 .5
GDP 0 .7 2 .2 0 .5 1 .6 2 .1
GDP Mainland-Norway 2 .3 2 .6 1 .0 2 .2 2 .7
Unemployment rate 3 .5 3 .5 3 .9 4 .0 3 .7
Job vacancies 1 .0 1 .1 0 .6 0 .5 0 .8
Employed labour force 1 .2 1 .1 0 .2 0 .2 1 .1
CPI - yearly growth 2 .1 2 .1 2 .6 2 .0 1 .7
Core inflation (CPI-ATE) 1 .6 2 .5 2 .8 2 .0 1 .7
Yearly salary incl. pension cost - yearly growth 3 .9 3 .3 3 .1 3 .3 3 .3
Operating balance (Bn. NOK.) 299 .6 278 .7 234 .8 244 .4 287 .8
Operating balance (in % of GDP) 10 .5 8 .9 7 .5 7 .5 8 .5
Over time, the Norwegian economy has maintained a higher growth rate than its neighbouring countries. Unemployment rates have been low and, in recent years, inflation has approached its target level of 2.5 %. Since our last market report, however, the economic forecasts have been somewhat reduced. The petroleum sector - a substantial impetus for growth in the Norwegian economy - is expected to reduce its investments significantly. This has already led to the central bank cutting its policy rate by 25 basis points, and the possibility of another rate cut in the near-term future is substantial.
Source: Statistics Norw
ay
GDP GROWTH MAINLAND NORWAY
Source: Statistics Norw
ay
LABOUR MARKET LAST 5 YEARS
Unemployment rate (L . axis) Labour force in 1,000 people (R . axis)
Employment work force (R . axis)
Source: Statistics Norw
ay
Oct
. 09
Jan .
10
Jan .
11
Jan .
12
Jan .
13
Jan .
14
Apr
. 10
Apr
. 11
Apr
. 12
Apr
. 13
Apr
. 14
Jul .
10
Jul .
11
Jul .
12
Jul .
13
Jul .
14
Oct
. 10
Oct
. 11
Oct
. 12
Oct
. 13
Oct
. 14
2400
2450
2500
2550
2600
2650
2700
2750
2800
2,8 %
3,0 %
3,2 %
3,4 %
3,6 %
3,8 %
4,0 %
Mon
th10
-13
Mon
th1-
14
Mon
th4-
14
Mon
th7-
14
Mon
th10
-14
Mon
th1-
15
Mon
th4-
15
Mon
th7-
15
Mon
th10
-15
Mon
th1-
16
Mon
th4-
16
Mon
th7-
16
Mon
th10
-16
Mon
th1-
17
Mon
th4-
17
Mon
th7-
17
Mon
th10
-17
Mon
th1-
18
Mon
th4-
18
Mon
th7-
18
Mon
th10
-18
2,800
2,750
2,700
2,650
2,600
2,550
2,500
2,450
2,400
8 .00 %
6 .00 %
4 .00 %
2 .00 %
0 .00 %
-2 .00 %
4 .0 %
3 .8 %
3 .6 %
3 .4 %
3 .2 %
3 .0 %
2 .8 %
-2,00 %
0,00 %
2,00 %
4,00 %
6,00 %
8,00 %
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
2017
E
PAGE 4 MARKET REPORT WINTER 2015 / MACRO
profitable and the investment volume will therefore be reduced. If this scenario occurs, the consequences will, by all accounts, force the Bank of Norway into action. Some economists have advocated that the policy base rate in such a scenario should be halved.
› In the wake of the declining oil prices, SSB expects that the investment volumes will decline by 13 % in 2015, 7 % in 2016 and a further 2 % in 2017.
› It is not unlikely that future fiscal policy will be more expansive. The value of the Norwegian Government Pension Fund Global is, at the time of writing, around NOK 6,500 billion - close to twice the Norwegian GDP.
› Following a period of high real wage growth, SSB expects the growth rate to decline to 0.5 % in 2015. Weak growth in productivity means that Norwegian industry has become increasingly less competitive, but this effect could be offset by a persistently weak krone.
› The Government’s National Budget for 2015 includes NOK 163.7 billion in oil revenue, 3.0 % of the oil fund’s value. Furthermore, the tax assess- ment value of commercial property is increased from 60 % to 80 % and limited liability partnerships will no longer be able to use deficits from participation in a company for deductions in their ordinary income from other sources.
› After a plateauing in 2013, the twelve-month growth in house prices was
5.3 % in October last year. Statistics Norway expects the (nominal) house prices to remain constant throughout 2015, before they are expected to increase in 2016 and 2017. Housing investments prices are expected to remain relative flat this year, before the growth rate is expected to gradually increase to about 5 % in 2017.
› Order books in the construction industry have grown steadily since the financial crisis.
› After the sharp deterioration of the krone during 2013, the currency stabilised at a low level in the first half of 2014. In recent time, the currency has fluctuated strongly.
› Swap interest rates have dropped sharply over the past year and are now at historically low levels. In the end of January 2015, the 10-year swap rate was 1.65 %.
› The household savings rate was 8.1 % in 2014 – up 4 percentage points since 2008.
› The indebtedness of Norwegian households is at around 200 % of their disposable income. This indicator has raised concerns at both the Bank of Norway and the Norwegian Financial Supervisory Authority.
› The Ministry of Finance has decided that banks should hold a counter- cyclical capital buffer of one percent as of 30th June 2015.
INFLATION (12 MONTHS CHANGE)
CPI-ATE CPI
HOUSE PRICE INDEX (2005 = 100) CONSTRUCTION NEW ORDERS (2010 = 100)
Source: Statistics Norw
aySource: Statistics N
orway
Source: Statistics Norw
ay
SELECTED INTEREST RATES LAST 5 YEARS
10 yr swap Key policy rate 3 month Nibor 5 yr swap
Residential buildings Non-residential buildings Construction other
Source: Komm
unalbanken
Des
. 09
Des
. 10
Des
. 11
Des
. 12
Des
. 13
Des
. 14
Jan .
10
Jan .
11
Jan .
12
Jan .
13
Jan .
14
Apr
. 10
Apr
. 11
Apr
. 12
Apr
. 13
Apr
. 14
Jul .
10
Jul .
11
Jul .
12
Jul .
13
Jul .
14
Oct
. 10
Oct
. 11
Oct
. 12
Oct
. 13
Oct
. 14
Jan .
15
Mar
. 10
Mar
. 11
Mar
. 12
Mar
. 13
Mar
. 14
Jun .
10
Jun .
11
Jun .
12
Jun .
13
Jun .
14
Sep .
10
Sep .
11
Sep .
12
Sep .
13
Sep .
14
0,00 %
0,50 %
1,00 %
1,50 %
2,00 %
2,50 %
3,00 %
3,50 %
Month12-13
Month3-14
Month6-14
Month9-14
Month12-14
Month3-15
Month6-15
Month9-15
Month12-15
Month3-16
Month6-16
Month9-16
Month12-16
Month3-17
Month6-17
Month9-17
Month12-17
Month3-18
Month6-18
Month9-18
Month12-18
0,00 %
0,50 %
1,00 %
1,50 %
2,00 %
2,50 %
3,00 %
3,50 %
Month12-13
Month3-14
Month6-14
Month9-14
Month12-14
Month3-15
Month6-15
Month9-15
Month12-15
Month3-16
Month6-16
Month9-16
Month12-16
Month3-17
Month6-17
Month9-17
Month12-17
Month3-18
Month6-18
Month9-18
Month12-18
0,00 %
1,00 %
2,00 %
3,00 %
4,00 %
5,00 %
Mon
th1-
14
Mon
th4-
14
Mon
th7-
14
Mon
th10
-14
Mon
th1-
15
Mon
th4-
15
Mon
th7-
15
Mon
th10
-15
Mon
th1-
16
Mon
th4-
16
Mon
th7-
16
Mon
th10
-16
Mon
th1-
17
Mon
th4-
17
Mon
th7-
17
Mon
th10
-17
Mon
th1-
18
Mon
th4-
18
Mon
th7-
18
Mon
th10
-18
Mon
th1-
19
10 yr swap Key policy rate
3 month Nibor 5 yr swap
120
130
140
150
160
170
180
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
0
20
40
60
80
100
120
140
160
180
200
Q1 2005
Q3 2005
Q1 2006
Q3 2006
Q1 2007
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Q3 2014
Residen'al buildings
Non-‐residen'al buildings
Civil engineering works
3 .50 % 5 .00 %
4 .00 %
3 .00 %
2 .00 %
1 .00 %
0 .00 %
3 .00 %
2 .50 %
2 .00 %
1 .50 %
1 .00 %
0 .50 %
0 .00 %
MACRO / MARKET REPORT WINTER 2015 PAGE 5
As we have entered 2015, the global economy is showing some signs that are healthy as well as more signs of weakness. The positive trends in the United States and the United Kingdom have to a large extent been overshadowed by the uncertainty in the Chinese economy, the Japanese economy and the fragility of the Euro zone. In addition, the Ukraine crisis, the Greek election and the ensuing sanctions have increased political tension in Europe. As a response to the persistent economic headwind, central banks have cut key interest rates and several have adopted quantitative easing. This - along with the economic situation in Norway- has resulted in very low interest rates in Norway as well.
MACRO – GLOBALLYPERSISTENT HEADWIND
Source: IMF W
orld Economic O
utlook
GDP growth (annual percentage) 2013 2014 2015E 2016E 2017E
World 3 .3 % 3 .3 % 3 .8 % 4 .0 % 4 .1 %
United States 2 .2 % 2 .2 % 3 .1 % 3 .0 % 3 .0 %
EU-28 0 .2 % 1 .4 % 1 .8 % 2 .0 % 2 .0 %
Euro area -0 .4 % 0 .8 % 1 .3 % 1 .7 % 1 .7 %
Emergin market and developing economies 1 .3 % 1 .8 % 2 .3 % 2 .3 % 2 .3 %
Central and Eastern Europe 2 .6 % 3 .2 % 3 .5 % 3 .7 % 3 .8 %
Germany 0 .5 % 1 .4 % 1 .5 % 1 .8 % 1 .6 %
France 0 .3 % 0 .4 % 1 .0 % 1 .6 % 1 .8 %
United Kingdom 1 .7 % 3 .2 % 2 .7 % 2 .4 % 2 .4 %
Sweden 1 .6 % 2 .1 % 2 .7 % 2 .7 % 2 .6 %
Denmark 0 .4 % 1 .5 % 1 .8 % 1 .9 % 2 .0 %
Italy -1 .9 % -0 .2 % 0 .9 % 1 .3 % 1 .3 %
Japan 1 .5 % 0 .9 % 0 .8 % 0 .8 % 0 .9 %
China 7 .7 % 7 .4 % 7 .1 % 6 .8 % 6 .6 %
Russia 1 .3 % 0 .2 % 0 .5 % 1 .5 % 1 .8 %
Middle East and North Africa 2 .3 % 2 .6 % 3 .8 % 4 .5 % 4 .4 %
› Global economic growth for 2014 is estimated to 3.3 %, the same as in 2013.
› Economic growth in the Eurozone in 2014 is estimated to 0.8 %. The unemployment rate in the Eurozone has fallen somewhat, from 11.8 % at the start of 2014 to 11.5 % in November.
› The European Central Bank is reacting to increasingly weaker macro figures. In the last summer, the deposit rate was set at -0.20 %, and the Central Bank implemented a somewhat limited quantitative easing to boost balance sheets by 50 %. These actions were in January followed up by the decision to implement large-scale purchases of government bonds.
› As a result of inflation numbers falling close to zero, the Swedish Central Bank considers to cut its policy rate into negative territory. In addition, the Governor has hinted that the central bank considers more unconvential monetary policy measures.
› At the end of October, the European Banking Authority concluded that 13 banks in the Euro zone do not have sufficient assets to face a new financial crisis. Most of these are Italian, Portuguese or Cypriot. › The United Kingdom’s economy is estimated to have grown by about 3 % in 2014 and GDP is now above the level it was at before the financial crisis. Despite economic growth, the lack of productivity growth poses a major challenge. The housing market is another source of uncertainty. The September figures showed that house prices in London rose by 19.1% in a single year.
› The US economic growth was around 2.4 % in 2014, and the economy is estimated to grow by 3.6 % in 2015 and 3.3 % in 2016. Despite strong GDP figures, the US is struggling with low participation in the workforce. The current participation rate of 62.7 % is the lowest rate since 1978. The Federal Reserve finished its third programme of quantitative easing in 2014. Of the 17 members of the Committee that are eligible to vote, 14 expect the key rate to be increased in 2015. However, there is a significant downside risk in the economy since the mid-term elections in the fall impede the President’s ability to implement political measures.
› In the wake of its extraordinary monetary policy, Japan has experienced economic hardship after a tax increase in April 2014, and the Japanese authorities have now decided to postpone next year’s planned tax increase. In addition, the Bank of Japan stepped up its quantitative easing program in the autumn.
› China is growing slower compared to previous years. The IMF estimates that growth will fall from 7.7 % in 2013 to 7.4 % in 2014, and it is expected that economic growth will continue to slow even more in the years ahead. House prices have levelled off, and in September they fell (year on year) for the first time in a long time. Furthermore, the investment climate was not improved by last fall’s protests held by students in Hong Kong to oppose the Chinese influence on their political system.
Source: Eurostat
UNEMPLOYMENT RATE IN SELECTED COUNTRIES/AREAS
0,00 %
5,00 %
10,00 %
15,00 %
20,00 %
25,00 %
30,00 %
Norway
Japan
German
y
Icelan
d
Denmark
USA
UK
Sweden
Finland
France
EU
Eurozo
ne
Irelan
d Ita
ly
Portug
al
Spain
Greece
30 .00 %
25 .00 %
20 .00 %
15 .00 %
10 .00 %
5 .00 %
0 .00 %
PAGE 6 MARKET REPORT WINTER 2015 / MACRO
GRENSEVEIEN 95, HELSFYR
Malling & Co Corporate Real Estate assisted DNB Liv in the sale of an attractive, recently renovated office building at Helsfyr with a total space of 10,600 m2.
MACRO / MARKET REPORT WINTER 2015 PAGE 7
Moderate growth in employment until 2016The Manpower Employment Outlook Survey identifies net expected staffing (see definition at the bottom of the page). According to the survey, just prior to Q1 2015, medium-sized companies plan to increase their staffing in the next quarter (Q1 2015), while large companies are expecting a decline in the need for labour. The survey shows that more companies plan to increase staffing levels in the upcoming quarter than to downsize. This has been the case for all quarters since the survey began in 2010. Companies’ expected staffing levels, in the same way as the trend in the employment growth rate, have been experiencing a downward trend since 2012. Statistics Norway expects the growth rate to continue to fall up to 2016. The economy is expected to start recovering gradually in 2016, and this recovery will manifest itself in higher growth in employment. Weak expectations among businesses in the Greater Oslo areaCompared to the data for Q4 2014 the Outlook* in Greater Oslo declines by 6 percentage points. Companies in South and West Norway have an overall more negative view of Q1 2015 than companies in other regions, while employers in both Mid and Northern Norway report improving hiring prospects, with Outlooks improving 2 % and 3 %, respectively, this quarter. Weak employment in the public and social sectorAll of the nine sectors in the survey, except public and social, expect an increase in staffing levels in Q1 2015. The most “office-based” sector, finance/insurance/real estate/business services, has shown an increase of 6 percentage points since the previous quarter.
Employment obviously has a large impact on the office rental market. Forecasts from Statistics Norway indicate modest growth in employment over the next few years before the economy turns upward in 2016.
DEMAND IN THE RENTAL MARKET WEAK GROWTH IN EMPLOYMENT IN THE NEXT FEW YEARS
NET EMPLOYMENT OUTLOOK* – DEVELOPMENT OVER TIME (SEASONALLY ADJUSTED)
Source: Manpow
er Employm
ent Outlook Survey (Q
1 2015)
UNEMPLOYMENT AND EMPLOYMENT IN NORWAY
Source: Statistics Norw
ay
NET EMPLOYMENT OUTLOOK* – REGIONAL COMPARISONS (SEASONALLY ADJUSTED)
NET EMPLOYMENT OUTLOOK* – SECTOR COMPARISONS (SEASONALLY ADJUSTED)
Source: Manpow
er Employm
ent Outlook Survey (Q
1 2015)Source: M
anpower Em
ployment O
utlook Survey (Q1 2015)
*Net Employment Outlook is derived by taking the percentage of employers anticipating an increase in hiring activity and subtracting from this the percentage of employers expecting to see a decrease in employment at their location in the next quarter (Q1 2015) .
Unemployment rate Expected unemployment rate
Employment growth
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
16 %
Q1 2
010
Q2
2010
Q3
2010
Q4
2010
Q1 2
011
Q2
2011
Q3
2011
Q4
2011
Q1 2
012
Q2
2012
Q3
2012
Q4
2012
Q1 2
013
Q2
2013
Q3
2013
Q4
2013
Q1 2
014
Q2
2014
Q3
2014
Q4
2014
Q1 2
015
7 %
6 %
5 %
-3 %
1 %
-4 % -2 % 0 % 2 % 4 % 6 % 8 %
Eastern Norway
Northern Norway
Mid Norway
South/West Norway
Greater Oslo
4 %
2 %
-1 %
21 %
5 %
13 %
4 %
7 %
2 %
-5 % 0 % 5 % 10 % 15 % 20 % 25 %
Wholesale, Retail, Restaurant & Hotels
Transport, Storage & Communication
Public and Social
Mining & Quarrying
Manufacturing
Finance, Insurance, Real Estate & Business Services
Electricity, Gas & Water
Construction
Agriculture, Hunting, Forestry & Fishing
4 %
2 %
-1 %
21 %
5 %
13 %
4 %
7 %
2 %
-5 % 0 % 5 % 10 % 15 % 20 % 25 %
Wholesale, Retail, Restaurant & Hotels
Transport, Storage & Communication
Public and Social
Mining & Quarrying
Manufacturing
Finance, Insurance, Real Estate & Business Services
Electricity, Gas & Water
Construction
Agriculture, Hunting, Forestry & Fishing
-2 %
-1 %
0 %
1 %
2 %
3 %
4 %
5 %
2003 2004
2005 2006
2007
2008
2009
2010
2011
2012 2013
2014E
2015E
2016E
2017E
Unemployment rate Employment growth
South/West Norway
PAGE 8 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
BAYER, DRAMMENSVEIEN 288, LYSAKER
Malling & Co Leietakerrådgivning assisted Bayer in the search for a new head office and the estab-lishment of a lease for approximately 4,400 m2 at Drammensveien 288.
Photo: KLP Eiendom
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 9
POSTHUSKVARTALET, KVADRATUREN
Malling & Co Corporate Real Estate assisted Søylen Eiendom in the sale of office and retail properties totalling almost 20,000 m2 that are centrally located in Kvadraturen.
PAGE 10 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
Several major market searches increased the total volume for 2014Measured by the number of square metres, offices represent about 70 % of all rental market searches from 2009 until end of 2014, while combined premises constitute most of the remaining demand. On average, searches for office rentals are looking for an space of about 2,500 m2, and this number is somewhat higher for combined premises. In 2014, the average space in each office rental search was around 2,300 m2 and the corresponding figure for 2013 was only 1,500 m2.
There were only a few large searches in 2012 and 2013, which has an effect on the total volume sought after. This could be because few major leases will expire between 2015 and 2017. Very few tenants searching for space smaller than 1,000 m2 use search agents for a relocation, which means that the expiry of smaller leases does not have the same effect on search volumes as the expiry of larger leases. Several major tenants have leases that expire between 2018 and 2019, so volume of rental market searches are expected to increase in coming years, as many large tenures are approaching their expiry dates.
Larger tenants start searching early We see that larger tenants start their searches for new office space earlier than smaller tenants do. According to our analyses for the period January 2013 to the present, 2 out of 3 tenants utilising more than 5,000 m2 start two to four years before desired start of new lease, while almost 30 % of tenants requiring more than 5,000 m2 start searching for office space only one year ahead. Searching processes for less than 5,000 m2 start later; more than 80 % start their search the same year or the year before. We see a steady decrease in the number of searches for space greater than 5,000 m2 that start more than 2 years before desired occupancy. Understanding these trends enables us to predict demand based on known contract expiry profiles. Public sector, IT/telecom and oil/gas are largestAccording to our data, public sector tenants make up 15 % of rental market searches in terms of the number of square metres, and they are the largest industry for rental market searches during the period 2009 to the present.
In 2014, public sector tenants accounted for approximately 22 % of rental market searches measured in square metres. In 2012 and 2013, oil/gas and banking/finance/insurance, respectively, searched for the largest space.
The city centre is more sought after than the outlying zonesSince 2009, Malling & Co has identified the most popular areas in Greater Oslo that tenants specify in their searches. The city centre is defined here as the area within Ring Road 2 (includes Skøyen). It appears that more than 80 % of all rental searches specify city centre areas as the desired location for their offices, while 39 % and 45 %, respectively, look at fringe areas in the west and east. Of the rental searches, 35 % only want city centre locations, while 18 % are only interested in fringe areas. Of all rental searches, 18 % mention both city centre areas and fringe areas in their rental market searches. However, only 1 % of all rental searches request both fringe areas in the wes and east, but not city centre. This analysis indicates how desirable centrally located office buildings are for tenants in the market for new premises. Nevertheless, around 40 % of the total volume of signed lease agreements are signed for the fringe zones according to Arealstatistikk. This may be due to high rent levels in the city centre. Even so, we are still seeing that the percentage entering into contracts in the city centre has increased steadily since 2011.
TENANT REPRESENTATION: MARKET SEARCH FOR OFFICES CITY CENTRE AREAS ARE IN GREATEST DEMANDTenant Representation agents map tenants’ requirements on location and facilities and manage the actual search for the new commercial space. This applies to offices, combined premises, retail and warehousing/logistics. Larger tenants are more likely to use tenant representation agents, but many small and medium-sized businesses also receive assistance during their relocation process. Malling & Co registers and systematises all market searches covering the Greater Oslo area. This makes it possible to analyse one of the main sources of demand in the market. Our figures show that rental searches account for between 17 % and 49 % of the total annual volume (measured in square metres) of signed office lease agreements. Our analysis of market searches goes back to 2009 and includes more than 700 searches to date, of which nearly 500 are pure office market searches.
Source: Malling &
Co
AREA MAPPING OF OFFICE SEARCH 2009 – 2014
Source: Malling &
Co
Source: Malling &
Co
OFFICE MARKET SEARCH DATA 2009 – 2014 (M2) DISTRIBUTION OF TIME BETWEEN PUBLICATION OF MARKET SEARCH AND DESIRED LEASE STARTUP (M2)
‹ 5,000 m2 > 5,000 m2 (Datasets from January 2013 – January 2015)
35 %
17 %
9 %
18 %
12 %
8 %
1 %
Fringe zone (east)
Fringe zone (west)
Central Oslo
> 5,000 2,500–4,999 1,000–2,499 500–999 0–499
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
Same year The year after 2 years after 3 years after 4 years after
< 5 000 m² >= 5 000 m²
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
350,000
300,000
250,000
200,000
150,000
100,000
50,000
00
50 000
100 000
150 000
200 000
250 000
300 000
350 000
2009 2010 2011 2012 2013 2014
1000-‐2499 m² 500-‐999 m² 0-‐499 m² Størrelse
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 11
NEW CONSTRUCTION IN GREATER OSLOLOWER BUILDING ACTIVITY AFTER 2015Measured by the number of square metres, completion of office buildings in 2014 was only one-third of the average annual completion since 1990. This year, almost four times as many square metres of new office space will be completed compared to 2014. Leases have already been signed for 85 % of this area, indicating that the level of speculative construction is low. A total of only 7 new construction projects have so far been registered for 2016 and 2017. With a construction period of 18-24 months, more buildings will probably not be realised during 2016.
INNER CITY
OSLO WEST
OSLO EAST
OSLO OUTER EAST
OSLO OUTER SOUTH
OSLO OUTER WEST
Oslo�orden
BÆRUM
ASKER
Source: Malling &
Co/Norsk Eiendom
sinformasjon AS
Source: Malling &
Co
HISTORICAL COMPLETION OF NEW OFFICE BUILDINGS IN GREATER OSLO (IN M²)
COMPLETION OF NEW OFFICE BUILDINGS THAT IS FINALIZED 2015 – 2017
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
20002001
20022003
20042005
20062007
20082009
2010 20112012
20132014
20152016
2017
15,000 m2
Annual average 1990-2015
The size of the bubble represents the volume of new office buildings in each office cluster .
2015 2016 2017
Signed
Vacant
PAGE 12 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
New construction projectsMost new construction projects can be found in the development area Økern/Løren/Risløkka. In this area, more than 150,000 m2 of office space is under contract or waiting for tenants, and 150,000 m2 is in the design phase and expected to come onto the market in the next few years. The extensive changes to the road network are nearing completion. The “Lørenbanen” metro is under construction, with completion scheduled for the end of 2016/beginning of 2017. At Bryn/Helsfyr, the Valle Hovin area was recently rezoned to 170,000 m2 of office, residential, school and sports space, with more than 60,000 m2 zoned for office purposes. At Østensjøveien 40-52, an entire block has been rezoned and a total of 50,000 m2 of new commercial space can be built. The Alnafossen office park at Brynsengfaret 6 (12,000 m2) and Tvetenveien 8 (8,300 m2) is awaiting tenants. Among the largest development projects in the city is Entra’s project at Tullinkvartalet totalling 70,000 m2. Entra, in collaboration with Skanska, started construction on Sundtkvartalet, a new build construction totalling 30,000 m2. Skanska will move its head office from Drammensveien 60 to 8,100 m2 in this building at the end of the 2016/beginning of 2017. The new headquarters of Statoil Fuel and Retail at Schweigaardsgate 16 are nearing completion (Q2 2015). There is still 3,100 m2 vacant in the building. KLP
Eiendom is planning a new construction of a total of 75,000 m2 (55,000 m2 of office space) in Biskop Gunnerus gate 14 B, close to Oslo Central Station. The progress is yet unclear, as the project is still waiting for planning approval. The entire Aker group, around 4,000 employees, will move into two new buildings at Fornebuporten when they complete in June 2015 and June 2016. These buildings together comprise 80,000 m2. In Bjørvika, “Diagonale” (15,000 m2 of office space) and “Eufemia” (19,500 m2
of office space) make up more than 80 % of the available space in the area. Bjørvika is starting to take shape now that Barcode row is approaching completion and parts of Dronning Eufemias gate have opened for traffic. We believe that the large volume of planned office buildings at Økern/Løren/Risløkka and Bryn/Helsfyr will maintain the strong supply offering of property available in the fringe zone in the next few years and thus limit price growth in competing fringe zones, such as Bryn/Helsfyr and Nydalen/Sandaker. The Økern district transformation will be developed into a new suburb in the next 20-30 years, similar to the trend we have seen in Nydalen. The considerable demand for centrally located office buildings with a high standard leads us to believe that more of the new construction projects in the inner city and Bjørvika will be realized over the next few years.
14 000
15 000
16 000
17 000
18 000
19 000
20 000
21 000
22 000
2005 2006
2007 2008
2009 2010
2011 2012
2013 2014
Construction costsIn early 2014, construction costs appeared to be on their way down for the first time since 2009. Since then, the level of activity in the housing market has recovered, and we now find ourselves at a historically high level. The sharp increase we have seen since 2009 has been due to, among other things, higher margins, increased labour costs, higher material costs and, not in the least, greater demands on the level of standards. Still, few new office constructions are expected after 2015. Planned new constructions typically take 18-24 months to complete after signing the contract, so it is still possible for more buildings to be completed during the course of 2016 and 2017. We are expecting low new construction activity up to 2019, as few of the contracts of large tenants expire during this period.
Source: Malling &
Co
CONSTRUCTION COSTS* (NOK/M2)
*Based on 80 projects in the period 2005-2014 . Average construction costs each year .
NEW OFFICE CONSTRUCTION VOLUME AND PROJECT STATUS IN DIFFERENT CLUSTERS (M2)
Signed lease contract Waiting for tenants Planned Regulation not completed
Source: Malling &
Co
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000
Kvadraturen Ytre by vest
Andre områder Ytre by øst Billingstad Majorstua
Vika/Aker Brygge/Tjuvholmen Oslo Sentrum
Sandvika Oslo ytre syd
Lysaker Nydalen/Sandaker
Asker Skøyen
Oslo ytre øst Oslo ytre vest
Bjørvika Indre Sentrum
Fornebu Bryn/Helsfyr
Økern/Løren/Risløkka
Signert leiekontrakt Avventer leietakere Prosjektert Ikke ferdig regulert
Almost 800,000 m², where the zoning is not completed for approx.
440,000 m²
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000
Kvadraturen Ytre by vest
Andre områder Ytre by øst Billingstad Majorstua
Vika/Aker Brygge/Tjuvholmen Oslo Sentrum
Sandvika Oslo ytre syd
Lysaker Nydalen/Sandaker
Asker Skøyen
Oslo ytre øst Oslo ytre vest
Bjørvika Indre Sentrum
Fornebu Bryn/Helsfyr
Økern/Løren/Risløkka
Signert leiekontrakt Avventer leietakere Prosjektert Ikke ferdig regulert
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000
Kvadraturen Ytre by vest
Andre områder Ytre by øst Billingstad Majorstua
Vika/Aker Brygge/Tjuvholmen Oslo Sentrum
Sandvika Oslo ytre syd
Lysaker Nydalen/Sandaker
Asker Skøyen
Oslo ytre øst Oslo ytre vest
Bjørvika Indre Sentrum
Fornebu Bryn/Helsfyr
Økern/Løren/Risløkka
Signert leiekontrakt Avventer leietakere Prosjektert Ikke ferdig regulert
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000
Kvadraturen Ytre by vest
Andre områder Ytre by øst Billingstad Majorstua
Vika/Aker Brygge/Tjuvholmen Oslo Sentrum
Sandvika Oslo ytre syd
Lysaker Nydalen/Sandaker
Asker Skøyen
Oslo ytre øst Oslo ytre vest
Bjørvika Indre Sentrum
Fornebu Bryn/Helsfyr
Økern/Løren/Risløkka
Signert leiekontrakt Avventer leietakere Prosjektert Ikke ferdig regulert
Oslo outer westOslo outer east
50,000 100,000 150,000 200,000
22,000
21,000
20,000
19,000
18,000
17,000
16,000
15,000
14,000
250,000 300,000 350,000 400,000
Oslo outer south
City centre
Eastern city
Western cityOther areas
Inner city
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 13
SUNDTKVARTALET, OSLO CENTRUM
Malling & Co Næringsmegling was commissioned by Entra and Skanska CD Norway to lease 22,250 m2
of totally modernised commercial buildings.
Illustration: Placebo Effects
PAGE 14 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 15
LILLEAKERVEIEN 4, LYSAKER
Malling & Co Corporate Real Estate assisted an investor group in the sale of an office building of 9,300 m2 that was located near Lysaker Station. The purchaser is Mustad Property.
PAGE 16 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
SUPPLY IN THE RENTAL MARKETHIGH SUPPLY AND FULL PIPELINE PRESS PRICES
New construction makes up a significant percentage of supplyThe number of existing and potential new construction forms a significant part of the market, and there are many large projects for both new and renovated buildings. There is a substantial number of potential new construction, and a lot must be consumed before the available space is cleared. As of January 15, the supply rate in Greater Oslo available outside the 12-month window is 28 %, or 229,000, according to Finn.no. Most of these are new construction projects. There is also approximately 180,000 m2 that we know is offered to tenants in search processes, but that has not been advertised on FINN.no (mostly new construction). Økern has the most available space, both in relative and absolute terms. Overall, more space is available in Økern than in all the other office clusters in Greater Oslo together, and if everything that is planned in the area is built, the existing office mass in Økern will be doubled. The area is in a transformation phase and the infrastructure has received a boost with a new road system and improved metro options. Both new construction and total renovations will lift the area. Furthermore, Fornebu has many available plots, but this includes a higher proportion of existing buildings. Asker and Majorstua have the least space available. For Majorstua, this is because there is a limited number of plots to build on and because the existing buildings mostly have long-term contracts. In Asker we know there are more new construction projects on the way, so supply is expected to rise. Supply in the city centre districts areas has been relatively stable over the past four years, but showed a slightly upward trend throughout 2014. As of January 2015, the total supply in the city centre areas amounted to around 9 % . Although the city centre does not have many undeveloped plots, we know that there are many projects related to the renovation, extension and demolition of existing buildings that can provide additional space in the long term. There is, in other words, scope to accommodate higher demand even in the city centre before supply drops to such low levels that prices will be driven up sharply. There is plenty of supply in the
We define supply as everything that is available in the market, both existing buildings and new construction. The supply is increasing, possibly due to the low space absorption in the rental market last year. There are also some projects that are offered to tenants looking for properties in the market, but that are not available in the online marketplace, FINN.no. This means that the supply side still has a lot in stock if the market is ready to absorb it. Our list of potential new building projects is long, and it will affect the market many years to come. Vacated buildings that will be totally renovated form a significant part of the supply. The lack of options is not a limiting factor for the moment.
fringe space, and as of January 2015 upwards of 15 % of the total market, and we believe the market will stay like this for a good while to come. This will, in particular, have an impact on land prices in the area. Inertia in supply may create opportunitiesThere is a surprisingly stable amount of space available at any time in the market. However, it should be noted that competition is fierce, especially for large buildings, and many developers will most likely need to look around for several small tenants to fill up their buildings. Despite high supply levels, it is still possible for impatient tenants who do not have much time to experience a lack of availability in some areas. Given the current tax rules and market risk, there are few who dare build on speculation, which means that a sudden growth in demand could trigger price jumps in some areas. In areas such as CBD, for example, part of the market is also under major renovation. Here, and in some other areas, there may be a large number of potential tenants in the event of any upturn in the economy.
Number of m2 offered within 12 months Number of m2 offered beyond 12 months
OFFICE FOR RENT (M²) DIVIDED INTO OFFICE CLUSTERS PER JANUARY 15TH 2015
Source: Malling &
Co/Finn.no
Supply centre Supply fringe zone east Supply fringe zone east
SUPPLY IN CENTRAL OSLO, EASTERN AND WESTERN FRINGE ZONE
Source: Malling &
Co/Finn.no
0 20 000 40 000 60 000 80 000
100 000 120 000 140 000 160 000 180 000
Økern/Løre
n/Rislø
kka
Inner cit
y
Lysak
er
Forneb
u
Bryn/H
elsfyr
Skøye
n
Vika/A
ker B
rygge/T
juvholm
en
Kvadrat
uren
Bjørvik
a
Nydale
n/San
daker
Sandvik
a
Billingsta
d
Majorst
ua
Asker
0,00 %
2,00 %
4,00 %
6,00 %
8,00 %
10,00 %
12,00 %
14,00 %
16,00 %
18,00 %
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015*
Supply centre Supply fringe zone east
Supply fringe zone west
0,00 %
2,00 %
4,00 %
6,00 %
8,00 %
10,00 %
12,00 %
14,00 %
16,00 %
18,00 %
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015*
Supply centre Supply fringe zone east
Supply fringe zone west
0 20 000 40 000 60 000 80 000
100 000 120 000 140 000 160 000 180 000
Økern
/Lør
en/R
isløk
ka
Inner
city
Lysa
ker
Forn
ebu
Bryn/H
elsfyr
Skøye
n
Vika/A
ker B
rygge
/Tjuv
holm
en
Kvadr
atur
en
Bjørvik
a
Nydale
n/San
dake
r
Sandv
ika
Billing
stad
Majo
rstua
Asker
Below 1,000 m2 1,000–5,000 m2
5,000–10,000 m2 Larger than 10,000 m2
OFFICE FOR RENT (M²) IN OSLO DIVIDED INTO SIZE INTERVALS
Source: Malling &
Co
*Per January 15th 2015
*Per January 15th 2015
- 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000
1 000 000
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015*
Below 1 000 sqm. 1 000 -‐ 5 000 sqm.
5 000 -‐ 10 000 sqm. Larger than 10 000 sqm.
- 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000
1 000 000
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015*
Below 1 000 sqm. 1 000 -‐ 5 000 sqm.
5 000 -‐ 10 000 sqm. Larger than 10 000 sqm.
1,000,000900,000800,000700,000600,000500,000400,000300,000200,000100,000
-
180,000160,000140,000120,000100,00080,00060,00040,00020,000
0
18 .00 %
16 .00 %
14 .00 %
12 .00 %
10 .00 %
8 .00 %
6 .00 %
4 .00 %
2 .00 %
0 .00 %
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 17
6 %VACANCY RATEPER. JAN. 2015
6
4
2
7
9
108
12
3
13
11
1
CENTRAL OSLO
OSLO WEST
OSLO EAST
OSLO OUTER EAST
OSLO OUTER SOUTH
Oslo�orden
BÆRUM
ASKER
5
14
10 %VACANCY RATEPER. JAN. 2015
1 %SUPPLY RATE
PER. JAN. 2015
19 %SUPPLY RATE
PER. JAN. 2015
16 %SUPPLY RATE
PER. JAN. 2015
15 %SUPPLY RATE
PER. JAN. 2015
13 %SUPPLY RATE
PER. JAN. 2015
5 %SUPPLY RATE
PER. JAN. 2015
*Advertised office space at FINN.no of the total office building mass in Greater Oslo. This includes potensial advertised new projects.
*Advertised office space within 12 months at FINN.no of the total office building mass in Greater Oslo.
0–5 %
Indicates trend last 6 months.
5–10 % 10–15 % Over 15 %
SUPPLY* AND VACANCY**
12 %SUPPLY* IN DEFINED OFFICE CLUSTERS– Up approx. 0.5 percentage point last 12 months.
8 %VACANCY** IN DEFINED OFFICE CLUSTERS– Up approx. 1 percentage point last 12 months.
1 %VACANCY RATEPER. JAN. 2015
ASKER
1
19 %VACANCY RATEPER. JAN. 2015
BILLINGSTAD
2
SANDVIKA
3
13 %VACANCY RATEPER. JAN. 2015
LYSAKER
5
13 %VACANCY RATEPER. JAN. 2015
SKØYEN
6
5 %VACANCY RATEPER. JAN. 2015
MAJORSTUEN
7
19 %SUPPLY RATE
PER. JAN. 2015
FORNEBU
4
PAGE 18 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
6
4
2
7
9
108
12
3
13
11
1
CENTRAL OSLO
OSLO WEST
OSLO EAST
OSLO OUTER EAST
OSLO OUTER SOUTH
Oslo�orden
BÆRUM
ASKER
5
14
14 %SUPPLY RATE
PER. JAN. 2015
7 %SUPPLY RATE
PER. JAN. 2015
6 %SUPPLY RATE
PER. JAN. 2015
7 %SUPPLY RATE
PER. JAN. 2015
13 %SUPPLY RATE
PER. JAN. 2015
12 %VACANCY RATEPER. JAN. 2015
VIKA/AKER BRYGGE/TJUVHOLMEN
8
7 %VACANCY RATEPER. JAN. 2015
KVADRATUREN
9
6 %VACANCY RATEPER. JAN. 2015
INNER CITY
10
4 %VACANCY RATEPER. JAN. 2015
7 %VACANCY RATEPER. JAN. 2015
NYDALEN/SANDAKER
12
9 %VACANCY RATEPER. JAN. 2015
13 %VACANCY RATEPER. JAN. 2015
BRYN/HELSFYR
14
20 %SUPPLY RATE
PER. JAN. 2015
BJØRVIKA
11
29 %SUPPLY RATE
PER. JAN. 2015
ØKERN/LØREN/RISLØKKA
13
Source: Malling &
Co/Finn.noTHE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 19
FURTHER DEVELOPMENT OF THE RENTAL MARKETUNDERLYING POTENTIAL FOR GROWTH IN THE LONG TERM› The Norwegian economy has long maintained a higher rate of growth rate than our neighbouring countries. Unemployment rates are low and, in recent years, inflation has approached its target level of 2.5 %. Growth in employment is expected to be modest over the next few years, before a gradual improvement in the economy is expected in 2016. Moderate economic growth is expected in the next few years, largely because of lower investment in the oil sector. › Space absorption is strongly correlated with economic growth, and with low growth prospects for the Norwegian economy next year, it seems that the available space in the market will increase in the short term. › Several companies have decided to sublet their spaces. This applies particularly to tenants with activities related to oil/gas located in the west axis, who are transitioning from absorbing space to subletting space they do not use. This hampers growth in rental prices in the short term in this region. › The city centre areas are still most in demand among tenants. Only 18 % of all rental searches are solely interested in the fringe zones, but the peripheral zones are often chosen because of the price. › New construction activity was low in 2014, but almost four times as many square metres of office space will be completed in 2015. Only seven new construction projects have so far been registered for 2016 and 2017, but we know that there are many new construction projects in the pipeline. The main reason for reduced construction seems to be fewer major relocations last year. › With few players building on speculation, and several companies postponing their relocation processes, an attractive rental market may be created in the longer term if economic growth and demand increase.
TREND 1 YEAR TREND 1–3 YEAR
Short term trends (1 year)› Lower demand due to general economic trends and a decline in oil investments. › Lower than normal expiration in 2015 leads to less activity. › Some new construction will be completed in 2015 - some of which has been built partly on speculation. › We see some large sublet projects in buildings previously thought to be fully occupied.
Longer term trends (1 - 3 years)› Low construction rate and increased growth in 2016 may allow for rent increases in the future. › To date, few new construction projects are expected to be completed in 2016 and 2017. › Growth in the Norwegian economy and oil investments on the Norwegian sector of the Continental Shelf are expected to pick up in 2016. › An increase in the expiry of major contracts is expected until 2019 and 2020, which is expected to increase activity 2-4 years in advance.
SUPPLYSUPPLY
RENTS CENTRAL LOCATIONSRENTS CENTRAL LOCATIONS
RENTS FRINGERENTS FRINGE
PAGE 20 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
SAS TECHNICAL BASE, GARDERMOEN
Malling & Co Eiendomskapital advised Oslo Pensjonsforsikring aquiring SAS’s technical base at Gardermoen.
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 21
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,250 – 1,500 1,250 – 1,500
Prime rent (kr/m²)* 1,700 1,800
Supply** 19 % 20 %
Vacancy** 19 % 20 %
A SELECTION OF THE LATEST MAJOR LEASE CONTRACTS/RENEGOTIATIONS
Tenant Address Office cluster Moving from/renegotiation Space
Riksrevisjonen Storgata 14-18/Stenersgata 2-4 Indre sentrum Pilestredet 42 13,000 m²
Politiets Utlendingsenhet Økernveien 11 Økern/Løren/Risløkka Christian Krohgs gate 32 12,000 m²
Statens legemiddelverk Strømsveien 96 Bryn/Helsfyr Sven Oftedals vei 6 6,500 m²
Utdanningsetaten Strømsveien 102 Bryn/Helsfyr Renegotiation 6,500 m²
Bouvet Sørkedalsveien 8 Majorstuen Sandakerveien 24 C 5,000 m²
Helly Hansen Munkedamsveien 35 Vika/Aker Brygge/Tjuvholmen Renegotiation 3,400 m²
Roche Brynsengfaret 4-6 Bryn/Helsfyr Collocating 3,000 m²
Google Norway Kaibygning 1 Vika/Aker Brygge/Tjuvholmen Henrik Ibsens gate 100 2,500 m²
In order to map the state of the rental market, we track the activity on Norway’s dominant online market place FINN.no. Utilizing these numbers, we find that the total supply (as a percentage of the total volume) in our defined office clusters has varied between 11 % and 12 % over the last 12 months. The supply includes new builds and is not time-constrained. The largest construction projects in the Oslo area are Østre Aker vei 90 (75,000 m²), Østre Aker vei 60 (40,000 m²) and Fornebu Technoport (36,000 m²). If we limit our analysis to the vacancy rate, that is the office locations available within 12 months, we have experienced a slight increase by 1 percentage points over the past 12 months. The largest vacant office locations are Nydalsveien 28 (22,500 m²), Lørenfaret 3 (15,500 m²) and Snarøyveien 30 (15,000 m²). The office supply – in absolute terms – is greatest at Økern, the inner centre and Lysaker. In relative terms, the office supply is greatest at Økern, Sandvika and Billingstad.
THE RENTAL MARKETGREATER OSLO
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,600 – 1,800 1,300 – 1,600
Prime rent (kr/m²)* 2,100 2,000
Supply** 1 % 4 %
Vacancy** 1 % 3 %
ASKER
The top rent and the normal rent is somewhat increased over the last 12 months, while the supply rate and the vacancy rate have declined somewhat over the period . However, an increase in the supply and vacancy is expected . Aibel is subletting up to 7,500 m², which may double Asker’s current supply rate . The office supply rate is currently the lowest in our defined clusters, and although the outlook might be somewhat worsened, we still believe the development in Asker will be solid in the time ahead .
The cluster is characterized by big box retail and smaller logistics properties . There is a tendency to a conversion from combination properties to retail and residential projects . Several large big box retailers, such as IKEA, Elkjøp Mega Store and Megaflis have already established themselves in the area . Concerning the rent level, we believe that it will remain fairly unchanged in the time ahead . The Volkswagen car dealer Møller is relocating to Billingstadsletta 14 .
BILLINGSTAD
*See definition of «normal» rent and prime rent on page 26.**See definition of supply and vacancy on page 18.
PAGE 22 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,600 – 1,800 1,300 – 1,650
Prime rent (kr/m²)* 2,250 2,100
Supply** 16 % 13 %
Vacancy** 6 % 4 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,600 – 1,800 1,600 – 1,800
Prime rent (kr/m²)* 2,350 2,350
Supply** 15 % 12 %
Vacancy** 13 % 11 %
SANDVIKA
LYSAKER
In the wake of the worsened outlook in the oil sector, questions about the healthiness of Lysaker’s office market are raised . Although a high proportion of the tenants in the clusters have some connection to the oil industry, we believe that the rent level will develop mod-erately . As is the case for Fornebu, about 20 lease contracts were signed in the cluster last year . The most considerable contract that was signed, is Cisco’s renegotiation (of 8,500 m²) in Phillip Pedersens vei .
As is the case for the other clusters in the west axis, the rents in Sandvika have increased somewhat, even though the supply in this cluster is close to doubled over the last 12 months . The new build project “Sandvika Business Centre” in Elias Smiths vei 14-26 has over its two years in the market not caught the desired interest from potential tenants .
Few lease contracts were signed in Skøyen last year . There is still 14,000 m² vacant in the new build in Verkstedveien 1 (26,000 m²) . Statens Pensjonskasse will rent 9,200 m² in the mentioned building from the summer of 2015 . Meanwhile, CGG is subletting 9,300 m²2 in Hoffsveien 1C following their relocation to Lilleakerveien 6A at Lysaker .
We anticipate that the rent level in this cluster will remain unchanged in the time ahead . Our agents believe that the main factor behind increased rents has been the increased standard of the buildings – not their geographical location . According to Arealstatistikk – an agency that collects and analyzes information about the office lease market in greater Oslo – more than 20 lease contracts were signed in 2014 . The largest of these is the contract signed by Eureka Pumps (3,000 m²) in Fornebuporten . This new build is projected to be finalized in the summer of 2015 .
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,500 – 1,700 1,400 – 1,600
Prime rent (kr/m²)* 2,150 2,100
Supply** 19 % 13 %
Vacancy** 10 % 1 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 2,100 – 2,400 2,100 – 2,400
Prime rent (kr/m²)* 3,300 3,000
Supply** 13 % 14 %
Vacancy** 13 % 14 %
FORNEBU
SKØYEN
*See definition of «normal» rent and prime rent on page 26.**See definition of supply and vacancy on page 18.
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 23
Per January 2015 Per January 2014
Normal rent (kr/m²)* 2,000 – 2,400 2,000 – 2,400
Prime rent (kr/m²)* 3,500 3,200
Supply** 6 % 7 %
Vacancy** 6 % 5 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,800 – 2,000 1,700 – 1,900
Prime rent (kr/m²)* 2,800 2,500
Supply** 5 % 2 %
Vacancy** 5 % 2 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,800 – 2,300 1,700 – 2,200
Prime rent (kr/m²)* 2,800 2,750
Supply** 7 % 11 %
Vacancy** 7 % 11 %
MAJORSTUEN
KVADRATUREN
Per January 2015 Per January 2014
Normal rent (kr/m²)* 2,800 – 3,200 2,600 – 3,200
Prime rent (kr/m²)* 4,800 4,500
Supply** 14 % 10 %
Vacancy** 12 % 10 %
VIKA/AKER BRYGGE/TJUVHOLMEN
CENTRAL OSLO
*See definition of «normal» rent and prime rent on page 26.**See definition of supply and vacancy on page 18.
Centric’s signing of 1,800 m² in Kongens gate 6 is among the cluster’s largest signed contracts in the last six months . A specific characteristic of the cluster is that the office standards vary quite much, something that is reflected in the rents . Several rehabilitation projects are carried through, which will lift the attractiveness of the cluster . Furthermore, a new infrastructure system under construction will strengthen the cluster’s ties with the other parts of the city center .
The most notable lease contract that is signed in the cluster over the last 18 months, is the 9,600 m² signed by the National Police Directorate in Fridtjof Nansens vei 16 . This new build is projected finalized by the end of 2015 . Of the 26,500 m² the developer Stor-Oslo has projected in Sørkedalsveien 8, Bouvet will rent 5,400 m² . The existing building is to be renovated and expanded when Statoil Fuel and Retail relocates to Schweigaards gate 16 in the summer of 2015 .
The National Audit Office’s has signed a 10 year long lease contract in Storgata 14-18 and Stenersgata 2-4 . Storgata 14-18 is a new build . Furthermore, the top level of the towering Posthuset is vacant following Entra’s decision to relocate a few stories down in the same building .
Helly Hansen’s renegotiation in Munkedamsveien 35 (3,400 m²) is one of the most notable signed lease contract in Oslo’s CBD over the last six months . In the wake of the ending of the rehabilitation of 100,000 m² of retail and office space, Aker Brygge will experience a massive lift . Google Norway is moving from Indekshuset at Solli Plass, and has signed a contract in Kaibygningen 1 (2,500 m²) .
PAGE 24 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,550 – 1,750 1,550 – 1,750
Prime rent (kr/m²)* 2,200 1,950
Supply** 13 % 10 %
Vacancy** 13 % 10 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 2,700 – 3,000 2,700 – 3,000
Prime rent (kr/m²)* 3,500 3,500
Supply** 20 % 9 %
Vacancy** 4 % 3 %
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,000 – 1,500 1,400 – 1,600
Prime rent (kr/m²)* 2,200 1,900
Supply** 29 % 30 %
Vacancy** 9 % 8 %
BJØRVIKA
ØKERN/LØREN/RISLØKKA
Per January 2015 Per January 2014
Normal rent (kr/m²)* 1,500 – 1,700 1,500 – 1,700
Prime rent (kr/m²)* 2,200 2,200
Supply** 7 % 5 %
Vacancy** 7 % 5 %
NYDALEN/SANDAKER
BRYN/HELSFYR
*See definition of «normal» rent and prime rent on page 26.**See definition of supply and vacancy on page 18.
The area has undergone a massive transformation in recent time, but the lease market has been characterized by few signed contracts the last 12 months . The great variation in office rents indicates that the building standards vary substantially . Concerning the supply, Økern is the area with the largest supply rate – both in terms of absolute and relative sizes . Three buildings in Hasle Linje will be finalized by 2016 . In Portalbygget (15,800 m²) – which is finalized in Q3 2015 – more than 6,000 m² is still vacant .
The city cluster, which along with Økern has undergone the most rapid transformation in recent time, continues to expand . In Bjørvika, Diagonale (15,000 m²) and Eufemia (19,500 m²) form the supply of office locations available outside the 12-month window . Ernst & Young has renegotiated its contract in Dronning Eufemias Gate 6, a process that ended up with the tenant expanding its space . In the same building, Avinor has decided to remain put, while Tine have moved from the mentioned building to Nordbygata .
In contrast to what the Økern area has experienced, several contracts have been signed in this cluster . Utdanningsforbundet, which rent 6,500 m² in Strømsveien 102, and Safetel, which rent 1,800 m² in Østensjøveien 18, have both renegotiated their contracts this autumn . Concerning the development of the area, about 170,000 m² is zoned for office, residential, educational and sports use in the Valle Hovin area .
Of the area’s total supply of office space, Avantor’s properties account for more than 50 % of it . The largest of these is the rehabilitation project in Nydalsveien 28 (22,500 m²) . The rental level and the supply of office floor have been relatively constant in the past 12 months, and the development ahead is expected to be fairly unchanged .
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 25
OSLO SENTRUM
YTRE BY VEST
YTRE BY ØST
OSLO YTRE ØST
OSLO YTRE SYD
OSLO YTRE VEST
Oslo�orden
BÆRUM
ASKER
10
6
4
2
14
7
9
8
12
3
13
11
1
5
OFFICE RENTS: MALLING & CO ESTATE AGENT CONSENSUS (NOK/M²/YEAR)
# OFFICE CLUSTER «NORMAL» RENT* PRIME RENT** FUTURE OUTLOOK PRIME RENT LAST 12 MONTHS
1 ASKER 1,600 – 1,800 2,100 5 %
2 BILLINGSTAD 1,250 – 1,500 1,700 -6 %
3 SANDVIKA 1,600 – 1,800 2,250 7 %
4 FORNEBU 1,500 – 1,700 2,150 2 %
5 LYSAKER 1,600 – 1,800 2,350 0 %
6 SKØYEN 2,100 – 2,400 3,300 10 %
7 MAJORSTUEN 1,800 – 2,000 2,800 12 %
8 VIKA/AKER BRYGGE/TJUVHOLMEN (CBD) 2,800 – 3,200 4,800 7 %
9 KVADRATUREN 1,800 – 2,300 2,800 2 %
10 CENTRAL OSLO 2,000 – 2,400 3,500 9 %
11 BJØRVIKA 2,700 – 3,000 3,500 0 %
12 NYDALEN/SANDAKER 1,500 – 1,700 2,200 0 %
13 ØKERN/LØREN/RISLØKKA 1,000 – 1,500 2,200 16 %
14 BRYN/HELSFYR 1,550 – 1,750 2,200 13 %
* Normal rents reflect the interval where most contracts are signed in the specified market area . ** Prime rents are consistently achievable headline rental figure that relates to a new, well located, high specification unit of a standad size commensurate demand within the predefined market area . The prime rent reflects the tone of the market at the top end, even if no new leases have been signed within the reporting period . One-off deals that do not represent the market are discarded .
1 kmBubble size represents total office stock in each cluster .
500,000 m2
PAGE 26 MARKET REPORT WINTER 2015 / THE RENTAL MARKET
KARL JOHANS GATE 13, OSLO CENTRUM
Malling & Co Corporate Real Estate assists Aberdeen in the sale of a centrally located retail property at Karl Johans gate 13.
THE RENTAL MARKET / MARKET REPORT WINTER 2015 PAGE 27
STAVANGERMODERATE DEMAND KEEPS RENT PRICES DOWN
Latest news from the Stavanger region› Aibel is looking for a new head office in Stavanger and wants up to 17,000 m2, with occupancy in late 2016. This petroleum services company currently occupies a building of 25,000 m2 at Forus. › In 2014, Telenor and BP were looking for office space. They received over 40 offers each, which reflects the high supply in region. Telenor signed a 5-year lease for 2,550 m2 with Norwegian Property at Badehusgaten 37. › Oil and oil service companies have cut a total of 1,000 jobs nationwide so far in 2014, with a significant proportion of the cuts affecting the Stavanger region. Several companies are subletting part of their premises, thereby helping to maintain the high supply levels. › Niam has recently signed an agreement to purchase shares in Hinna Park Invest AS, which owns Jåttåvågveien 10-12 in Hinna. This building, which was built in 2012, houses Aker Solutions and Akastor. The property is worth approximately NOK 1.5 billion. › W.P. Carey has purchased Apply Atrium at Moseidsletta 122 at Forus, where both Apply and Technip are tenants. In 2014, they bought Total’s headquarters in Dusavika. These, along with Niam’s purchase of the Aker building, are the three largest transactions in the region so far in 2014. › In 2014, we registered a transaction volume of NOK 5.3 billion in the Stavanger region, spread across 18 transactions. This only applies to transactions over NOK 50 million. We have seen prime yield down to 6.00 %, while normal yield is between 6.50 % and 7.50 %. › Construction activity in the Stavanger region’s hotel sector is high. In 2014 alone, the number of rooms increased by 18 %, from approximately 3,500 to over 4,100. An increase of a total 1,100 rooms is expected in 2015 and 2016. The region enjoys high occupancy, somewhat higher than in Oslo. According to statistics from Horwath Hotel Consulting, the Stavanger region charged the highest room rates in the country in the first half of 2014.
The commercial property market in Stavanger differs from the market in Oslo. It is primarily driven by the oil and gas sector, and several areas consist of a large proportion of combination property, warehouses and workshops/production facilities. The expected decline in petroleum investment in 2015 and the oil companies’ focus on reducing costs have had an impact on the property market. The large volume of projects that are ready for construction in addition to the supply on FINN.no and moderate demand are helping to keep rents down. Increased focus on costs in the oil sector and the fall in oil investment, as well as tenants who sublet parts of their premises, will continue to keep supply levels high. This will prevent future rent inflation.
OFFICE RENTS IN THE STAVANGER REGION DIVIDED INTO AREAS AND SECTORS (NOK/M²/YEAR)
Stavan
ger c
ity offi
ce
Hinna P
ark offi
ce
Forus
office
Stavan
ger fr
inge z
one o
ffice
Sandn
es offi
ce
Combin
ed
Worksh
op/Prod
uctio
n
Wareho
use
0200400600800
1,0001,2001,4001,6001,8002,0002,2002,4002,6002,800
“Normal” rent Prime *See definition of prime and «normal» rent at page 26 .
Source: Malling &
CoPAGE 28 MARKET REPORT WINTER 2015 / STAVANGER
STAVANGER FRINGE ZONE
DUSAVIKA
SANDNES
HINNA
E39
509
E39
44
13
SOLA
0–5 % 5–10 % 10–20 % › 20 %
FORUS
*See definition of supply and vacancy on page 18. (This is only the advertised supply at FINN.no)Source: Malling & Co
OFFICE WAREHOUSE/COMBINED
Supply*
Vacancy*
0.5 %
6.5 %
6.5 %
1.5 %
1.5 %
3 %
3.5 %
10.5 %
STAVANGER CITY
RISAVIKA
7 %
19 %
14 %
5.5 %
10.5 %
STAVANGER / MARKET REPORT WINTER 2015 PAGE 29
DRAMMENCHALLENGING ASKER IN THE OFFICE MARKETIn 2014, activity in the region’s transaction market was rising, while the trends in the office rental market were more moderate. Drammen has had difficulty increase the region’s competitiveness attracting businesses from the west axis (Asker), but it seems that the increasing supply of high standard new construction projects can make the region competitive, thereby breaking the trend of internal relocation as the activity driver. Bjørnstjerne Bjørsons gate 110 (8,300 m²) is one of the upcoming office and combination buildings that will increase supply. Moreover, the retail sector in Drammen has picked up. In particular, Bangeløkka and its extensive shopping mall have received a boost. In the same area, the old Maxi centre will change its name to Strømsø Centre when it reopens in spring 2015, which will really cement Bangeløkka as a shopping area. We have also experienced good activity in the market for combination buildings, and Åssiden, Kobbervikdalen and Lierstranda are experiencing the greatest interest. Further activity is also expected in the transaction market in the future. In 2015, Malling & Co will be selling a large number of Mesta highway stations, as Mesta Eiendom is now downsizing its portfolio extensively.
Latest news from the Drammen region› Edgar Haugen Jr. has sold Baches vei 1. The sales price is NOK 160.5 million. › Ticon Property is erecting a new construction consisting of 8,300 m2 at Bangeløkka. › Expert, Falk Møbler & Fresh Fitness have moved into C.O. Lunds gate 25 at Bangeløkka. › A very modern office building covering 5,500 m2 has been designed for Vinjes gate 1. › Deloitte is looking for 1,000-1,200 m2 its a decision to leave Dronninggata 15. › In the autumn of 2015 Husbanken will move from Grønland 1 to Entra’s buildings at Union Brygge. Malling & Co has been awarded the contract for enting out a total of 4,100 m2 at Grønland 1. › Energiselskapet Buskerud (EB) will move in 2015 into the new Union Eiendomsutvikling building. The entire building covers a total of 10,600 m2, of which EB will rent 3,400 m2.
OFFICE RENTS IN THE DRAMMEN REGION – WAREHOUSE AND OFFICE (NOK/M²/YEAR)
«Normal» rent – Warehouse «Normal» rent – Office Prime - Warehouse Prime – Office
Drammen
city
Nedre
Eiker
Kobbe
rvikd
alen
Lier
Åsside
n/Guls
koge
n
Øvre Eike
r
Source: Malling &
Co
1,600
1,800
2,000
2,200
2,400
1,400
1,200
1,000
800
600
400
*See definition of prime and «normal» rent at page 26 .
PAGE 30 MARKET REPORT WINTER 2015 / DRAMMEN
E18
23
35
E134
LIER
KOBBERVIKDALEN
ÅSSIDEN/GULSKOGEN
NEDRE EIKER
ØVRE EIKER
*See definition of supply and vacancy on page 18. (This is only the advertised supply at FINN.no)Source: Malling & Co
0–5 % 5–10 % 10–15 %
DRAMMEN CITY
OFFICE WAREHOUSE/COMBINED
Supply*
Vacancy*
DRAMMEN / MARKET REPORT WINTER 2015 PAGE 31
International fashion houses continue their establishment in OsloMany years would pass from when Mulberry and Høyer Luxury opened their doors in 1991 until the next shop within the luxury segment would take a chance on Norway. In 2006, Louis Vuitton established itself in Akersgata, right next door to Mulberry. In 2013, Louis Vuitton recorded sales of nearly NOK 75 million – corresponding to a turnover of more than NOK 200,000/m2. The high-end store increased its sales by over 30 % between 2011 and 2013. Oslo’s Mulberry store currently has the highest turnover per square meter of all Mulberry stores in the world. More international fashion houses have become aware of Norway’s opportunities in recent years. This autumn, newly established luxury boutiques such as Gucci, Bottega Veneta and Marc by Marc Jacobs were joined by Burberry (250 m2) and Michael Kors (200 m2). Less familiar inter-national brands like The Kooples, Sandro, Maje and Zadig & Voltaire also opened their first stores in Norway at Eger. International fashion houses are very conscious of location and in particular the other shops that are in the vicinity. With a growing number of high-end fashion houses in Oslo’s shopping streets, it will become more attractive for new international brands to establish themselves here. Renovation of shopping areas boosts OsloBoth Paléet and Aker Brygge have opened their renovated spaces this autumn. Steen & Strøm Magasin also revamped its premises and created a special “food court” in the basement, a new phenomenon that Paléet has also invested in. This autumn, Bogstadveien had its official reopening af-ter the roadworks that had been ongoing for over two years were finally finished. After 17 months of construction, Østbanehallen reopened in late January 2015, featuring both eateries and boutiques. In Vika, Storebrand has begun to renew Vika Terrassen with a new street layout, facades and renovated retail premises. The street will be upgraded in two phases and completion is scheduled for 2016. 39,000 m2 of new shopping centre space in 2014Two new shopping centres were opened in the Oslo area in 2014, the first construction phase of the Bekkestua center (12,000 m2) and Fornebu S (24,500 m2). In addition, Paléet has reopened after a lengthy period of renovation and expansion (1,000 m2). Eger has also extended its retail space in 2015 with an additional 1,500 m2. Turnover increased by 3 % in 2014 for the 60 largest shopping centres in the country compared to 2013. The relatively weak growth is largely due to a weak first half of 2014, were the growth was 2.3 %. After the latest sales figures, the trade organisation Virke expect the total revenue growth for 2014 to be 4%. Online shopping continues to take market sharesConsumers’ shopping habits have changed in line with technology in recent years. According to Statistics Norway, turnover from online shopping
increased by 42 % between 2008 and 2013, while regular high street trade increased by only 15 %. The trade organisation Virke states that 1 out of 3 online purchases are from the websites of foreign online stores. Never- theless, Norwegian online stores account for almost 75 % of turnover. Small purchases in particularthat is under the customs limit of NOK 200 (excl. shipping costs), are purchased from foreign online stores. From 2015, customs limit increased to NOK 350 (including shipping costs). “Showrooming” and “Webrooming”Two new phenomena that have arrived with online shopping are “show-rooming” and “webrooming”. “Showrooming” means that a customer visits a store to try the item, but buys the product online. “Webrooming” is the customer that is that the customer finds a product online, which he then buys in the store. According to Virke’s e-Commerce Barometer, seven out of ten customers under the age of 35 “showroom”, while one out of every two customers aged 35-49 have showroomed. The increase in numbers of online stores, fast delivery and often lower prices give e-commerce a big competitive advantage at the expense of high street stores.
During the autumn, both Aker Brygge and Paléet reopened their retail space after prolonged renovations. Bogstadsveien is officially opened after the roadworks, and the world’s most environmentally friendly shopping centre has opened at Fornebu. In addition, international fashion houses have finally discovered Norwegians’ strong purchasing power, and have greatly contributed to turning Oslo’s main street, Karl Johans gate, into Norway’s most expensive street for retail premises.
RETAILIMPROVEMENT OF HIGH STREET RETAIL IN OSLO
PURCHASING POWER PARITY INDEX* 2013 (EU 28 = 100)
Source: Eurostat
*Purchasing power is the number of goods or services that can be purchased with a unit of currency .
RETAIL SALES INDEX EXCEPT CARSALES, SESONALLY ADJUSTED (2005=100)
Source: Statistics Norw
ay
*Per November 2015 .
80
90
100
110
120
130
140
2000 2001
2002
2003
2004
2005
2006 2007
2008
2009
2010
2011 2012
2013
2014*
0
50
100
150
200
250
300
Luxe
mbo
urg
Nor
way
Switz
erla
nd
USA
Aus
tria
Net
herla
nd
Swed
en
Irela
nd
Den
mar
k
Ger
man
y
Bel
gium
Icel
and
Finl
and
Fran
ce
Uni
ted
Kin
gdom
Japa
n
EU 2
8
Italy
Spai
n
Gre
ece
Por
tuga
l
Pol
and
PAGE 32 MARKET REPORT WINTER 2015 / RETAIL
The Norwegian Parliament
KIRKEGATA
KONGENS GATE
NEDRE SLOTTSGATEK
AR
L JO
HA
NS
GAT
E
KARL
JO
HA
NS
GATE
PR
INSE
NS
GAT
E
GREN
SEN
ØVRE SLOTTSGATE
AKERSGATA
Steen & Strøm
GlasMagasinet
Stortorvet
V
RETAILIMPROVEMENT OF HIGH STREET RETAIL IN OSLO
18,000 – 25,000 NOK/m2/year
RETAIL RENT IN KARL JOHANS GATE AND SURROUNDING STREETS
10,000 – 18,000 NOK/m2/year
6,000 – 12,000 NOK/m2/year
4,000 – 8,000 NOK/m2/year
3,000 – 6,000 NOK/m2/year
2,500 – 5,000 NOK/m2/year
ESTABLISHMENT OF HIGH-END INTERNATIONAL BRANDS IN KARL JOHANS GATE AND SURROUNDING STREETS
# BRAND ADDRESS OPENED
1 Mulberry Akersgata 18 1991
2 Louis Vuitton Akersgata 20 2006
3 Hermés Nedre Slottsgate 8 2008
4 Acne Øvre Slottsgate 11 2010
5 Filippa K Øvre Slottsgate 11 2010
6 Gucci Nedre Slottsgate 8 2013
7 Marc by Marc Jacobs Øvre Slottsgate 20 2013
8 Bottega Veneta Nedre Slottsgate 9 2013
9 Burberry Nedre Slottsgate 9 2014
10 The Kooples Øvre Slottsgate 18-20 2014
11 Michael Kors Eger, Karl Johans gate 23 B 2014
12 Sandro Eger, Karl Johans gate 23 B 2014
12 Maje Eger, Karl Johans gate 23 B 2014
12 Zadig & Voltaire Eger, Karl Johans gate 23 B 2014
13 Filippa K Man Øvre Slottsgate 8 2014
14 Aesop Prinsens gate 21 2014
1
2
36
7
89
10
11
1213
14
45
Source: Malling &
CoRETAIL / MARKET REPORT WINTER 2015 PAGE 33
HOTELGROWING HOTEL MARKET IN OSLOAfter several years of strong growth in supply, the number of hotel rooms is expected to remain flat in the time ahead. Capacity utilisation has been greatly reduced as a result of the increased supply, and it is expected that this will increase somewhat in the future.
Since its peak in 2007, capacity utilisation in Oslo hotels has fallen by a little less than 10 percentage points. During the same period, the supply of hotel rooms in Oslo increased by around 30 %, and fewer planned hotels indicates that the market is about to be filled. It is interesting to note that prices have remained relatively steady, which has resulted in a relatively moderate decline in RevPAR (revenue per available room). It is also clear that foreign guests are the reason for the large seasonal variations in the hotel market. Norwegians’ hotel stays are, however, more stable. This is due to the large proportion of business travellers from other parts of the country. This segment of the market has seen the emergence of the budget hotels, such as Stordalen’s Comfort Xpress which has had significantly higher occupancy rates than the rest of the market. After a period of sharp increase in supply, it appears that growth in the number of hotel rooms will slow down in the future. The only project which is expected to be completed in Oslo in 2015 is the Comfort Hotel at Karl Johans gate 12, where 180 rooms will open in May. It looks as though growth will be somewhat greater in 2016, although there is some uncertainty about the specific projects. Our sources tell us that five out of eight construction projects in the Oslo market are developments. Oslo Plaza, with its plans to expand by 335 rooms, is the biggest project, but it is uncertain whether this development will be take place.
Source: Statistics Norw
ay/Statistikknett.no
TOTAL NUMBER OF LODGING PER MONTH IN OSLO HOTELSNUMBER OF AVAILABLE ROOMS AND VISITORS IN OSLO
Source: Statistics Norw
ay
Source: Statistics Norw
ay/Malling &
Co
Foreign guests Norwegian guests Norwegian guests Number of rooms Capasity utilization (in number of rooms)
LODGING DIVIDED INTO REGION/COUNTRY, OSLO
Norway
Europe (without the Nordic countries)
The Nordic countries (without Norway)
Asia
USA
Other
23 %
8 %
60 %
4 %3 % 2 %
DEVELOPMENT IN REVPAR AND CAPACITY UTILIZATION FOR HOTELS IN OSLO
Source: Statistics Norw
ay
Room price (L .axis) RevPAR (R .axis) Capasity utilization (R .axis)
60 %
62 %
64 %
66 %
68 %
70 %
72 %
74 %
76 %
78 %
0
200
400
600
800
1 000
1 200
2006 2007 2008 2009 2010 2011 2012 2013 2014
Pris per rom (v. akse) RevPAR (v. akse) Belegg (h. akse)
6 000
7 000
8 000
9 000
10 000
11 000
12 000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Antall rom Belegg (i antall rom)
Jan .
201
0
May
201
0
Sept
. 201
0
Jan .
201
1
May
201
1
Sept
. 201
1
Jan .
201
2
May
201
2
Sept
. 201
2
Jan .
201
3
May
201
3
Sept
. 201
3
Jan .
201
4
May
201
4
Sept
. 201
4
0
50 000
100 000
150 000
200 000
250 000
300 000
Mon
th1-‐14
Mon
th5-‐14
Mon
th9-‐14
Mon
th1-‐15
Mon
th5-‐15
Mon
th9-‐15
Mon
th1-‐16
Mon
th5-‐16
Mon
th9-‐16
Mon
th1-‐17
Mon
th5-‐17
Mon
th9-‐17
Mon
th1-‐18
Mon
th5-‐18
Mon
th9-‐18
Foreign guests Norwegian guests
1,200
1,000
800
600
400
200
0
12,000
11,000
10,000
9,000
8,000
7,000
6,000
300,000
250,000
200,000
150,000
100,000
50,000
0
PAGE 34 MARKET REPORT WINTER 2015 / HOTEL
ØSTRE AKER VEI 60, ØKERN
Hovedstaden Utvikling AS commissioned Malling & Co Næringsmegling to lease 40,000 m2 of office space in a new construction at Økern.
Illustration: a-lab
Europe (without the Nordic countries)
HOTEL / MARKET REPORT WINTER 2015 PAGE 35
REGION PROPERTY BUYER SELLER PRICE (MNOK)
Gardermoen Coop HQ MøllerGruppen Eiendom and Stokke Industri III Coop 1,300
Nittedal Arcus-building Edgar Haugen and Canica Pareto PF 1,200
Gardermoen Teknisk Base SAS Oslo Pensjonsforsikring SAS 650
Berger Onninen Confidential n .a . > 400
Vestby Toveien 28 NRP Finans Storebrand Eiendomsfond 275
LOGISTICSTHE GREATER OSLO LOGISTICS MARKETLogistics are on the way up After a weak 2012, logistics properties have re-assumed their position as attractive investment objects. In 2014, the investment volume in logistics almost doubled from 2013, largely driven by some large-volume deals at the end of the year. The interest for logistics property is high, something that is illustrated by the sale of COOP’s main distribution centre at Gardermoen at a net yield close to 5.5 %. This reflects trends elsewhere in Europe, where investments in this segment increased by 50 % between 2012 and 2013, and the development continued last year. Relatively high direct yield from these properties is an important factor in this trend.
Of the roughly NOK 5.1 billion that was invested in the Norwegian logistics market in 2014, close to 90 %, according to the figures we have, has been invested in the Greater Oslo area – nearly twice as large a share as Oslo otherwise has in the transaction market. Much of the explanation is eastern Norway’s role as the distribution hub for the rest of the country, in which the port of Oslo and the E6 highway play a significant role. We know of several ongoing transactions in this area.
In contrast to an office building, which is a relatively homogeneous product, there are substantial differences between logistics buildings. For example, a bulk storage facility and an automated picking warehouse require vastly different investment in the building itself. For that reason, it is often misleading to refer to a square metre price, although this price does provide an indication of the state of the rental market. Prime locations in Oslo are in Groruddalen and Lørenskog, where the rent is around NOK 1,000 NOK/m2 for a new building without major specifications. If you move out of Oslo, rents fall due to lower land prices. Berger and Gardermoen are both attractive clusters, with rent prices of NOK 800 and 6-700/m2, respectively, for new construction without specifications.
Future trendsAs elsewhere in the transaction market, the foundation for an active transaction market in the logistics segment is present. The trend toward increased e-commerce and the increasing presence of modular trailer vehicles will change lessees’ building requirements, something that investors can take advantage of if they position themselves early enough in the market.
Source: Malling &
Co
Regnbuen/Berghagan
Kløfta/Ullensaker
Gardermoen
Gjelleråsen/Skytta
Groruddalen/Alnabru
Rud
Billingstad
Lier Kolbotn/Mastemyr
Lørenskog
Berger/Hvam
Vestby
OSLO
DRAMMEN
E6
E6
E6
E18E18
STOCKHOLMGOTHENBURG
GARDERMOEN
Vinterbro
E18
LOGISTICS CLUSTERS IN GREATER OSLO
PAGE 36 MARKET REPORT WINTER 2015 / LOGISTICS
HØGSLUNDVEIEN 49, BERGER
Onninen HQ - Logistics Property in the northern corridor outside Oslo. Malling & Co acted as consultant for the transaction.
LOGISTICS / MARKET REPORT WINTER 2015 PAGE 37
Source: Cushman &
Wakefield/M
alling & Co
NET PRIME YIELD IN SELECTED EUROPEAN CITIES
CITY PRIME YIELD (OFFICE)
London 3 .50 %
Zürich 3 .80 %
Paris 4 .00 %
München 4 .00 %
Berlin 4 .50 %
Stockholm 4 .50 %
Oslo 4.75 %
Copenhagen 5 .00 %
Rome 5 .00 %
Helsinki 5 .25 %
Glasgow 5 .75 %
THE TRANSACTION MARKETHIGHEST ACTIVITY SINCE 2006
Activity in the marketAs usual, the office segment is strongest represented. In 2014, investments in this segment represented about 40 % of the total investment volume. As expected, investment in residential projects increased in line with the recovery in the housing market. Furthermore, we have observed increasing investment volumes in logistics, where its share approximately doubled from 5 % in 2013 to 9 % in 2014. This trend is in line with what we see internationally, where logistics, as an investment, is being increasingly used to increase the return from a well-diversified portfolio. These figures for Norway, however, should be taken with a pinch of salt, as a few large transactions change the segment shares significantly.
We are also seeing that Oslo, Asker and Bærum have the highest activity nationwide – 56 % of the transaction volume in our records involves property in this region. A broad range of investors are present in today’s market. In 2014, real estate funds were present on the sellers’ side. The Fortin fund was sold to Starwood, while FBC made a bid for 30 % of the shares in Storebrand Eiendomsfond last autumn. The latter fund is expected to be sold soon, while a fund set up by Union is in its start-up phase. After a decline in the share of syndicate-financed properties in 2013, we are now experiencing that private capital is once again flowing into the market. In 2014, syndicates represented around 15 % of the buyers’ side volume.
Foreign investors consolidate their positionHaving doubled their share of transaction volumes between 2011 and 2013, foreign investors have further consolidated their position as purchasers in the market and now account for about 25 % of the total purchase volume. Despite this increase, Norway has a low proportion of international investors compared to other European countries. Therefore, we believe that foreigners will continue to increase their stake, and that the trend will be reinforced by low yields abroad, favourable financing costs and relatively strong economic conditions.
In 2014 we registered 195 transactions, with a total value of approximately NOK 57 billion. After a couple of years of tightening of credit by the banks – and subsequent growth in bond financing – we now see that the banks are seriously back in the game. The falling interest rates and reduced margins, coupled with a relatively solid economic trend, have paved the way for an increasing international presence in the transaction market. Our data shows that foreign investors accounted for more than 25 % of the total purchase volume in 2014, thereby manifesting themselves in the Norwegian market.
Source: Malling &
Co
TRANSACTION VOLUME PER REGION
Oslo
Stavanger
Asker and Bærum
Bergen
Trondheim
Other
12 %
4 %
47 %
6 %
9 %
22 %
Source: Malling &
Co
TRANSACTION VOLUME* DIVIDED INTO BUYER/SELLER TYPE
Investment syndicates Property funds Life insurance companies Property companies Other
Source: Malling &
Co
TRANSACTION VOLUME PER SEGMENT
Office
Warehouse/logistics
Residential/land
Retail
Other
Mixed use
Hotel
Industrial
5 %
9 %
5 %
6 %
9 %
13 %
40 %
13 %
*Does not include the stock echange listing of Entra
-25
-20
-15
-10
-5
0
5
10
15
20
25
2012 2013 2014
BIL
LIO
N N
OK
PAGE 38 MARKET REPORT WINTER 2015 / THE TRANSACTION MARKET
TRANSACTION EXAMPLES IN 2014
ADDRESS/PROPERTY NAME TENANT(S) SELLER BUYER ESTIMATED PRICE (MNOK)
DNB NOR Eiendomsinvest 1 ASA Several Fortin Starwood Capital Group 4 .600
Martin Linges vei 33 Statoil Koksa Eiendom Madison 1 .900
Schweigaards gate 21-23 NSB and Gjensidige Rom Eiendom KLP 1 .750
Aker building Aker Solutions and Akastor Hinna Park AS Niam 1 .500
Steen & Strøm Magasin (50 %) Several Schage Eiendom Promenaden Property 750
Source: Malling &
Co
Good access to financingFinancing costs have been reduced to an extremely low level. The banks’ reduced margins are an important factor, and they are once again able to compete with bond financing. Swap interest rates are at historically low levels and the loan-to-value ratio is stable. For particularly solid properties and borrowers, the margins can fall below 100 bp on a loan which covers 75 % of the property’s value. Margins for normal risk projects will often be 125 - 175 bp on a loan with the same LTV ratio.
Prime yield of 4.75 %We adjusted our estimate for prime yield down to 4.75 % in the fall of 2014, and the sale of Schweigaards gate 21-23 at a yield of 4.75 % indicates that the yields are likely to be pushed further down. The explanation for this development is the heavy fall in margins, increased demand from foreign investors, weak returns on low-risk assets and good macroeconomic conditions. We estimate that the normal yield is around 6.50 %, and that this will be reduced even further due to a shortage of supply in the prime segment. We also believe that foreigner investors – who have up until now mainly been focused on more central properties – are likely to show more interest in secondary properties in the future. This might lead to an increased demand for portfolio deals since these type of investors typically only consider large-volume transactions.
Another point worth noting is that there is a significant yield gap between swap interest rates and the direct return on the property. Since the start of 2011, the former has fallen without a corresponding fall in the yield on property, and the divergence between the two variables has increased in recent time. This gap, combined with falling loan margins and low returns on bonds, makes investment in commercial real estate attractive.
Future prospectsAccording to our numbers, the transaction volume in 2014 ended up at NOK 57 billion, which is the highest level since 2006. Reduced financing costs, low yields in Europe and lower risk aversion drive the activity. The shortage of prime properties combined with most investor types’ desire to increase their exposure to property might lead to more deals being conducted off the market.
If we expand the time horizon, we see that the macroeconomic trends indicate low interest rates in the future, at the same time as increased access to capital in the Eurozone could potentially push yield levels further down. At the same time, there is great uncertainty around oil prices and how these, in the short term, will impact the rental market for commercial property.
10 yr swap Prime property Secondary assets
YIELD DEVELOPMENT LAST 10 YEARS
Source: Malling &
Co/DN
B Markets
Source: Malling &
Co
VOLUME GROWTH IN BILLION NOK (TRANSACTIONS LARGER THAN NOK 50 MILLION)
Source: Norges Bank lending survey
Commercial real estate loans (L-axis) Lending margins (R-axis)
FINANCING CONDITIONS (NET SURVEY RESULTS)
0
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010 2011 2012 2013 2014
-60,0
-40,0
-20,0
0,0
20,0
40,0
60,0
80,0
-100,0
-80,0
-60,0
-40,0
-20,0
0,0
20,0
40,0
Commersial real estate loans (L-‐axis)
Lending margins (R-‐axis)
Q4
2007
Q4
2008
Q4
2009
Q4
2010
Q4
2011
Q4
2012
Q4
2013
Q2
2008
Q2
2009
Q2
2010
Q2
2011
Q2
2012
Q2
2013
Q2
2014
Q3
2014
1,00 %
2,00 %
3,00 %
4,00 %
5,00 %
6,00 %
7,00 %
8,00 %
Mon
th1-
09
Mon
th7-
09
Mon
th1-
10
Mon
th7-
10
Mon
th1-
11
Mon
th7-
11
Mon
th1-
12
Mon
th7-
12
Mon
th1-
13
Mon
th7-
13
Mon
th1-
14
Mon
th7-
14
Mon
th1-
15
Mon
th7-
15
Mon
th1-
16
Mon
th7-
16
Mon
th1-
17
Mon
th7-
17
Mon
th1-
18
Mon
th7-
18
Mon
th1-
19
Jan .
200
5
Jan .
200
6
Jan .
200
7
Jan .
200
8
Jan .
200
9
Jan .
201
0
Jan .
201
1
Jan .
201
2
Jan .
201
3
Jan .
201
4
Jul .
200
5
Jul .
200
6
Jul .
200
7
Jul .
200
8
Jul .
200
9
Jul .
201
0
Jul .
201
1
Jul .
201
2
Jul .
201
3
Jul .
201
4Ja
n . 2
015
8 .00 %
7 .00 %
6 .00 %
5 .00 %
4 .00 %
3 .00 %
2 .00 %
1 .00 %
THE TRANSACTION MARKET / MARKET REPORT WINTER 2015 PAGE 39
nicolai riiseceo
mad arkitekter
OSLO BREAKS THE SOUND BARRIERLOCAL IDENTITY IS CRUCIAL TO THE DEFENCE OF OSLO’S POSITION AS A LEADING INTERNATIONAL CITYInterview with the CEO at MAD Arkitekter, Nicolai Riise
Oslo is growing. It is not, however, only quantitative growth in the form of new homes and office buildings, transformed port areas and striking culture buildings. An urban awakening is taking place in which the city is not just a place where we work or shop before we go back to our house and spend our leisure time in the forests. Oslo is in the process of becoming a social arena, a place where the Norwegians live their lives as a community. In this edition of the Market Report, we have talked to Nicolai Riise to hear how Oslo’s most urban architects work with this new situation in their projects.
— What do you mean when you say that Oslo is breaking the sound barrier?It simply means that, in the course of a very few years, Oslo has gone from being the Norwegian capital with local connections to being an international player in a globalised world. And this transformation has been rapid! So rapid that many people are still struggling to understand its full extent. But for those of us who are working with this, it is evident in everything we do: Oslo is an international brand, competing for students, workers and tourists with other big cities in the world.
— And this affects the architecture?Absolutely! Because a building is no longer just a building. Everything that is being built in Oslo has the potential to contribute to, and support, the city’s new status as a major city. A city is never better than what’s happening at street level, where people and buildings meet. That is why we at MAD Arkitekter are so fascinated by urban planning.
— So what is important when building in cities?First of all, you have to understand that all projects have to give something back to the local community. It may be qualities in the form of good outdoor spaces. Ground floor shops. Or functions that are needed, such as fitness facilities, etc. The point is that if everyone thinks like this, everyone will profit from each other’s’ generosity. It is just like in football. The city is a team: individual projects must cooperate.
— Are Norwegians’ urban habits undergoing change?Yes, we can see it in house buyers, property developers and architects. The Norwegian dream is no longer to own a huge house all the way up on the edge of the forest. Instead, the Norwegian men and women on the street have finally begun to see the potential of the opportunities and services that a city can offer. It was not that long time ago that the only thing property developers thought about was buying a city centre apartment building, break it up into as small units as possible and selling it off as fast as possible. But look at Vulkan: school, dining hall, rock climbing centre, hotels and housing, in which Aspelin Ramm’s business concept is, quite simply, urban quality.
— What do you think about this at MAD Arkitekter?We are working with this in all our projects, and most often on a large scale. But we have also worked with small scale initiatives, such as our
concept for the new market hall at Grønland. How can we bring life and vitality to the Vaterland district – without at the same time turning the local environment upside down? Our response was to take one of Oslo’s dreariest urban spaces – the areas under the Nyland bridge – and ask ourselves what it could be used for. And we can build upon what already exists. The answer was to enclose the area under the bridge in glass, and climate control it in the simplest way in order to establish a market hall there. Locally adapted, designed to respond to the residents’ needs. But a clear improvement on the current situation. The proposal has been received well, and is going through the political process now.
— How can this be transposed onto a larger scale?It requires both clients and property developers seeing the importance of thinking this way. And we are fortunate to be working with forward-thinking and innovative people in several major projects. Together with Entra, we are developing a new university building in “Tullinkvartalet”, a city university that will give something back to the city in the form of students, urban spaces and a general revitalisation of a slightly greying old Oslo city centre. In the same way, our work with the new bus station for Ruter is something much more than just a task associated with transport infrastructure. This is a golden opportunity to bolster some of Oslo’s dreariest areas, namely the city-centre side of Schweigaardsgate.
— So your point is that the use of the building is only a small part of the job?Not a small part. A good university or a good bus terminal are complex challenges that must be given all possible attention. My point here is simply that we have come to a point where we need to focus on several aspects at the same time. No projects in the city can only concentrate on themselves. Look at Gallery Oslo in Schweigaards gate. We cannot afford to continue to think in this way.
— Then the job is not done just because the sound barrier is broken?No, that’s just it! The job now is to maintain that speed.We are competing on a new level, and there are a lot of good projects and talented people who have gotten us to this point. This is when the real work begins. The first priority is to get people to understand that even though good planning and framework conditions are important, it is ultimately the quality of the individual projects that is crucial. And that is what those of us at MAD Arkitekter go to work every day to do.
PAGE 40 MARKET REPORT WINTER 2015 / OSLO BREAKS THE SOUND BARRIER
Illustration: MAD arkitekter
OSLO BREAKS THE SOUND BARRIER / MARKET REPORT WINTER 2015 PAGE 41
EMPLOYEES AT MALLING & CO MARKETS
Petter Warloff BergerManagerM: + 47 934 81 725E: pwb@malling .no
Kristian KleibergLawyer/Subject coordinatorM: + 47 930 90 177E: kk@malling .no
Marius VilhelmshaugenEstate AgentM: + 47 982 39 620E: mv@malling .no
Torill SkrettinglandManager/Senior Estate AgentM: + 47 917 77 814E: ts@malling .no
Stian EspedalEstate AgentM: + 47 936 01 910E: se@malling .no
Kurt Inge NybruEstate AgentM: + 47 915 23 026E: kurt .nybru@malling .no
Anne Berit MorkAccountingM: + 47 905 56 763E: abm@malling .no
Jan VarhaugEstate AgentM: + 47 908 91 678E: jv@malling .no
MALLING & CO DRAMMEN
MALLING & CO STAVANGER
ABOUT MALLING & COWE OFFER SERVICES THROUGHOUT THE ENTIRE SUPPLY CHAIN AND BENEFIT FROM SYNERGIES BETWEEN THE UNITS
ALLIANCE PARTNER
CUSHMAN & WAKEFIELDCushman & Wakefield was established in New York in 1917 and is now one of the world’s leading providers of real estate services. The company currently has more than 16,000 employees in more than 250 offices and 60 countries. Its head office is currently located in New York, but the EMEA area is controlled from London.
› Eiendomshuset Malling & Co is among Norway’s leading advisor and service provider within the field of commercial real estate. We have acquired our knowledge and experience over a period of 50 years.
› Our two divisions, Markets and Management, have a total workforce of more than 120 employees. We offer services in the fields of management, rentals, transactions, valuations, analysis, consulting, tenant representation, and project management.
KEY FACTS
› In recent years we have completed transactions worth more than NOK 10 billion,
and we currently manage commercial property for around NOK 30 billion.
› Eiendomshuset Malling & Co and its subsidiaries are an alliance partner of the globally leading real estate advisor, Cushman & Wakefield, which has 13,000 employees in more than 230 offices and 60 countries.
HQ OsloEiendomshuset Malling & Co AS
Dronning Mauds gate 10Postboks 1883 Vika, 0124 Oslo
T: +47 24 02 80 00E: post@malling .no
Malling & Co Drammen ASErik Børresens Allé 9
Postboks 361 Bragernes, 3001 Drammen
T: +47 32 21 37 00 E: drammen@malling .no
Malling & Co Stavanger ASKongsgaten 24
Postboks 861, 4004 Stavanger
T: +47 51 91 00 50E: stavanger@malling .no
SIDE 42 MARKEDSRAPPORT 2 . HALVÅR 2013 KAPITTELPAGE 42 MARKET REPORT WINTER 2015 / ABOUT MALLING & CO
Peter T. Malling Jr.Managing PartnerM: + 47 481 50 481E: ptm .junior@malling .no
Mads MortensenManaging PartnerM: + 47 922 90 666E: mads@malling .no
Fredrik SommerfeldtManaging PartnerM: + 47 91 60 91 61E: fs@malling .no
Trude S. AspelinMarket AnalystM: + 47 922 55 946E: tsa@malling .no
Marianne JohannessenHead of MarketingM: + 47 950 53 635E: mj@malling .no
Didrik CarlsenAdvisorM: + 47 994 97 575E: dc@malling .no
Øyvind Meisingset Partner/Senior Estate AgentM: + 47 907 54 597E: om@malling .no
Eirik SæbergEstate AgentM: + 47 416 63 307E: es@malling .no
Mats Rufsvoll NorrmanBusiness DeveloperM: + 47 901 36 080E: mn@malling .no
Tore BakkenParner/Sales and Marketing Dir .M: + 47 900 40 250E: tba@malling .no
Torjus MyklandProject AnalystM: + 47 400 19 144E: tm@malling .no
Dag TønderPartner/Senior Estate AgentM: + 47 917 44 870E: dt@malling .no
Haakon ØdegaardPartner/Head of Research M: + 47 938 14 645E: ho@malling .no
Ole-Jacob DamsundEstate AgentM: + 47 970 20 644E: ojd@malling .no
Lars LundAdvisor transactionsM: + 47 970 55 083E: ll@malling .no
Erik EnersenEstate AgentM: + 47 970 77 589E: ee@malling .no
Ann Kristin AureAnalystM: + 47 986 14 518E: aka@malling .no
Thomas AnderssonEstate AgentM: + 47 922 90 000E: ta@malling .no
Louis M. DieffenthalerAnalystM: + 47 938 77 141E: imd@malling .no
MARKETS PROJECT FINANCING/BUYSIDE ADVISORY
LANDLORD REPRESENTATION
RESEARCH AND ADVISORY
Thomas FrognerPartner/Senior AdvisorM: + 47 400 38 191E: tf@malling .no
Oluf M. GehebPartner/Senior AdvisorM: + 47 911 56 547E: og@malling .no
Nora B. BrinchmannPartner/Senior AdvisorM: + 47 918 93 015E: nb@malling .no
Anne G. Kolstad SkogheimSenior AdvisorM: + 47 908 71 351E: aks@malling .no
Lars Simen PaulgaardAdvisorM: + 47 474 73 655E: lsp@malling .no
Ruben Krantz KringstadBusiness DeveloperM: + 47 980 57 262E: rkk@malling .no
TENANT REPRESENTATION
Anders K. MallingPartner/Advisor transactionsM: + 47 934 98 883E: am@malling .no
Morten A. MallingManaging Partner/AdvisorM: + 47 934 98 882E: mm@malling .no
Henrik Wolf MeedomAdvisor transactionsM: + 47 416 23 733E: hwm@malling .no
Tore-Christian HauklandPartner/Advisor transactionsM: + 47 993 84 787E: tch@malling .no
Jens Christian MellbyeAdvisor transactionsM: + 47 976 74 353E: jcm@malling .no
CORPORATE TRANSACTIONS
ABOUT MALLING & CO / MARKET REPORT WINTER 2015 PAGE 43
Eiendomshuset Malling & CoDronning Mauds gate 10, Postbox 1883 Vika, NO-0124 OsloT: +47 24 02 80 00 — F: +47 24 02 80 01 — E: post@malling .no — www.malling.no